Clarification of article that appeared in the Australian Financial Review

5 September 2003

The following letter was forwarded to the Editor in response to an article that appeared on Saturday 30 August 2003:

I refer to an article that appeared in Saturday’s edition (30 August 2003) under the headline "Will banks’ botched buys ever pay off" and would like to correct the inference that the journalist made regarding the success of the Commonwealth Bank/Colonial merger.

The article insinuates that the merger has not been successful by commenting that banks have a poor record in making acquisitions work. It then infers that a write down in the value of the Commonwealth Bank’s wealth management business was evidence of this.

Had the journalist checked the Commonwealth Bank’s position, he would have found that the appraisal value of the merged wealth management businesses has increased some $1.8 billion since the merger was completed, notwithstanding the recent write down.

The increased value was advised publicly as recently as 20 August 2003, when the Bank announced its annual profit results.

I look forward to this fact being brought to the attention of your readers.