Commonwealth Bank - Assurances for Tasmania

The Commonwealth Bank today confirmed that it had reached agreement with the Tasmanian Government on a range of assurances to be implemented following the proposed merger between Commonwealth Bank and Colonial Limited.

The range of assurances cover continuity of banking services, employment opportunities and educational support, with a focus on enhancing online capabilities in Tasmania.

The Bank also committed to maintaining in Tasmania the same competitive service and pricing structures enjoyed by all Commonwealth Bank customers across Australia.

The assurances are that, following the proposed merger of the two businesses in Tasmania:

• product pricing, new product innovation and service standards for Tasmanian customers would be the same as received by Commonwealth Bank customers in fully competitive markets,
• agreement is made to a process for monitoring this commitment, undertaken by the Government Prices Oversight Commission with all associated costs being met by the Commonwealth Bank,
• only those Colonial Trust Bank branches in close proximity to a Commonwealth Bank branch will be amalgamated into a single site,
• in any country town where a Commonwealth Bank or Colonial Trust Bank branch is the sole bank, that branch will be retained for at least five years,
• where banks are amalgamated in country towns, that new branch will be maintained for at least five years,
• there will be no involuntary redundancies in any Colonial Trust Bank branch in country areas,
• one or more new national call centres will be established in Tasmania with a total of over 500 full-time equivalent positions being created; and the Bank will:

1. partner the Tasmanian tertiary education sector in establishing a computer-based training facility, involving a minimum 10 full-time training specialists for a period of three years;
2. sponsor the Tasmanian Communities Online network at a cost of $1.5 million over three years;
3. provide financial support for the purchase of computer equipment in Tasmanian secondary schools at a cost of $4 million over three years;
4. continue for a three year period, existing sponsorships and donations at the local community level that are currently provided by each of the Colonial Trust Bank and the Commonwealth Bank.

The merger will create the most diversified financial services organisation in Australia by combining two successful and innovative companies. The combined strengths of the two companies with their different but complementary product sets, customer bases and distribution networks will create a dynamic and globally relevant financial services group headquartered in Australia.

The merger is subject to both shareholder acceptance, and regulatory approvals, including from the ACCC. The proposal will be voted on by Colonial Limited shareholders on May 31.