Acquisition of minority interest in ASB Group

22 August 2000

Commonwealth Bank of Australia today announced that it has agreed to purchase ASB Bank Community Trust's ("the Trust") 25% shareholding in ASB Group Limited ("ASB") for NZD560 million. This will result in the Commonwealth Bank Group moving to 100% ownership of ASB, subject to necessary regulatory approvals. As part of the sale arrangements, the ASB Charitable Trust's subordinated loan of NZD60 million to ASB Group will be repaid.

Commonwealth Bank Group acquired its original 75% shareholding in ASB in 1989. The acquisition of the remaining 25% interest will facilitate the integration of the operations of Colonial New Zealand into ASB.

Commonwealth Bank Group Managing Director, Mr David Murray, said, "The merged operations will provide a strong platform for ASB to continue to profitably grow its New Zealand operations. The integration of ASB and Colonial New Zealand will provide significant opportunities to continue to expand the range of products offered to our customers in New Zealand. No changes are planned to the management and operational style that has consistently delivered out performance in the New Zealand market".

ASB principally comprises ASB Bank, a full service, nationally operating bank that provides a comprehensive range of retail and corporate banking and investment services to over 800,000 individual and business customers.

In addition, ASB's wholly owned subsidiary, Sovereign Life, provides a variety of life insurance and investment products to both ASB Bank's customers and its own customer base. ASB is also the leading provider of on-line banking facilities in New Zealand through its BankDirect operations, and retail broking through ASB Securities.

Colonial New Zealand offers a range of life insurance products, including term life, disability income protection and trauma, as well as individual savings and personal superannuation products.

The Commonwealth Bank has enjoyed a close relationship with the Trust since acquiring its 75% shareholding in ASB in 1989. Mr Murray paid tribute to the contribution made to ASB by the Trust over eleven years through its representative directors Judith Bassett and Waari Ward-Holmes. He added their support of ASB and valuable counsel on important issues had grown the value of ASB and added materially to the philanthropic scope of the Trust. ASB intends to continue its association with the Trust.