Welcome to the first Commonwealth Bank Shareholder Review which has been produced in response to your feedback at the 2005 Annual General Meeting that you were looking for a simple and easy to read shareholder communication. This Review provides an overview of the Bank’s performance for the 12 months to 30 June 2006 and a summary of the strategic and operational priorities for the coming year. It also includes details of the Bank’s Board, a summary of remuneration as well as some insights into our engagement with the community.

RESULTS AND OUTLOOK
We are pleased to report that the Commonwealth Bank had a very good year. The Bank announced its full year result on 9 August 2006 delivering a statutory net profit after tax (NPAT) for the 12 months to 30 June 2006 of $3,928 million – an increase of 16 per cent on the prior year. Cash NPAT grew 16 per cent to $4,053 million with cash return on equity increasing from 18.8 per cent to 21.3 per cent. Excluding the one-off gain of $145 million from the sale of the Bank’s Hong Kong based insurance business, cash earnings per share were up 15 per cent to 304.6 cents per share.

In a competitive market, we continued to focus on profitable growth, avoiding business which we perceived to have a high risk profile or which did not meet our return criteria.

The Board again declared a record final dividend of $1.30 per share – a 16 per cent increase on last year’s final dividend. The final dividend, which is fully franked, will be paid on 5 October, 2006. This will take total dividends for the year to $2.24 per share – up 14 per cent on last year. Over the last three years, dividends have grown at an annual compound rate of 14 per cent.

Going into the new financial year, we remain confident that we will be a tougher competitor and will continue to deliver both revenue growth and productivity improvements. Given the strength of the Bank’s competitive position and our earnings momentum we expect, in the absence of any exogenous shocks, to see good profit growth for the 2007 fiscal year with the Bank delivering earnings per share growth which meets or exceeds the average of our peers. We do not plan to trade off credit quality for growth.

WHICH NEW BANK AND STRATEGIC PRIORITIES
This year marks the successful completion of the three year Which new Bank transformation programme. The Bank has met all of the major financial and productivity targets it set out to achieve in September 2003. This included financial benefits of $1,044 million for the 2006 fiscal year which exceed the original target of $900 million, 14 per cent compound EPS growth (compared to a revised target of 12 per cent) and impressive productivity improvements for Banking, Funds Management and Insurance.

However, despite these achievements we recognise that we have more work to do if we are to realise our vision of being Australia’s finest financial services organisation through excelling in customer service. Building on the Which new Bank platform, we have identified four strategic imperatives which will empower our people, deliver better service to our customers and enhance returns to our shareholders. The four strategies are Customer Service; Business Banking; Technology and Operational Excellence; and Trust and Team Spirit. We explain the philosophy behind each of these strategies and the progress we have made already on pages 4 to 7 of this Review.

BOARD APPOINTMENTS
This year has been another busy year for the Board and we would like to thank all of the directors for their contribution and commitment. We would especially like to acknowledge the contribution of Tony Daniels and Barbara Ward who will retire from the Board at the Bank’s Annual General Meeting on 3 November.

We have recently announced the appointment of two directors. David Turner, CEO of Brambles, and Jane Hemstritch, Managing Director for Asia Pacific, Accenture, join the Board effective 1 August 2006 and 9 October 2006 respectively.

THANK YOU
This has been a challenging year for the Bank. We have witnessed significant change with the transition to a new CEO and with the successful completion of Which new Bank. The fact that we have also been able to maintain the momentum in the business and again deliver a very good financial result is a tribute to the commitment and hard work of all of our people. It is our employees who deliver our success and they deserve to be congratulated for their efforts.

Finally we would like to thank all our customers and shareholders for their continuing support of the Commonwealth Bank.

JOHN SCHUBERT – Chairman


RALPH NORRIS – Chief Executive Officer

23 August 2006
Note: This Review is designed to provide shareholders with an overview of the Bank’s performance and strategies. Readers seeking greater details, including Financial Statements for the year ended 30 June 2006, should consult the Commonwealth Bank of Australia Annual Report 2006 or Concise Annual Report 2006 or visit the Bank’s website:

www.commbank.com.au/shareholder/annualreports