Issue of Funds Management Securities

20 September 2006

Commonwealth Bank of Australia (the "Bank") announces the issue of $700 million of hybrid securities, called Funds Management Securities ("FMS").

The coupons on the FMS, and in some cases repayment of capital, will depend on the fees generated by the Australian funds management business currently conducted by Colonial First State Investments Limited ("CFSI") and Colonial First State Asset Management (Australia) Limited ("CFSAM"). CFSI and CFSAM are members of the Colonial Group which is wholly owned by the Bank.

The FMS will be issued via a private placement. The FMS will pay a floating rate coupon of BBSW plus 1.00%, until they become callable at the option of the Colonial Group in 2011.

The issue of FMS forms part of the Bank’s ongoing commitment to efficient, innovative capital management. Ralph Norris, Chief Executive Officer, said "The FMS provide the Bank with cost-effective funding that strengthens the capital position of the Colonial Group".


For additional information, please contact:

Bryan Fitzgerald
General Manager
Media and Issues Management
Marketing and Communications
Telephone (02) 9378 2663

Warwick Bryan
Executive General Manager
Investor Relations
Telephone (02) 9378 5979

The Funds Management Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act.