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(1) Except where otherwise stated, all figures relate to the full year ended 30 June 2015. The term “prior year” refers to the full year ended 30 June 2014, while the term “prior half” refers to the half year ended 31 December 2014. Unless otherwise indicated, all comparisons are to “prior full year”.
(2) For an explanation of, and reconciliation between, Statutory and Cash NPAT refer to pages 2, 3 and 15 of the Group’s Profit Announcement for the full year ended 30 June 2015, which is available at www.commbank.com.au/shareholders.
(3) Analysis aligns with the 13 July 2015 APRA study titled “International capital comparison study”.
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
(1) Increase in the Group’s market capitalisation.
(2) Results for the Roy Morgan retail MFI Satisfaction survey. Based on six month rolling average up to and including June 2015.
(3) Includes transactions, savings and investment average interest bearing deposits.
(1) Analysis aligns with the 13 July 2015 APRA study titled “International capital comparison study”.
Capital raising through $5 billion pro rata renounceable entitlement offer
The Group will offer entitlements to CBA ordinary shares pro rata to all eligible shareholders, which can be exercised to buy 1 new share for every 23 shares held on the record date for the offer at an offer price of $71.50 per new share (“Entitlements”). This represents a 10.5 per cent discount to the dividend adjusted closing price on the ASX on 11 August 2015. Eligible Retail Shareholders who do not exercise, sell or transfer their Entitlements will have their Entitlements sold on their behalf through a bookbuild process and any sale proceeds will be paid to them.
The offer will be fully underwritten to raise approximately $5 billion. Approximately 71 million new fully paid CBA ordinary shares will be issued (approximately 4.3 per cent of shares on issue).
Following the capital raising, the Group’s pro forma CET1 ratio will be 14.3 per cent on an internationally comparable basis (which assumes full implementation of the Basel III reforms), and 10.4 per cent on an APRA basis. You should refer to the results presentation for the full year ended 30 June 2015 for further information on the offer and its financial impact on the Group.
New shares acquired through the offer will not receive the dividend payable for the full year ended 30 June 2015. New shares will rank equally with existing shares in all other respects.
On the outlook for the next 12 months, Ian Narev said: “The Australian economy has some good foundations. The RBA’s monetary policy settings have stimulated residential construction activity, which has aided the economy’s transition from its dependence on mining investment. The Federal Budget's small business measures have had a discernible impact. Business credit quality is generally very good, while in the household sector savings rates are solid. Household credit quality remains high, though the banking sector and our regulators are conscious of the potential impacts of a sustained period of low interest rates, and are therefore taking measured action.
Risks remain in the near-term resulting from some ongoing volatility in parts of the global economy. One important factor to watch over the next year will be whether the lower dollar stimulates investment by export-sensitive industries, to create jobs and stimulate consumer demand.
In the longer term, we have a positive view of the Australian economy. In growing markets in our region, there is a high demand from people who want to buy Australian goods and services, invest in Australia, educate their children in Australia, visit Australia and in some cases move to Australia. Australia's exceptional natural and human resources position us well. But we must ensure that our policy environment positions our economy to benefit from its strengths. Businesses and all sides of politics must work together towards a goal of a more diverse and productive economy. We need particular focus on a more efficient and fair tax system, building of high-quality and well-prioritised infrastructure, and trade and foreign investment settings.
At CBA we will continue our significant investment in our long-term strategic priorities. Our ongoing goal is to have highly motivated people putting the customer at the centre of everything we do, and focusing on deploying leading technology to simplify our customers' dealings with us, and to continuously make the organisation more productive.”
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APPENDIX: SUMMARY TABLE OF KEY FINANCIAL INFORMATION
(1) Net Profit after income tax (“cash basis”) – represents net profit after tax and non-controlling interests before Bankwest non-cash items, the gain on sale of management rights, treasury shares valuation adjustment, Bell Group litigation and unrealised gains and losses related to hedging and IFRS volatility. This is Management’s preferred measure of the Group’s financial performance.
(2) Net Profit after income tax (“statutory basis”) – represents net profit after tax and non-controlling interests, Bankwest non-cash items, the gain on sale of management rights, treasury shares valuation adjustment, Bell Group litigation expense and unrealised gains and losses related to hedging and IFRS volatility. This is equivalent to the statutory item “Net profit attributable to Equity holders of the Bank”.
The pro forma historical financial information included in this announcement does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the U.S. Securities and Exchange Commission.
This announcement does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to persons acting for the account or benefit of persons in the United States. Neither the entitlements nor the new shares have been, or will be, registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction of the United States. Accordingly, the entitlements and the new shares may not be offered or sold to persons in the United States or to persons who are acting for the account or benefit of persons in the United States, unless they have been registered under the Securities Act, or are offered and sold in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and applicable U.S. state securities laws.
Neither this announcement nor any other documents relating to the offer of entitlements or new shares may be sent or distributed to persons in the United States.
This announcement contains forward-looking statements, which can usually be identified by the use of words such as such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, “continue”, “objectives”, “outlook”, “guidance” or words of similar effect. These forward-looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of CBA, and which may cause actual outcomes to differ materially from those expressed in the statements contained in this announcement. Undue reliance should not be placed on these forward-looking statements. These forward-looking statements are based on information available to CBA as of the date of this announcement. Except as required by law or regulation (including ASX Listing Rules) CBA undertakes no obligation to update these forward-looking statements.