Letter to AFR re NZ Capital RPS Issue

3 June 2005

The Commonwealth Bank today forwarded the following Letter to the Editor of the Australian Financial review in response to a misleading article on a the Bank's CBA Capital RPS Issue.

We would like to clarify a point raised in your Street Talk column on Wednesday 1 June 2005 entitled "CBA sates Kiwis' appetite for hybrids".

The CBA Capital RPS were issued on the basis the first dividend is paid to the initial subscriber irrespective of any transfer of the RPS prior to the first dividend payment date. Consequently the RPS may trade at an ex-dividend discount to the issue price of NZ$1 for the entire first dividend period to 15 July 2005.

The current trading price for the CBA Capital RPS of 98.80 is therefore consistent with the RPS trading on an ex dividend basis. It would be very much appreciated if you could clarify this point with your readers.

With respect to your comments regarding the Lead Managers struggling to offload stock, we note that the issue was structured as NZ$250 million plus NZ$100 million of oversubscriptions and was strongly supported by the market enabling the issuer to allocate the full oversubscriptions allowance to take the offer to NZ$350 million.

Bryan Fitzgerald

General Manager, Media and Issues Management