Good morning, shareholders. My name is Helen Dalley, and I am your emcee for today's annual general meeting of the Commonwealth Bank of Australia. My role is to help shareholders understand how the meeting will work, including how shareholders can vote and how shareholders can ask questions. I would like to begin by acknowledging the traditional custodians of the land on which we meet today, the Gadigal people of the Eora Nation, and pay our respects to their elders past and present. I extend that respect to Aboriginal and Torres Strait Islander persons here today and on the webcast. We are hosting this year's meeting in person at the Hyatt Regency in Sydney. We welcome shareholders to the Grand Ballroom, and we also welcome those watching via webcast online. Your safety is a high priority for the bank, so I will briefly outline the venue's safety procedures.
If an emergency occurs, the Chair may need to adjourn the meeting and ask everyone to walk towards the exit signs. If that happens, please follow all directions from the Hyatt Regency staff and the security team, and listen for further instructions via the public address system. We ask that you now please switch off your mobile phone or put it on silent during the meeting. In addition, please do not take photographs or film or record the meeting. Before I hand over to your Chair to formally open the meeting, I will briefly outline the processes that will help shareholders to participate. Thank you to those shareholders who have submitted questions prior to the meeting. We have sought to address many of the themes in the questions throughout the remarks that will be made by the Chair and the CEO in their formal addresses to this meeting.
In a few moments, I will address how to submit questions for those viewing online. First, I will deal with asking questions and voting for those who are attending in person, and we are thrilled to see so many of you attending in person. When registering your attendance today, you would have received a colored card. You need your card to ask a question or to reenter the meeting room. Yellow cards are for shareholders and proxy holders who may speak and vote. Blue cards are for shareholders who may speak, but not vote, as they have already lodged a vote, or they are a joint holder. If you are a shareholder and proxy holder and have two yellow cards, it is important that you complete both yellow voting cards. One in your own right and the second as a proxy for your nominating shareholder.
All other persons holding red or green cards are welcome to attend, but may not address the meeting or vote. Before voting, the Chair will introduce each item of business separately and then invite questions. For those here today, the Chair will ask shareholders and proxy holders who wish to speak to move to the closest microphone located in the room. Please show your yellow or blue card and provide your full name to the microphone attendant, who will introduce you to the meeting. If you are not here in your own personal capacity, please also identify the shareholder you are representing to the microphone attendant. Questions should be confined to the business of the meeting. Questions about individual banking or personal shareholding matters will not be put to the meeting.
If you have an individual banking or customer question, please speak with representatives from our group customer relations and customer advocate team who will be available after the meeting in the foyer just outside this room. To the extent you are able, if your question relates to a particular item of business, please ask your question when we come to that item. I would also ask that you are respectful of others during the meeting so that we can have a constructive discussion on all matters. Shareholders or proxy holders viewing the webcast who wish to submit an online question now or during the meeting can do so by selecting the "Ask a Question" button located at the top and bottom of your screen.
Your questions will be placed in a queue, and we encourage you to submit questions now to assist us in getting through as many of your questions as possible. To allow as many shareholders as possible the opportunity to participate today, the Chair will accept up to two comments or questions from each shareholder for each item of business. Now, this applies to both in-person and online questions. For those submitting online questions, we ask that you submit each question separately, and please note that your questions will be limited to 532 characters. If you exceed that limit, you will be unable to submit your question. You will need to shorten it and then resubmit the question. When questions for each item of business are ready, I will introduce the shareholder by name, and I will read the question for the Chair to answer.
If we receive a number of similar questions, it is possible these questions may be grouped and answered collectively. Questions submitted that relate to customer or personal shareholding matters will not be put to the meeting. You will be contacted at the conclusion of the meeting to follow up the individual support you may need. For those viewing the webcast, further information about how to contact CBA is available by selecting the "Contact Us" button located at the bottom of the screen. It is my great pleasure to now introduce your Chair, Paul O'Malley.
Good morning, and thank you, Helen, for welcoming everyone here in the room and online and acknowledging the traditional custodians of the land. Thank you all for attending today. I am pleased to welcome you to our 2026 Annual General Meeting. I am informed that we have a quorum present, and I declare the 2026 Annual General Meeting of the Commonwealth Bank of Australia open. A notice of meeting has been distributed, and I will take it as read. I would now like to introduce your Board, the Chief Financial Officer, and the Group Company Secretary.
From my far left, Alistair Currie, Julie Galbo, Jane McAloon AM , Lyn Cobley AM, Alan Docherty, our Chief Financial Officer, and Matt Comyn, our Chief Executive Officer and Managing Director. From my far right, Peter Harmer, Chair of the Audit Committee, Kate Howitt, Rob Whitfield AM, the Chair of the Risk and Compliance Committee, Julie Coates, Simon Moutter, Chair of the People and Remuneration Committee, and Vicki Clarkson, our Group Company Secretary. Also with us today are the other members of the bank's Executive Leadership Team.
Elizabeth O'Brien, the Lead Audit Partner for our external auditor at PwC, is also in attendance today. Elizabeth was the Lead Audit Partner for the external audit of the financial statements for the financial year ended 30 June 2026 and is available to respond to any specific questions you may have in relation to this audit. The 12 months since our last AGM have been marked by heightened uncertainty. Global geopolitical tensions have intensified, technology is moving rapidly, and expectations from customers, communities, and regulators continue to rise.
Many Australians are feeling cautious and continue to make careful decisions about how they spend, save, and manage their money. Our purpose, building a brighter future for all, is increasingly relevant in uncertain times. It reflects our commitment to Australia and guides how we support our customers, engage with our communities, strengthen the nation, and provide sustainable returns for our shareholders. Our strategy, building tomorrow's bank today for our customers, focuses on deepening customer relationships, delivering better and more consistent experiences, continuing to invest in technology and capability, and maintaining strong risk discipline. Disciplined execution of our strategy remains key to delivering long-term value for all shareholders, for all stakeholders, especially our shareholders. At the heart of the bank's strategy is growing our share in retail and business banking. Productivity, wages, and living standards depend on sustained investment in productive capacity.
This is why we are intentionally growing lending to Australian businesses to support Australia's economic growth that underpins our standard of living. This year, the board has spent considerable time examining the opportunities and risks associated with artificial intelligence. We see AI as having the potential to help improve customer experiences, strengthen productivity, and enhance the bank's ability to manage risks such as fraud and scams. At the same time, we recognize the importance of strong governance and responsible adoption. Our CEO, Matt Comyn, will say more about how CBA is using AI across the organization. Cost of living pressures and higher interest rates continue to affect households unevenly, while businesses are managing elevated input costs and supply uncertainty. Matt will elaborate on how we're supporting customers through these ongoing challenges.
We have the largest branch and ATM network in Australia, and more than 16,000 of our people serve our customers directly every single day. Earlier this month, we committed to keeping all 281 of our regional branches open until at least the end of 2030. We're also investing AUD 140 million this year to upgrade our branch network. As more customers choose digital banking, branches remain important for people and businesses when they need more complex support or value a local relationship. Improving financial inclusion for First Nations customers remains a priority. Alongside our branch teams and our Indigenous customer assistance line, our First Nations Reach program expands access to essential banking services and builds financial capability through community visits. Since March of 2024, we have supported more than 5,200 customers across 29 locations, covering 38 communities.
One of our most important responsibilities is helping customers stay safe. Economic crime continues to impose real costs on households, businesses, and trust in digital systems. The board has maintained its focus on the bank's investment in helping to protect customers and communities, recognizing these threats evolve alongside technology. We support a system-wide approach to economic crime with government, telecommunications, digital platforms, and financial institutions taking coordinated action to help reduce harm. This year, we have invested more than AUD 1 billion to help protect customers from fraud, scams, cyber threats, and financial crime. Matt Comyn will speak more about this. CBA's cash net profit after tax was AUD 11 billion, an increase of 7% from the previous year. The final dividend was AUD 2.70 per share, delivering a total FY 2026 dividend per share of AUD 5.05, fully franked.
We returned AUD 8.3 billion to shareholders, benefiting more than 14 million Australians who own CBA shares directly or through their super funds. The board sees the bank's balance sheet strength as both a strategic asset and a resilience mechanism. Balance sheet strength is essential to maintaining confidence, funding the economy, and supporting customers when conditions deteriorate. We remain focused on preserving strength across capital, liquidity, long-term funding, and provisioning, recognizing that resilience must be built before it is actually needed. Delivering returns above the cost of capital is essential. This is what allows us to keep lending, be there for our customers, invest in our franchise, and pay a sustainable dividend. Affordable, reliable, and secure energy, including through the transition to net zero, is critical to underpin economic prosperity.
As the bank for all Australians, we remain committed to supporting our customers and communities through the period of significant structural change. The Australian Energy Market Operator, AEMO, identifies that renewable energy, connected by transmission and distribution, firmed with storage and backed up by gas, presents the least cost way to supply secure and reliable electricity to consumers as coal plants retire and while meeting government policies. AEMO also forecasts gas shortfalls in the coming years, and the Australian government has announced its intention to establish a domestic gas reservation scheme, which will seek to deliver energy security and stable natural gas prices. Delivering a more secure, reliable, and affordable energy system will require sustained investment at scale, particularly in generation, storage, and enabling infrastructure. Our environmental and social framework recognizes Australia's need for a secure energy platform.
We continue to make progress against our commitment to support Australia's transition to net zero by 2050. We remain on track for 12 of our 15 sector-level finance emissions goals and targets. Having achieved our 2025 operational emissions targets, we set a new 2030 target to reduce our Scope 1 and 2 operational emissions by 75% against the 2020 baseline. We have also observed growing focus on nature-related risks. We recognize the importance of Australia taking action to maintain, restore, and enhance nature and biodiversity. Our approach to nature is informed by our experience managing climate-related risks, being methodical and deliberate, building our understanding from evidence, and working with relevant customers as expectations and external requirements evolve. Since 2023, we have progressively enhanced our understanding of nature-related risks.
Our initial analysis identified agriculture as a priority sector, and we have since continued to build our geospatial capabilities and strengthen our risk assessment processes. Agriculture is fundamental to Australia's economy, our regions, and our national prosperity. Farmers have stewarded the land in Australia for over a century and are responding to a changing operating environment, including rising input costs, changing market expectations, while navigating state, territory, and federal regulations. Many farmers have long adapted their practices to improve productivity, manage costs, and strengthen resilience, including by investing in their natural assets. This can include native revegetation, tree planting, and improving the management of soils and waterways. Some shareholders have called for a pathway to deforestation-free finance.
Forest loss can have impacts on nature, but not every instance of land clearing is the same, and evidence of clearing on a property doesn't by itself tell you what the appropriate banking response should be. Governments and regulators set and enforce the law. Our role is to understand the issue, consider relevant risks through our established processes, and make careful decisions about customer relationships. We have made progress this year, including completing an initial portfolio-level analysis of potential forest loss in our business bank agribusiness portfolio, making targeted updates to our risk assessment process, and providing additional banker training, ongoing monitoring of relevant external developments, and continued learning from our analytical work. This will inform whether changes to our current approaches are appropriate. Effective governance, a strong risk culture, and clear accountability helped the bank to deliver good risk outcomes and to maintain trust.
The board has continued to oversee the bank's management of financial, non-financial, and strategic risks, supported by the Risk and Compliance and Audit Committees. The right risk culture supports innovation and supports our ambition to exceed customers' expectations. Sustaining it requires persistent focus and a commitment to preserving the corporate memory of the Prudential Inquiry. Risk culture measures during the year showed continued progress, while also highlighting areas for further improvement. Our annual risk management declaration to the Australian Prudential Regulation Authority assists the board in identifying the material risks when we need to strengthen our approach. Areas of focus include cybersecurity, operational resilience, fraud and scams, and financial crime compliance. Technology, including AI, is central to the group's strategy, and we take the responsible use of AI seriously.
Risks associated with AI are managed by our existing risk management framework and our group AI policy and standard, and are supported by six responsible AI principles. Gen AI guardrails have also been developed to help manage key risks. Succession planning remains a focus so that the bank has the right executives in the right roles, leading with the right behaviors and values to deliver our strategy and enhance franchise value. With the support of the People and Remuneration Committee, we thoroughly review executive performance, tenure, and succession plans. Turning now to the board. Current Independent Non-Executive Directors, Simon Moutter and Rob Whitfield AM, are standing for re-election with the support of the board. Simon will stand for a three-year term and Rob for a one-year term, in line with our board appointment, renewal, and performance policy.
We consider it appropriate to extend Mr. Whitfield's tenure beyond nine years, given his banking, finance, and risk expertise, and his leadership as Chair of the Risk and Compliance Committee. Julie Coates will today stand for election as an Independent Non-Executive Director with the support of the board. Julie joined the board at the start of September. She is a Non-Executive Director of Wesfarmers Limited and Scentre Group Limited, and has a breadth of experience in the retail, consumer goods, construction, manufacturing, and building products sectors. To be effective, your board needs to understand how the operating environment is shifting and its implications for the bank business model. Directors need diverse skills and experience to apply considered judgment. They are required to keep learning, use values to balance stakeholder perspectives, and participate in respectful but rigorous debates.
Stewardship requires directors to be clear on trade-offs, disciplined on capital, and to never lose sight of the people and communities impacted by our decisions. The board takes seriously its responsibility to oversee sound long-term decision-making for the bank, supporting strong outcomes for our customers and shareholders, and helping to build a resilient banking system for all Australians. By helping our organization prosper through uncertain times, we can be there for our customers when they need us most and contribute to the resilience of the Australian economy. I sincerely thank my fellow directors for their care and diligence, Matt and the Executive Leadership Team and our people for their hard work, and for our customers for choosing to bank with us. I extend my appreciation to you, our shareholders, for your long-term support of CBA. I now invite our Managing Director and CEO, Matt Comyn, to address the meeting.
Thank you, Paul, and good morning, everyone. This year, we've stayed focused on supporting our customers, helping protect communities, and investing in Australia. We know 2026 has been a challenging year for many Australians. The impact of higher interest rates and cost of living pressures has not been shared evenly, and for some households, it has become harder, not easier, as the year has gone on. Whether our customers are managing their personal finances, running a business, or both, we are here to support them if they need us. This year, we activated emergency assistance for customers impacted by severe weather, and in the last financial year, we established 147,000 payment arrangements for customers experiencing financial difficulty. Being able to support customers when it matters starts with knowing them well. One in three Australians and one in four Australian businesses call us their main financial institution.
That trust is what allows us to keep lending and supporting our customers. Last financial year, we provided AUD 50 billion of new lending to businesses supporting investment, growth, productive capacity, and employment across the economy. We helped our customers buy more than 150,000 homes and provided AUD 17 billion in finance for new housing supply. A continuing focus for us has been getting closer to our customers and better understanding what matters most to them at key moments in their lives. Over the year, we saw improvements in our retail and business customer journeys, helping us address customer pain points and improve our end-to-end experiences. Our focus on delivering consistent customer experiences supported us in maintaining our number one position among major banks in the Consumer Net Promoter Score, or NPS, a position we've held for almost four years.
In September, we also maintained our number one position among the majors in business and institutional NPS. While our results are encouraging, there is still more work to do. Our customer focus and the consistent execution of our strategy are reflected in our results for the 2026 financial year. We grew at or above system in all five core product categories: home lending, business lending, consumer finance, household deposits, and business deposits. This is the first time any major Australian bank has done this in the past 15 years. Importantly, it was not achieved by sacrificing margin. Cash net profit after tax increased by 7% to AUD 11 billion. Cash earnings per share increased by AUD 0.44. This allowed the board to declare a fully franked dividend of AUD 2.70, taking the full-year dividend to AUD 5.05 per share.
The strength of our franchise and prudent settings enable us to support customers, invest in our business, and deliver sustainable shareholder returns. Nowhere is that investment more important than in helping to keep our customers safe. As Paul O'Malley mentioned, economic crime continues to impose real costs on our customers and the community. Threats continue to evolve quickly, increasing their potential to harm our customers and communities, and we recognize there is always more to do. Last year, we invested more than AUD 1 billion to help protect customers from fraud, scams, cyber threats, and financial crime. Every day, we send around 40,000 proactive warning alerts via the CommBank app. Since September 2024, we've provided customers with 5.9 million notifications via intelligent warnings for first-time payments. While AI is making scams more sophisticated, it is also an increasingly important part of how we detect harmful and suspicious activity.
We're using human-sounding AI bots to engage and help disrupt scammers in real time. These bots have held more than 350,000 conversations via calls or messaging since August 2025. From helping protect customers to serving them, technology, including AI, is central to our strategy of building tomorrow's bank today for our customers. We believe AI could be the most significant technology shift we have seen. It presents an opportunity to improve productivity, strengthen services, and help make Australia more capable and Australians more prosperous. As customers increasingly use AI to search, compare, decide, and transact, we believe the value of a trusted primary relationship will continue to increase. This year, we began a phased rollout of CommBank Companion to a select group of customers. Companion is an AI-powered conversational experience with the CommBank app that provides information about a customer's personal and business finances.
In business banking, Banker Workbench is an AI-enabled workspace that brings together data, tasks, and insights so bankers can spend more time with our customers. Central to how we use AI is being able to use it safely. Reflecting our focus on responsible AI, leadership and talent development, we were ranked the number one bank in Asia-Pacific and number four globally for AI maturity in the 2026 Evident AI Index. Realizing the AI opportunity will require regulation to keep pace. An effective regulation should help build trust in AI while ensuring global technology companies operate in accordance with Australian laws and standards, and that as much of the economic value that is created is then captured in Australia. Building a brighter future for all also means investing in our communities.
One way we do this is through our Next Chapter program, our long-term commitment to help address domestic and family violence and financial abuse in Australia. Our Next Chapter team continues to provide free and confidential support to victim survivors, no matter who they bank with. This year, the team provided support through over 19,300 individual interactions. Another way is through our annual community grants. This year, 180 community organizations across Australia were recognized, each receiving a grant of AUD 20,000. Six of these grant recipients were voted by our people to receive an additional AUD 80,000 to amplify their impact in the community. Football is Australia's largest grassroots sport, and we're now its largest supporter in Australian history.
CBA has been proud naming rights partner of the CommBank Matildas since 2021. This year we expanded our partnership with Football Australia to support all Australians to play, regardless of age, gender, ability or location. We know that providing exceptional experiences for our 18.6 million customers is only possible through a skilled and dedicated workforce that reflects our customers and our communities. I'm deeply grateful to work alongside them, and I thank them for their dedication. People engagement remains high at 85%, up from 84% in September 2025. This is the highest level recorded under the current methodology. The combination of understanding our customers and deepening engagement with our people means we can support customers through challenging periods and continue to deliver sustainable returns for our owners. We're also helping our employees build skills for the future.
This year, we announced a three-year, AUD 90 million program to help our teams build skills and capabilities as technology reshapes the way we work and the way we serve our customers. Some tasks will change, some roles will evolve, and new roles will continue to emerge. We want to be transparent with our people about that and to help them prepare early. Looking ahead, growth is slowing across the economy and inflation remains too high, and it will take time for higher interest rates to bring inflation back into the target range. We also expect more frequent and more volatile international shocks, which Australia has little control over. That makes productivity more important than ever. Building more homes, delivering reliable, low-cost energy at scale, and adopting technology, including AI, across the economy, will all be critical.
Notwithstanding that, the economy remains resilient, and we should be optimistic about Australia's long-term potential. Despite a demanding environment, we enter the 2027 financial year from a position of strength, with a clear focus on execution and continuing to support our customers. Our purpose, building a brighter future for all, reflects our commitment to Australia. As we look to the year ahead, we'll stay focused on investing in our business and executing our strategy to bring our purpose to life. I'd like to thank our customers, our people, our shareholders, for your ongoing support of the Commonwealth Bank of Australia. Thank you.
Thank you, Matt. As Chair of the meeting, I formally declare the poll on all resolutions open and that the poll will close 15 minutes after the meeting closes. You may now vote on all resolutions. MUFG Corporate Markets is the returning officer for this meeting, with responsibility for overseeing the voting process. There are five items of business to be considered today. These are, number one, consideration of financial statements and reports. Two, the re-election and election of Directors. Three, the adoption of the 2026 remuneration report. Four, the grant of securities to the CEO, Matt Comyn. And five, resolutions requisitioned by a group of shareholders. The voting exclusions for item three and four are set out in the notice of meeting.
Where undirected proxies have been given or default to the Chair of the meeting, they will be voted in favor of items two to four inclusive, and against item five. We will now move to the first item of business, which is to receive and consider the financial report, the sustainability report, the Directors' report, and the auditors' reports of the company for the financial year ended 30 June 2026. While there is no resolution for this item, there is an opportunity for shareholders to ask questions on the reports, management of the company, and on the audits. I understand that some shareholders may wish to ask questions in relation to item five. When we reach this item, a representative from the requisitioning shareholders will address the meeting to share some remarks.
I ask that, to the extent possible, you hold your questions in relation to item five until after these remarks. I now invite shareholders and proxy holders in the room who wish to ask questions or make comments on item one to move to a microphone. As a reminder, please show your yellow or blue card and provide your full name to the microphone attendant, who will introduce you to the meeting. I also invite shareholders and proxy holders to submit questions online. Excuse me. Are there any questions? Microphone four.
Chair, I would like to introduce Mr. Paul Blackmore.
Welcome, Mr. Blackmore, and good to see you again.
Good to see you as well. Paul Blackmore from the Finance Sector Union. We represent CBA workers across Australia. Firstly, congratulations on the record profit. What I do want to ask is, despite this record profit, we've still got a situation where your employees remain concerned about their ongoing job security. We recognize the investment you've made in your Future Workforce program, which is detailed in your annual report, and the associated platforms that are designed to assist with reskilling and support impacted employees. But like I said, job security remains a true concern for your employees, and already this year we've seen about 1,000 jobs cut from Australian-based employees here at CBA. I'll cut to the question. What assurances can CBA give to its staff that their jobs are secure and they won't be next on the chopping block?
Thanks very much for your question and for your engagement, and I do note that there has been constructive conversations with you and your representatives about the EBA. That is positive. We have a really important role in Australia at the CBA, and that's to support the nation and its businesses and the communities, and whether that's from lending money or cybersecurity, through our technology platforms, supporting communities through our branch networks, our ATM, and we've given the comment about maintaining our regional branches through to 2030. None of that we can do without capable, committed and skilled employees. The Commonwealth Bank is incredibly fortunate to have almost 50,000 employees and 35,000 in Australia who commit to supporting the bank and its customers and all its stakeholders every single day. We are fortunate that we have such capable and committed employees.
As a board, making sure that we focus on supporting our employees to do the right thing for themselves and the bank. You mentioned the workforce program. We have to invest in our people as the world changes. Technology is evolving rapidly. I'm sure there will be many questions on AI, but AI as a skill, that I'm sure many people in this room and online use, is changing and complementing the way that we can work. The skills that we need to do that do require investment, and as a bank, I think we're leading in the way that we are working out the skills matrix that our employees have, helping share with them and understand the skills that they have, giving them the opportunity to expand those skills to have more opportunity, whether it's within the bank or whether they choose to go elsewhere.
We have to support Australia proceed into what is quite a changing world. In terms of the specific questions of commitment, our commitment is to our employees and to give them the best opportunity to have the best personal future that they can have. To the extent that that's with the CBA, that's great. If it's elsewhere, we want them to be successful elsewhere as well. There's no ability to give a blanket commitment to any individual or to the nation. We are seeing competition today come from tech firms outside of Australia who are deploying AI and taking Australian businesses out of the chain and directly engaging with customers.
As a bank, we need to work with our employees to make us the best bank to support the most Australians that we possibly can, and we can't do it without employees. I think the very specific answer to your question is that we are committed to supporting our employees, benefiting from their contribution to all of our stakeholders, and making sure that we underpin and invest in their ability to build their capabilities and experiences. This bank can't deliver anything without the support of our employees.
Thank you. Of course, some of your employees here are going to ask some questions as well around AI and other matters. Thanks.
I appreciate that. Thank you very much. We go to microphone number 3.
Chair, I'd like to introduce Adam Verwey.
Welcome, Adam.
Hi, Chair. The bank created a human rights grievance mechanism in 2023, available to First Nations persons in Australia. This is a great thing to have. However, all the other big banks have a human rights grievance process available to all communities that face human rights impacts from that bank's lending. My question is whether the bank has a plan to expand its human rights grievance mechanism to include all impacted communities aligned with the other big banks.
Thank you. We at CBA focus on a lot of really important topics, including human rights or modern slavery, for instance. We've spent time on that in this last board cycle. We take a very broad approach to our roles and responsibilities for supporting all of our stakeholders and making sure that we have the right policies and frameworks and support mechanisms within the bank for bank customers, but also for bank communities. We outreach into the communities, and I mentioned the process of the Indigenous Community Outreach program. We will continue to reflect on what others do, but really focus on what we think is the right balance to engage with all of our stakeholders, including in the process that you identified. There are some things that we do better than others and some things that we can always learn from.
One of the benefits of today's meetings is to listen and reflect on the questions that we're asked, the challenges that are given, and to, in a considered manner, go back to our board table and speak to management about the things that we can always improve. As a bank, we're on a journey. We're always trying to do better. We aren't necessarily the best at everything, but we try to learn from everyone. Thank you for your question, and we'll reflect and take on notice your challenge to us today. We go to microphone number four.
Chair, I would like to introduce Max.
Welcome, Max.
Thank you. I work in our cybersecurity department at CommBank. Widespread concern on our floors is the in-office mandate, which arbitrarily forces workers to be in the office on half of our working days. This introduces many issues, but most critically, it measurably decreases our performance and impacts the effectiveness of engineering and cybersecurity teams to the point where it delays responses to urgent situations. As a major financial institute, these issues are vital. Is CommBank aware of these productivity issues caused by the in-office mandate and the potential impact that presents to stakeholders such as myself? How do the benefits of this in-office mandate outweigh the problems it causes?
Well, Max, firstly, thank you for coming along and asking the question today. We take, as I mentioned, all of the feedback seriously, and as an employee, I think it's great that you've come and asked the questions that you've asked. I'll get Matt to comment specifically in a moment. We believe we've struck the right balance in requiring people to work in office at least 50% of any given month, particularly those in our corporate offices. Our frontline staff really don't have an option. They have to come to the branches or go into the contact centers. We don't anticipate any significant alteration to our current policy. We do assess on a case-by-case basis those requests that come from employees specifically on whether to provide exceptions, and there are exceptions. To the specifics of your question, though, I will ask Matt to comment further.
Yeah, no. Thank you, Paul, and just want to reiterate, thank you very much for coming along, Max, and asking the question. Since you're in our cyber team, you know how much importance we're putting on that topic. I really want to thank you and the broader team for all of their hard work. Look, very consistent with what Paul said. We believe that the existing policy, which requires people to be in office for at least 50%, still provides for enormous flexibility.
We do see real value in bringing and having our teams in the office. We see the benefits of that. We do believe there's also scope for personal flexibility. Based on the amount of very high-quality work that our cyber teams have been doing over many years but particularly this year, I think at least from our perspective, we've struck the right balance between flexibility and quality of work and creating the best environment for our teams.
We'll go to microphone number one.
Chair, I would like to introduce Michael Sanderson.
Welcome, Mr. Sanderson. It's good to see you again.
Yeah, good to see you, too.
We both look younger.
I was told at a parliamentary committee hearing where I was giving evidence that the color of my hair gives away my age.
Mine used to be bright red. It's very disappointing.
First things, just a couple of comments. I'd like to make an apology for my friend and colleague, Selwyn Krepp. He planned to be here this morning, but in this digital age, his flight got bumped. It's illogical for him to get here in time. Just another suggestion. This is taking a bit of a leaf out of one of the millionaires clubs, the Macquarie Bank. They have a system where they get through general business first, and then they do all their questions at the end of it. Those who are suffering from bank profit-induced austerity can get a free feed or leave. I found it worked quite well. There was no restriction or whatever. Anyway, questions. My first question. I traveled down to Sydney from the major city of Kurri Kurri, which, by the way, doesn't have a bank.
When the CBA promised to protect regional branches, why did it adopt the ARIA+ definition that can classify regions such as Albion Park, Kingscliff, Lara, Belmont, and Kurri Kurri as major cities, even though other government frameworks treat them as regional? Was the board aware that this sleight of hand definition would exclude such communities from the pledge, and will it now review that classification?
Thank you very much for your question, Michael. As we mentioned, we are absolutely committed to regional Australia and have extended our commitment to December 2030 for our existing regional branches. We do look where there is a higher density of branches closer to population centers. I note your question about the definition, but where there is a reasonable period, a reasonable distance, a reasonable time for branches to remain open, and where we look at the traffic through those branches and the ability of customers to travel from one to another, that is a decision that has been taken. To reiterate, for those branches in regional areas that are open now, they will remain open till 2030. I cannot answer the question any more comprehensively than that.
You did say that with the advent of this new technology, you wanted to interact with consumers on a more regular basis. How do you do that if consumers have to fly, in some cases, to get to a branch because it is too far away, or travel even a half hour? That is shifting the cost onto the consumer on the back of it just does not gel.
I understand your point. We do look very closely at the traffic through the branch, and as I think we have said previously, 92% of all of our engagements, it is probably potentially higher now, is online. We have many customers who only want to operate online or use engagement centers. But where there is traffic in the branch, as I said, we are investing over AUD 140 million in those areas where there is more activity to broaden that physical footprint, so that customers have a better experience where that is necessary. It is a challenge, it is a trade-off, it is a balance. We are the first bank to make a regional commitment, and we have extended that. But very specifically, I think you are getting into some detail. I might just ask Matt Comyn to comment on as well.
Only to add that there may well be other methodologies, but this is a methodology that the industry has used. It is very consistent. There is no change to that methodology. As Paul O'Malley has recognized, we thought it was important to provide certainty. We do have the largest branch network. We have twice as many ATMs as any other financial institution. We are, as Paul O'Malley touched on, making significant investments and notwithstanding the frequency and how many of our customers are engaging with us online, we recognize the importance of having the right branch network to support customers, both in regional and remote areas, but also for some who prefer face-to-face. We also, of course, provide funding into Australia Post that has access to several thousand post offices around the country to also provide many of the services that we would be able to do so in branch.
I do not know if you saw the Australia Post retail inquiry. You have got the CEO there just gutting Australia Post. It is going to be pretty hard to do banking business with a parcel locker. Anyway, I think it is probably enough on that one. I got my second question here.
I think that was two questions, Mr. Sanderson.
I thought it was one. Come on.
I will give you another one, but I know you will be back after this one.
I know.
I will rotate around the room, if that's okay.
Okay. This one to do with preservation of cash and essential banking infrastructure. Your 2026 annual report emphasizes CBA's responsibility to maintain essential banking services, including access to cash. However, in CBA's submission to the Council of Financial Regulators and the ACCC, CBA relied on industry projections that cash would account for just 4% of payments in 2030. Subsequent Reserve Bank research found that cash use had stabilized at approximately 15% of consumer payments in 2025. That's up a little bit from previous years.
The four major bank cartel are seeking a 20-year authorization for a jointly controlled wholesale cash pool while temporary armed guard support expired in June of 2026. What financial benefits, governance powers, and obligations would CBA obtain under the proposed cash pool? What independent evidence shows this will secure regional and remote cash access? Would the CBA support a nationwide whole of system cash network using Australia Post logistics underwritten by the Commonwealth?
I'm sure there was only one question in that, so I'll do my best to answer.
Oh, that is then.
The first thing I'd say is that we think that cash will be used in Australia for a long period of time to come. We spend approximately, I think, Matt will correct me if I've got it wrong, but over AUD 400 million making sure that cash is available and can be distributed in the company. I think one anecdote is there's more cash in circulation today than there has ever been. So CBA is committed to supporting cash and making sure that cash is available as broad as is possible. In terms of the specifics that you talked about, I know Matt has been focused on making sure that we're able to deliver on those commitments, and I'll get him to add some additional comment there.
Yeah. No, thank you, Paul. Look, I think, the most important point would be there is a long-term commitment to make sure that cash is being delivered across the economy safely and efficiently. While the proportion of payments using cash may reduce, there's still, as Paul touched on, a lot of cash in circulation. Understandably, people use cash infrequently but still value it. I cannot foresee a time when cash isn't being distributed around the country. Specifically, because most people won't understand some of the context around what you were saying with a commercial cash pool. In effect, we pay a provider, as do a number of other financial institutions, and some retailers, for cash to be distributed. There's another financial institution which actually does that directly. This is a joint venture across the major banks, precisely to the question of what would we anticipate our economic benefit to be.
Zero is the economic benefit that we would anticipate to be yielded from the commercial cash. We see it as a service that needs to be provided. The purpose of the joint venture is to have the parties who are otherwise bearing the costs, basically, being able to do that on a break-even basis to ensure sustainability. This is an important long-term issue for which we are committed to making sure that we are making the necessary and suitable contributions to ensure that cash is delivered safely and efficiently.
Why don't you push the-
Chair, we're going to pause there, if we may.
I just want to get a quick comment on this. Why don't you push the federal government to undertake a properly funded national cash distribution system? You've both got them to do a Royal Commission. I'm sure young Jimmy would, if you told him to, he'd do it.
I'll take that as a comment. Thank you. We are going to move to microphone four, but I do know you will be back, and you are very welcome to ask further questions.
Thank you.
Chair, I would like to introduce Mr. Vincent Meyer. Welcome, Vincent.
My name is Vincent. I similarly work at the bank in cybersecurity as well. We noted in your annual report that the headcount in your offshore subsidiary in India has increased again. That being said, at a much smaller rate of growth compared to previous years. Reports this year also note that CBA has leased a new building in Bangalore, able to fit thousands more staff, and this has heightened concerns about the movement of work, and with it, the data that goes offshore. From this, I have two questions. One, what is CBA's long-term plan for the work and consequently the customer data handled in that work in CBA India? Second of all, what is CBA doing to ensure it retains sovereign control over, A, customer data and, B, sovereign capability for these critical functions, and also maintaining the risk around this data?
Thank you very much for your question. So just by way of context, before we established CBA India, we did buy services or get support from external service providers in India through contracts. We took the view, board and management, that we should actually have a standalone CBA business in India, a part of the whole group, that actually would see us transferring from third-party service providers into a CBA employee direct business. We thought that gave better career progression for the people that we were using in India, brought them into the CBA group. We could then manage and make sure that the work was allocated in the best way and the most efficient way coming back to Australia. We have also made sure that the broad and widest amount of work possible is done in Australia.
But as we go to financial crime, in particular over the past five years, as we have had to ramp up dramatically the amount of people focused on financial crime, as have all of the financial institutions in Australia and around the world, there wasn't necessarily the capability and experience in Australia to meet that need such that we could comply with our legal obligations. So we did add people in India in that context. I think you will find that the numbers are reasonably stable. You mentioned about a new building. We have people in a number of buildings. We are trying to consolidate that again for better understanding and better capability.
In terms of privacy, customer data security, we have very clear controls as to how all of that has to be managed within the CBA context, and we make sure through our line one, line two, and line three controls that all of those requirements meet both Australian legal but our own policies and procedures. So that is an ongoing and important aspect of the group. But if I come back to the broader question, as I commented with Paul a moment ago, we have to invest in Australian skills and capabilities. You are in the cyber team, we are investing heavily in the cyber team. We have great capability in Australia, but the risk and opportunity to do better in cyber requires us to invest in skills and capabilities, and we are doing that absolutely substantively in Australia.
But we do need to look from complementary skills all around the world, and we have hired people from offshore into Australia to complement the teams. Matt is going to take us through a little bit more detail to address some more of the specifics in your question. Just a couple of specific points. One, the building that you are referring to, the establishment of that facility has been underway for many years.
That is important because I also want to say that there is no plans to increase the number of employees. Paul has talked through in terms of why the facility was established and predominantly, the basis of what sort of work we are doing there. So number one, I think to your broader question, no, we are not planning to increase the number of employees in India. Secondly, all of the data and systems of record remain in Australia.
Thanks for your answers.
We move to microphone number one. Chair, I would like to introduce Allan Goldin.
Welcome, Allan.
Hello, Mr. Chair. How are you today?
Very good. Good to see you again.
Yeah. It's nice seeing you. You do look younger. I don't. I always look older these days, unfortunately. I'm here representing the Australian Shareholders' Association. We're representing, we have proxies. We have 2,645,000 shares, which is entrusted to us by 1,031 shareholders. I won't make a comment. This is not a comment or a question, but if you want to talk about how Macquarie conducts their AGM, as someone who monitored them for a number of years, I have a different view than the speaker before me on their. I think this is a better procedure. Putting that aside, I have a few questions, but I'll limit myself to two questions, and if others don't ask the other ones, you'll see me back later on.
Thank you.
My first one is almost a two-parter. It is about New Zealand. After failing to monitor compliance issues at ASB, which resulted in a record civil fine, what I want to know in my first part is what actual changes have been made to ensure that the financial abuse and vulnerable customer controls are operating efficiently here? Both of those words were said in the judgment, by the way. In addition to the identified cultural issues, there are financial ones. In the June quarter, ASB won only 12.2% of new mortgages, well down from your usual share of 20%. One of your key management people here in Australia is moving, as we speak virtually, from the Institutional Bank to lead ASB Bank in New Zealand. What is her move going to do to change the financial situation there?
That is a broad-ranging question, Allan. I think it goes to the governance of our subsidiary in New Zealand, ASB. First part of your question, I think CBA has been on a journey from the Royal Commission. I mentioned the Prudential Inquiry in my speech. The remedial action plan that was focused on improving our governance and our frameworks, to make sure that CBA had the right policies and procedures, the right risk culture, the right governance, the right line one, two, and three operations within the business. Both to maintain our ability to engage with the current business, but also to look to the strategy and the strategic risks into the future.
ASB is going through a similar process. We had changes to our board, our management team. We did a lot in Australia. The ASB board is driving a similar change with the support and engagement of the CBA board and the CBA management team. The CEO of ASB has been in that role longer than Matt has been in the role of CEO here in Australia, and it was entirely appropriate that that person was ready to retire.
We went through a pretty good, rigorous succession process. Sinead, who has run Bankwest, has been our Chief Operating Officer and a Group Executive for the Institutional Bank, is going across to New Zealand to be the CEO of New Zealand. A decision that was made by the ASB board but has the full support of the CBA board and management team. Sinead actually spent time growing up in New Zealand in her early years, so is quite familiar with New Zealand. I think she actually even goes to the All Blacks. We will put that.
Good lady.
Yes.
Okay. There is no It is just this, again, there is better oversight than what happened before because you had to give money back to people, you got fined because it was said your oversight was not good enough. So is there more controls put in place? Are you doing the same sort of controls that you do here?
I think very specifically to that answer, the CBA policies and procedures are the policies and procedures that need to be over all of our subsidiaries, except where local law requires a different answer. So we are being more focused on that perspective, absolutely. There has been renewal at the ASB board level. We have brought on more banking expertise, both from globally and domestic. Alistair Currie, who is on our board, has gone on to the ASB board, and Alan Docherty, who is the CFO, has also gone onto the ASB board.
There has been governance renewal at ASB, which I think will help specifically address the points of your questions, which is to make sure the consistency and capability of the governance of ASB is as consistent with that of CBA as we can possibly make it, subject to any challenges or changes that New Zealand law actually requires. And I think Matt Comyn wants to just elaborate on some of my answer.
Maybe just a couple of quick points. One,
Vittoria, who is the CEO of ASB, I think has done a very good job in that role and throughout her career at CBA, which has extended for more than 2 decades. In saying that, of course, it does not imply that there is not more work to do. Like all of us, I think we can always identify things that we would like to be doing better. We are fortunate to have someone of Sinead's quality, and the depth of succession and capability inside the organization. ASB has and will continue to be a high priority for the group, and Paul has touched on a couple of the more recent changes. Then perhaps lastly, I will just distinguish between the business performance versus some of the regulatory.
Having been through the business performance, I think any changes in the volume, I think you were referring specifically to home lending. It tends more to be about the economic returns that are available, specifically the home lending margins inside New Zealand can be very volatile. I think the team has done a good job to make sure they are not underwriting or originating mortgages below the cost of capital because, by definition, that is value destructive.
Great. Okay. My second question. In your annual report, in June, the total impairment provision, and I understand that it does not mean that those businesses and individuals are in default or anything else. It means that you are having a watching brief on these ones. But anyhow, that provision was AUD 6.37 billion according to your annual report. What I want to know is, has that increased?
Do you want to talk to the September adjustment?
Well, the numbers that we can talk about today are to 30 June. Obviously, we have finished our September quarter, but we will be releasing the results of that in November. I think, look, we spoke about a number of trends, which I think it is reasonable to say would be continuing to be evident, which is, one, we are maintaining provisions well above the central economic scenario. We think it is important to have loan loss provisions that give us the capacity to deal with a range of different economic scenarios. This is one of the topics that has been on our minds for many years. I think it is very important that the organization remains in a position of strength. Even though our forecast economic scenario has not changed dramatically, we certainly have the capacity to be able to support customers at a much more adverse perspective.
Secondly, in the context of higher rates and slowing economic growth, we are acutely aware of some of the pressures that are being felt across the economy, obviously in households, and more broadly. Whilst we did not see and we are not anticipating a rapid deterioration, it is the time to be watching very carefully, but also, of course, to be making sure we are doing everything that we can to be supporting customers where they need that.
Okay. Thank you. Hopefully other people will ask the questions I want to ask so you will not see me again.
That's right. Alan, did you want to add?
Oh, just a specific response.
Sorry, can we just go to Alan? Yeah.
Just a specific response on the-
Can't hear you.
Just a specific response on the number that you quoted. That was an increase on the That was a June 2025 provision.
Yeah.
That was a comparative number. That was about AUD 100 million increase on the June 2024 provision. At June 2026, we put another AUD 100 million on those provisions, just in recognition of the rise in geopolitical and macroeconomic uncertainty. Yes, those provisions have increased over the previous two subsequent financial years.
Okay.
That's the point I was-
Yeah, we'll wait until November, and we'll see where it is. But there is a natural increase that is happening there.
Yeah.
Okay.
Yeah, that's the comment I was referring to. Thanks, Allan.
Thank you.
We go to microphone number six.
Chair, I would like to introduce Kylie Level.
Welcome, Kylie.
Thank you. My question is regarding regional branch or sorry, retail branch closures. I work for the Finance Sector Union, and the FSU welcomes CBA's recent announcement to extend the moratorium on regional branch closures until the end of 2030. While this provides certainty for customers, communities, and staff in those regional areas, we are still seeing a continued closure of metropolitan branches. Since the moratorium was first announced in 2023, over 100 metropolitan branches have closed, and already this financial year, that is within the last three months, CBA has either closed or announced the closure of 26 metropolitan branches. With that, my question is two parts. Will CBA extend the moratorium to stop the continued closure of metropolitan branches? How will CBA provide the certainty for its metropolitan customers, communities, and staff?
Thank you, Kylie. Thank you for your question. I think customer engagement is just really important, whether it is online or physical. As I mentioned earlier, the way customers bank is changing, and we have to actually change with what our customers present. That sometimes comes with challenge. There are now almost 10 million active app users and more than 2 million customer interactions across voice and messaging services each month.
The investment to support customers who want to interact that way is really important, and we will continue to focus on that. We are proud to have Australia's largest branch network and the most Bank-owned ATMs, and we do support Australia Post. From a physical perspective, the team is always looking at the best way to make sure that we engage with customers. Some branches we are expanding because they're higher traffic, higher demand from our customers. We will continue to look at the right way to present that network. We've made the commitment today not to close any of our regional branches at least until 2030. We do have to engage with the way customers engage with us and make sure we appropriately provide the services that they need.
Thank you, Chair.
Thank you very much. We go to microphone number five.
Chair, I would like to introduce Mr. S.K. Peng.
Welcome, Mr. S.K. Peng.
Good morning, Mr. Chair and board members and the management team. Thank you for your work for the past year. Thank you very much for all the cybersecurity staff that attend to this meeting. This question is about AI, and I am sure many of the shareholders will be concerned their shareholders' value and our bank account safety with Commonwealth Bank. In view of the recent Medicare and Hugging Face intrusion incidents, what kind of measures does the bank have taken to make sure that we will counter or fight for this kind of incident in the following three aspects? First, will the company take legal action against the intruder despite their size, even if they are very big AI companies?
Second, what kind of team and AI tools are in place to fight for this kind of intruder incidents? Can the bank, for example, react within 24 minutes, like Hugging Face has done? Third, does the bank have human-oriented AI strategies? That is to say, have human oversight on its AI development cycle and moreover, empowering our people, human resources, instead of just using AI to cut the human resources. Thank you very much.
Thank you. There is a lot in that question. Cybersecurity is an incredibly important tier one risk for the bank and for all of Australia. You have referenced activity outside of the bank. We need to make sure that we have got the capability and the tools amongst our people, and some of them are here today, to actually ensure that we can understand AI risk, cyber risk, and take the steps to protect the external perimeter of the bank, but to monitor the bank's engagement with potential cyber threats. There is activity every single day on that through so many different challenges. It is an incredibly important area of focus to us. I think I mentioned earlier that we spend over AUD 1 billion a year making sure that we are addressing scams and frauds and cyber risks. So the investment is dramatic.
It is in people and capability that is really important in developing those skills in Australia that is important, whether it is at CBA or across the national spectrum of businesses and government. A credit to Matt and the team who spend a lot of time dealing with government agencies and supporting other Australian businesses, large and small, to both understand and specifically support them with their cybersecurity arrangements as well. In relation to the hypothetical of legal action, that is one for another day, I think. Each cybersecurity threat we address in the moment, but we also have the systems in place to deal with that. If there is ever an event, we would hope that that does not occur, but we would deal with that in the moment.
The entire focus of our technology is to make sure that we can better serve our customers safely and securely, and scams and frauds prevention is a critical part of that. That we give our employees the tools and time to learn to use those tools to support us on cyber and to be able to do that more quickly. The one thing about AI is that cyber activity is relentless and much more speedy in its ability to identify vulnerabilities. Matt has pivoted the organization quite dramatically to lean into that increased risk as well. It is such a broad topic, and you ask so many questions, I will stop there and ask Matt to elaborate on areas to complement my answers.
Thank you, Paul, and thank you very much for the question. As Paul touched on, look, there is a lot in that. I will try and answer fairly succinctly to your three points. The first, I think, was around, if there was a cyber event, would we be, my words, dissuaded from taking legal action depending on the origin or the size or scale of the company? No.
Just like if there are cyber attacks like what is attack on the Medicare system, will the bank take action?
Yes. We, of course, would reserve any of our legal rights. By far and away, the most important thing is also then how do you protect and defend the organization and then detect any unexpected or unauthorized activity. Paul touched on it briefly. Cyber has been for many years one of the most important risks to manage. There's no doubt in my mind. I think it's certainly one of the risks that has deteriorated the most insofar as I think there's much heightened cyber risk globally. It is, of course, a huge priority for us. In the last financial year, as Paul touched on, in the areas around cyber financial crime, scams, fraud, we invested more than AUD 1 billion. It's fair to say we have increased our investment in the current financial year, in FY 2027.
Secondly, I think your question was around, specifically, Hugging Face 24 minutes. Maybe I won't go into the stopwatch measurement, but it is necessary. One of the things that is required is to be using the models internally to both respond to any external threats and also to be managing. We have a very capable team, to my earlier answer, which we're very grateful for having such skills internally. There is quite a lot of sophistication to be able to run a lot of models and to be using those to be both securing your systems and defending them in as close to real time as you can. Then the third was really around the human loop. Across many aspects, there are a variety of different controls, and this is why I would say it is the most important thing.
Ultimately, we retain responsibility for the use of any of those AI tools or models. Of course, often human has to be both overseeing the totality of the system and in some areas, we're moving to increasingly the need to be able to respond, like I said, as close to real time. This is a very challenging dynamic, one that's rightly occupying a lot of our time and investment. Most importantly, using the tools and capabilities that are available on a global basis, supplemented by what we think and hope is the best cyber team in Australia to defend the organization and to protect our customers and the community.
Thank you very much. In response to the second part of the questions, I understand that there are regulatory requirements about business continuity and operational resilience. There is a set of scenarios that the bank will respond within a certain time frame. I hope that the bank have established cyber securities and this kind of AI intrusion instance as one of the scenarios. Thank you.
Thank you very much. I think just to add to that, there is a requirement on the bank through CPS 230 to make sure that we do focus on resilience, and there are scenarios undertaken with that. There are minimum service requirements. There is oversight on that by the Australian Prudential Regulation Authority. There is a whole mechanism within our risk frameworks to make sure that we do focus on resilience, and it is incredibly important. Thank you for your questions. If we go to microphone number two.
Chair, I would like to introduce John Lisha from Cairns.
Welcome, John Lisha, all the way from Cairns.
Good morning, board.
If you could just speak into the microphone.
Oh.
Thank you.
Good morning, board. I would just like to firstly thank the board and all the CBA staff who have contributed to the AUD 11 billion profit. I am very happy that you have decided to expand the regional program of keeping banks open. Mine is more of a request that leads to a question. Before I say that, I would just like to mention my father, 94, who has CommBank shares, but he cannot attend today. He is still going, which is good, and his big concern was about what I am about to say next, is there any scope to reopen the Mount Sheridan Commonwealth Bank? I am aware their branch there, that is part of the Cairns area. There is massive development going. There are about 40,000 homes going to be built in that Southern Cairns area.
Particularly so because after Cyclone Jasper hit the northern area, people have stayed away because they had a lot more flood there. Getting back to the actual request to reopen that Mount Sheridan branch. A lot of the statistics were based on dodgy, that they used foot traffic and transactions because when it closed in 2022, the statistics used, foot traffic and business transactions and so forth were down low. That is because in the previous 12 or 2 years, due to various premiers shutting down states, the staff in those branches were redirected to other areas.
You could not judge the foot traffic. My comment is, and request is, it is not a complaint, it is just a request. All the staff in the areas of Cairns are great and as we lived in Brisbane and Coolum, and they were great too. Is there any scope to reopen the Mount Sheridan branch? My 94-year-old father would be very happy.
John, thank you very much, and thank you for coming all the way from Cairns, and please pass on our best wishes to your father. He has been very well represented by you today. I am going to take that question on notice and look to my CEO on the left to see if he can add some specific answer to that one.
Well, again, thank you for the question. Of course, we will take any personal requests on notice. I do know that, or understand the nearest branch is about 6 km away or so. I recognize that it would most likely still be far more convenient for your father to visit the existing branch. I think as Paul has touched on a few times today, we will continue to try to strike the right balance between making sure that we are supporting our customers with the largest branch network. Also recognize that customer preferences and the way our customers are interacting with us is changing very rapidly.
That is why we have been prepared to make longer term commitments in regional areas. You touched on some of the measures, but ultimately, obviously, more customers who bank with us in areas where we are the last bank or we are one of the few financial institutions, is the key determinant of whether we stay in that area over the long term. As I said, I will pass your request onto our head of retail, Angus, who is sitting in the front row here.
Thank you very much. I am going to take another three questions in the room, and then we will go online, but we will come back to the room and go backwards and forwards a little bit. If we go to microphone number three, please.
Chair, I would like to introduce Mr. Robert Caterson.
Welcome, Mr. Caterson.
Thank you, Board. Thank you for what a wonderful performance in this year with this bank, in compared to the other three banks operating in this country. It is a wonderful indication that we have got a good board and a good management team with the bank. Also, with your support of female sport in this country with the Matildas and other female sporting entities in the community. Specifically, my two questions are, we had the Telstra incident recently with their minor shutdown of half the country, and obviously Optus had a similar event just recently as well.
Are we making sure that our relationship with our telecommunications companies, partners, whatever you wish to call them, are making sure that we're still open for business and making sure that these companies make sure that these systems still operate for the benefit of the bank and the businesses and the individuals that they support? That's the first question.
I'll answer that one first, if you like.
Yes.
First, thank you for your comments about supporting women's sport. As I mentioned, we've got an incredibly committed workforce across CBA that's doing everything they possibly can every day to deliver the best customer experiences. To our employees, we're extremely grateful for their commitment. In relation to working across the whole of the national infrastructure to make sure that Australians aren't impacted through cyber outages or technical outages, the board and management take that responsibility extremely seriously. We have to make sure that CBA has the right cybersecurity, resilience, and technology platforms and backup plans to make sure that if there are events, that we can respond very quickly to make sure services stay at the best availability possible.
The team, particularly through Matt, but also the technology team, does work with other Australian companies, as I've mentioned, and specifically with Telstra and Optus, to share learnings, share experiences, and to provide the support. There is a substantial interdependency of companies to make sure that we collectively can support Australians, whether it's through financial products or telecommunications, but just doing daily online activity. Yes, national resilience and CBA resilience are extremely important, and it's an area of focus that we invest heavily. From an engagement perspective, and Matt may want to comment, Matt and the team engage directly with other large and smaller Australian companies to learn from and provide support to any activities associated with service delivery.
Perhaps just to underscore a couple of things. The importance of this topic. As all of us live our lives more digitally, the service continuity and recovery for all critical infrastructure is incredibly important. We work very closely with the companies that you mentioned and a number of others. Our teams also have the opportunity to debrief and understand privately anything more that would have contributed and also what we could learn from. Notwithstanding, this has been one of the best years, touch wood, that we've had for many years on service continuity and reliability.
I add that only to say that we're all fallible. It's one of the things that truly worries me in this role. Is the implications, which is why we spend so much time and investment and building resilience and recovery and different scenarios and testing those different scenarios. I also recognize the fallibility of any company, of any technology solution. Maybe just to reassure you with how seriously we take this issue.
Yes. My second question goes to the whole range of things that you mentioned in the opening video about cost of living, inflation, and everything like that. Recently, we've got the Reserve Bank, and the Reserve Bank's talking about future interest rate rises based on inflation, which is totally out of the nation's control. The nation is not spending like wild sailors, going down to Harvey Norman's spending money on big screen TVs. They're spending money on basic everyday items like petrol and food, right. A lot of these inflationary pressures are internationally based at the present time. How dare the Reserve Bank place more costs on not only itself, the Australian government and the taxpayer, but why should those decisions impact interest rate decisions that the bank has to make and pass those on to the customers?
Also in terms of recent debate about credit card surcharges. Well, I'm a bank shareholder, and I'm part of this business, and I think, well, if I go to a coffee shop or if I go to somewhere where there's been a surcharge, they're entitled to run a business, so are we. So if we go, and I know Matt Comyn goes to Parliament every 12 months along with all the other bank CEOs and gets grilled by the government senators. Well, why can't we do the same thing and present our case as responsibly and assertively to make sure that we look after our business interests and not just kowtowing to either Reserve Bank or Mr. Chalmers?
Thank you for your question, Robert. I think cost of living pressures in Australia are impacting everyone, and the causes of that are widespread. You've mentioned many of them, but I think the first thing to acknowledge is that everyone's feeling that pressure at the moment, absolutely. Inflation certainly contributes to that. The Reserve Bank governor talks to that, and they have an independent mandate to try to keep inflation within a range of 2%-3% and to support employment. Inflation has been, I think in August it was at 4%, so inflation is outside the range. Inflation is not good for the country. Increasing prices is not good for the country. I think your question goes to the point as to what's the best way to address that.
As a bank, what's in our control to make sure that we have a resilient balance sheet so that we can support Australians. One thing we've learned, and particularly through the COVID pandemic, is that when times are tough, as a bank, we've got to stand up and support the breadth of our customers to the best ability that we can. That can be through providing policy feedback, which Matt does very well, and you've mentioned some of those forums on what should be the right tax policy for Australia. What are the considerations associated with that? What do Australians want? Australians want more support. That comes with challenges as to how to fund that. How do we get inflation down? The one thing that is very challenging on that is productivity.
We've been talking as a bank, and Matt's been talking, as have the leadership team through strategy sessions on the challenges of improving productivity in Australia. Because ultimately, we are able to better handle inflation if we can increase the supply of all of the goods and services that we use at a lower cost. Until we address productivity, it will be challenging to actually get everything back to a point where cost of living pressures aren't easy. We also know there are external shocks with fuel. We feel that immediately in our wallets every day when we go to fill up our vehicles. I think productivity is really important. As a bank, we lent AUD 40 billion to businesses last year.
We have to support customers across the whole of Australia by making sure that we run the bank, and I acknowledge your very first comment, by making sure that we collectively run the bank as effectively as we possibly can, then we've got to have the best balance sheet to continue that support to Australia. There are no easy answers at the moment. But the one that I would suggest we need to focus on as much as we can, and it's everyone's opportunity, regulators, governments, businesses, is just to focus on working how to improve productivity. I can go round and round in circles because I think all of us read the papers, all of us pay the bills, all of us have a view, an opinion.
We're trying to do the best we can to support all of our customers through what is an incredibly challenging time. As I mentioned in COVID, we learned that by supporting our customers, we help them to get to the other side of the COVID pandemic. We need to make sure we are supporting our customers get through this cost of living crisis and provide counsel and support as best we can as we do that.
Thank you.
Thank you very much.
One more. You mentioned COVID. This was the only bank that supported its shareholders through that time compared with the other banks. Thank you.
Thank you. I think that just highlights the importance of having great people and a strong balance sheet. If we go to microphone number one.
Chair, I would like to introduce Peter Starr.
Welcome, Mr. Starr.
Good morning, Paul. How are you?
Very well, thank you.
Good morning, Matt, and to the Head of the Business Banking over there on the left, to Mike as well. You've touched on some things in your speech there. We talk about the Royal Commission and things like that and what the bank's been doing, and I think that's a credit to you and both Matt, that you embrace those things and turning around things, which is good. I noticed that some concerns I had in relation to that I raised with Matt, and Matt acted very quickly in relation to his picture and Alan Kohler's picture being spoofed for people to open accounts and things. These are the things that concern me, and I know it concerns others in the room.
It was mentioned yesterday at the Telstra, and I raised it with Vicky and Craig Dunn about for everything good in AI, that the concerns I have and others have, and other shareholders in the room about, AI can just put Matt's picture and Alan Kohler and tell people open accounts. It astounds me that people actually go and do that thinking that Matt and Alan Kohler are a thing. Thank God, Matt's got it pulled down, but maybe Matt could speak to that and about the other issues that are going on with scams. I have a second question, but I'll wait for those answers. Thanks, Paul.
Thanks, Mr. Starr. Scams and frauds are just a very toxic kind of preying on Australians and investment scams in particular and with the use of AI. AI is so good now that you sometimes do not know whether you're talking to a real person or not. I'll get Matt to talk to the specifics, but just to reiterate, we are spending a vast amount of money to both understand the threat, but also to repulse the threat. The bad actors are working harder and harder to actually try and get money off Australians. I think understanding how proliferating the scams can be is important. One thing I'll acknowledge is that Matt and the team, our cyber team in particular, have spent a lot of time engaging with government on the scams prevention framework, which will come into effect in March.
As I mentioned earlier, making sure that there's a collaboration between the banks, the telcos, and the platforms that host a lot of that activity, and that there's a sharing of information real-time to take down system-wide the avenues that have been used by scammers is really important. There are some gaps in the national defense at the moment, if I put it that way, that the scams prevention framework, when it rolls out, will hopefully address, particularly by bringing in those platforms that actually are outside the scope at the moment and who host a lot of those scams. That focus is really important. To the specifics of Matt.
Just to add. Historically, many of those scams were sort of poor quality and perhaps to varying degrees, it was easier to discern the difference. I think we should prepare for the reality that the quality of those scams and the likeness or authenticity will be harder to detect. That said, I will never be promoting an investment on any social media. The quality will get better and better, unfortunately. Which again, highlights why it's so important that we are using the technology to protect our customers. As Paul touched on, I think the most important thing over the next 12 months will be the rollout of the scams prevention framework. What that simply means is there's obligations on financial institutions and telcos, but also the tech platforms, a number of whom operate globally, and there's a requirement for them to operate under those laws and conditions.
One of the aspects of that is exactly in the example that you raised, when something like that is detected, then there is a timeframe by which it needs to be taken down to minimize the number of people that could be deceived. I think this is an important and complex piece of legislation, but one that when it is executed and done well, will strengthen protections in Australia and hopefully makes Australia less of a target for a number of the offshore jurisdictions which specifically target Australia in these areas.
Thank you for that. Secondly, Paul, and again, it goes to Matt, is that I've noticed that, thanks to you, Matt, that Halis Yaman from CommSec, who you organized to work with me and fix things up is absolutely tremendous and I'm very keen how the AI technology now in CommSec's being used about to summarize things and that, and I think that's a very good thing, Matt. Again, I just want to personally thank you. We've caught up at a number of the things at the Hilton in March, and you always ask me, did I get things out of that?
Thanks to you, I got a lot out of it. I know that when you speak at those events, people really focus on what you have to say because it's really important. Just generally for the shareholders in the room, if you haven't listened, a week or so ago, Matt was interviewed by Alan Kohler. I can highly recommend that to the shareholders in the room just to have a listen. I think it's well worth to listen to that. Again, I want to thank you, Matt.
Thank you very much, Mr. Starr, and for your gracious comments. Did you have anything you wanted to add, Matt?
Well, only I guess to confirm the interview with Alan was real in that instance, unlike some of the scam ads. I know that Alice and our CommSec team enjoys supporting you. It's nice to see you.
Thank you, Matt.
We'll go to microphone number six.
Chair, I would like to introduce Michael van der Klaauw.
Welcome, Michael.
Thank you. I'm an employee and engineer in the SRE team. Chair, the CBA's latest published WGEA figures show a median total remuneration gender gap of 26.8%. During enterprise bargaining, the bank rejected incorporating specific gender pay gap commitments or targets into the enterprise agreement, citing its existing reporting and governance processes. Does the board consider those existing arrangements adequate? If the current gender pay gap is unacceptable, what measurable reduction is the board committed to achieving over the next three years?
Thank you, Michael. I think you ask a question on an incredibly important topic, which is to make sure that for equal role and experience, that there's equal pay. We focus on gender pay gap in two broad areas. One is to make sure that when we have people doing jobs, that they're paid the same for doing those jobs. As experience goes up, that's reflected. The WGEA data you're talking to looks at the total pay of females versus males within CBA. We have a structural area which we have to invest in. Tech jobs tend to get paid more than direct customer service jobs and tech jobs, and it kind of goes all the way back to university and education, where there tend to be more males going into STEM roles, science, technology, engineering, than females.
We have to start right back at the beginning and make sure that we support females to finish maths and sciences at high school, to go more into STEM at universities, and then attract them at an equal rate or a higher rate than men into the engineering roles where we're increasingly investing, because that's fundamentally in banking where more of the higher value jobs are.
In terms of your question as to what we're doing, we're absolutely talking about it at the board, but we've got to focus on that investment to make sure that we're actually supporting young women with the best opportunities to get the higher paying jobs. That, to me, is the fundamental issue within the WGEA that that data highlights. It's not something that's just domain to the CBA. It's across financial institutions, it's across all companies in Australia, and I think it's a very important area of focus.
I have a follow-up. Chair, the bank also relies on existing reporting and governance processes, but the published WGEA figures are too aggregated to assess whether gender disparities exist in promotion and remuneration within comparable employee cohorts. Does the bank conduct longitudinal analyses of these outcomes by gender, grade, and job family? Will it publish appropriately anonymized results so employees and shareholders can independently assess whether its measures are working?
Yeah, thank you. We provide focus on gender balance at board, ELT, group executives, all the way through to executive managers, and we have actual targets to make sure we get that gender balance right, and we're working on those targets all of the time. It does take longitudinal focus. It's an area that we have to keep investing in, making sure that we're assessing having the right group of people applying for jobs, supporting diversity through those applications, making sure that we have assessment and support so that there's not bias going through those decisions, and that making sure in job families, as I said, that there is deep analysis to ensure same pay for same activity. The board focuses on that. The management team focuses on that. We engage on that all of the time.
We report our targets, and we do provide commentary on that, and we do the WGEA tape reporting. Internally, it is much more specific, and I think we're comfortable with the way that reporting is. I think your question is, it's the same question that directors and management ask of each other every time we look at that issue. I'll go back to your first question. Australia needs investment to make sure that we get gender diversity into those jobs with really good opportunities into the future, and it's an area where we can all improve in supporting that focus.
If those analyses are done though, surely you can commit to publishing them.
I think there's a lot of things that we are asked to do, and we'll continue to revise our processes and our reporting. We get very substantive reporting across so many aspects, including how we support employees. I'm going to leave the answer to that question there at the moment.
Thank you.
Thank you very much, Michael. I think we're going to go online now for some questions for a period of time.
Thanks, Chair. We have a question from shareholder David Bryce. Does CBA consider AI technology a threat to how CBA operates as a business, considering CBA is renowned not only as a banking institution, but as a technology company?
I think we see AI as both an opportunity for the bank and for Australia, but not without its risks. I think there have been many questions today about cybersecurity in particular and Mr. Starr's questions around scams and frauds. AI will certainly improve the bad actors' ability, whether it's cyber or scams and frauds, but it gives us the opportunity to actually make sure that our controls are more comprehensive, that we can respond to challenges more quickly. We can improve the speed with which we patch systems, for instance.
There's an opportunity which I think Australia nationally and businesses individually and individuals all have the ability to participate from. But there is absolutely no doubt that it brings threats with it. We have to understand both sides of that equation. CBA is investing heavily to make sure that we have the right people with the right tools and the systems and processes, and the right thinking around where those threats might be to address that challenge.
Chair, we have a question or a comment from shareholder Ian James. CBA needs more branch staff and better security like it had previously. When asked, staff agreed that removal of tellers is not good and exposes customers to risks. Also, talking to staff in public areas doesn't allow customers privacy or security. Staff are stressed and always apologizing for long queues and wait times. Don't make them apologize, just fix the staffing problem.
Yeah, thank you very much. I think we take all of the feedback seriously. We survey ourselves, and as Matt Comyn mentioned earlier, our staff engagement under the current methodology, which has been going for some time, is as high as it's ever been. That doesn't mean that our frontline staff don't have challenging experiences. We note that staff safety, given the cost of living crisis, becomes more challenging because customers are feeling pain and they can be absolutely appropriately engaging with our staff at times and other times, not so much.
So investing in the right security, the right balance in the branches, the right branch footprint, which as I mentioned, is bigger than any other bank or institution, financial institution in Australia. Getting that balance right is important. We have 16,000 staff engaging with customers every day. We take what they do seriously. We do our best to support them, but we also take the feedback as such that you have just provided seriously as well.
Chair, a question from shareholder Mary Utzo. Waiting times experienced on the 13 22 21 line are still not fully addressed. About two months ago, I rang the number, and after waiting 10 minutes for any response, the line was closed. I rang a second time, the same thing happened. I had to ring three times to finally get a reply. This shows bad service.
I am sorry you had that experience, and I understand that waiting can be frustrating. As Matt mentioned earlier, we have got the heads of the businesses here at the moment. I think they will be taking feedback specifically as it relates to that line and to the extent that there are issues that need to be addressed, they will be addressed with.
Chair, a question from shareholder Tracy Farley. Has CBA considered the broader economic impact of replacing human workers with AI, including the effect on household incomes, consumer demand, and its customer base? Does CBA believe there is an ethical way to use AI?
I think the answer to the last point is absolutely yes. AI, as we mentioned a number of times, has both substantial opportunities to improve the customer experience, and to support employees, sometimes taking away more mundane work, but giving us the opportunity, whether it is in cyber, to respond to more threats. If it is in customer, to actually respond more quickly to customers' needs. In areas where, we were talking vulnerabilities and how people are challenged through the cost of living crisis. Some people want to talk to a human. Some people just want to report their issue using technology. So having both avenues available and available effectively is really important. How AI evolves is going to be really important.
And in supporting our staff and making sure our staff have the best opportunity, we are investing in skills and skills evaluations and prompting our employees to take time to actually develop their skills and to potentially take postings in other areas of the banks to actually grow their opportunities as well. We see almost a democratization of the benefits of AI being incredibly important. There have to be customer benefits. There have to be employee benefits. We need to get some productivity out of it, but it is all work in process, but an area of focus that the board and the management team are taking very seriously.
Chair, we have a question from shareholder GA Smith Super Proprietary Limited. Is the company always going to be a big fish in a small pond, or does it have plans to expand to other markets such as Southeast Asia and the Pacific regions?
CBA is very much focused on the core markets of Australia and New Zealand. We have in the past expanded into an Asian footprint, but we're stepping back from that. We do have offices in the U.S., the U.K., and in Europe to support our Australian customers in their activities in those countries or offshore companies that come back into Australia. I'm not sure that we're a big fish in a small pond. There's a lot of competition in Australia.
There is so much more we can do to support Australians and New Zealanders meet their financial needs and build a brighter future for them, that we also invest heavily in, on which to get a return for shareholders. I wouldn't say that we're interested in expanding offshore. I think what we want to do is do a better job in the markets that we are in, because we see so much opportunity to improve, to grow, and to be successful.
Chair, this is a question from shareholder Julianne Slako. Mr. Comyn, AEMO forecasts East Coast gas demand to decline substantially as electrification accelerates, while the federal government's gas reservation policy is intended to ensure adequate domestic supply. Further, the Grattan Institute's recent Out of Gas report makes the case that gas needs to be treated as a declining backup fuel rather than a growth industry. Against that backdrop, does CommBank consider entirely new export scale gas provinces, such as the Beetaloo Basin, unnecessary for Australia's future energy security and affordability needs?
Thank you. Secure, reliable, and affordable energy, including through the renewables transition, is critical to underpinning Australia's economic prosperity. According to AEMO and others, gas will remain important for peak reliability in some industrial uses. Specifically, they say, as we transition to renewables, there does need to be some gas peaking capacity to firm renewables. That's really important. Recognizing the role of gas in domestic energy security, the Australian government's announced a domestic gas reservation scheme, which if passed by Parliament, will be fully operative on the 1st of January 2028. The existing government sees that some level of domestic gas reservation is important.
To the specifics of your question, our financing of the fossil fuel sector is subject to our environmental and social framework, and it puts restrictions on our ability, either by definition to glide paths, transition plans, or new project financing to brand new gas fields. It's pretty clear as to what our obligations are under that framework. I think I will leave it there, but we've been very clear. We've had good engagement. We've been absolutely transparent in our sustainability report, and we're really focused on making sure that we meet our transition targets. The E&S Framework helps us to do that.
Chair, this question is from shareholders James and Catherine Bates. Why was the Spearwood branch closed and customers not given notice? I turned up at the branch only to find both the building and the ATM closed. I used the ATM regularly and the bank facilities occasionally, but was given no prior notice of its pending closure. I now have to travel over 10 km to access banking services. Not good enough.
I'm sorry you had that experience. I understand as we've had the conversations today, how important branches are to so many of our customers. Branch closures are assessed on a case-by-case basis. We do give customers at least six weeks notice via letters to regular customers, and notices in the branch. We let local and state federal MPs know about that as well. I'm very sorry that you didn't get appropriate notice there. That is the methodology that we follow. Again, sorry, I think there's a
No, maybe just very quickly to add, Paul, if it's helpful. We do send notification, as you said, to all customers. I think that is limited to customers who've used the branch in the prior six months. Perhaps we could have a conversation after the AGM and make sure that nothing was missed.
Thank you.
Chair, another question here from shareholder Chris Burr. If house prices fall 30% on average across Australia from recent peaks, what impact will that have on CBA?
Yeah. CBA has a very mature risk management framework that looks at all of the financial risks across all of our lending and other exposures, effectively running then scenarios on changes that could be quite dramatic, whether it is the physical impacts of climate change, whether it is house price falls, or whether it is unemployment increases. Those latter two are a significant impact on financial risk. We run that methodology and that process and determine what provisions we should have on the balance sheet to give us a shock absorber or a buffer against scenarios that might have significant adjustment financially for Australians. As a board, we are very comfortable that the scenarios are robust. There are always times where unexpected events occur.
The best way to do that is for us to follow our risk management framework, undertake the methodological work, and then make sure that we have the balance sheet with the right provisions to protect against that. That is the methodology we follow. It has kept us in good stead, but it is an area of focus in our board risk and compliance committee that we spend significant time on and real time with the cost of living crisis even more so. I think financial risk and supporting Australia and having a resilient balance sheet has never been more important than it currently is at the moment.
Chair, this is a question from shareholder Rita Masilevsky. What board level controls ensure that where CBA lends to a small business against the director's guarantee and pre-existing home mortgage, that CBA assesses the business's capacity to repay rather than relying on property equity, compliance with the banking code and guarantor protections, and that CBA retains evidence of that assessment and informed consent, and independently verifies all contractual and statutory requirements before enforcing against the guarantor's home, including for legacy facilities?
I think without referring to individual circumstances, to the extent that we have customers who have economic challenges, we have a whole framework which has matured over time. We were discussing it just in the last couple of days, but we have to make sure that we are there to support customers, to communicate effectively, to communicate early, and then make sure we follow all of the appropriate policies and procedures, either internal or externally imposed. We do our best to deal with that every single day, but again, with the cost of living crisis real time, making sure that we are there to support customers as quickly and clearly as we can, through difficult circumstances is certainly front of mind for us and the team.
Chair, this is a question from shareholder Stephen Mayne. CBA has been News Corp's main Australian bank for decades. The Australian newspaper reported on August 21 that our CEO is in a relationship of sorts with News Corp journalist Laura Jayes. In light of this, what is the board doing to provide oversight on any dealings between CBA management and News Corp, such as the recent nationwide housing affordability campaign in the News Corp newspapers that was sponsored by CBA? How are we managing the optics of this delicate situation, and does the Chair have any comment on the recent media?
Oh, thank you very much. I think the first to say, and I think a number of shareholders have talked about it today, is just how good a job Matt is doing, how committed he is to supporting Australia, the bank, but our customers. From a board perspective and a Chair perspective, Matt's work ethic, focus, and dedication to CBA has never been in question. There is no conflict, and the transparency around conflicts that exist within the board and amongst the management team has been absolutely appropriate. I am just going to leave it there.
Chair, we have a question from shareholder Rita Masilevsky. Who within CBA is responsible for conducting the independent pre-enforcement review before court proceedings or enforcement actions are commenced or continued? Is that review conducted by a person or function independent of collections, recoveries, and the external solicitors or agents conducting the enforcement? Second question is, if CBA has commenced or is continuing court enforcement without first satisfying the contractual, statutory, regulatory, or internal preconditions required for that enforcement, is the board advised, and do they immediately intervene?
Thank you. Again, I won't talk to specifics, but there are very clear processes within the banks and review and assessment steps across all aspects of individual loans and their circumstances, and there are committees of review involved coming at that from equity, legal, regulatory, and internal policies and procedures that have to be followed to go through that process. The board does review that process, in totality, and then management implements that process in specificity. Matt, would you like to add further?
Perhaps joining that question with the earlier question, and again, of course, not commenting on any specific circumstances, and you've touched on many of these points, Paul, but of course, when we lend, we apply all of the relevant credit and risk assessments. I think one of the questions was around records. All relevant records are retained. One of the things that at all times we're looking for is any signs of financial hardship or support. We do have specialist teams that are in place to be able to support customers precisely in some of the financial hardship circumstances. Perhaps just to underscore that enforcement is a last resort.
Chair, this is a question from shareholder Chris Burr. When are you going to improve customer service at CBA? CommBank NetBank is great. CommSec is excellent. CBA customer service, both face-to-face and over the phone, not so good. Staff are often not so friendly and often incompetent. The CBA regional branches are few and far in between, often dilapidated and are depressing and distressing. Why do we have to go into a CBA branch with the ever declining number of branches to confirm our identity when ING, Macquarie Bank, Rabobank, and ubank can do the same thing online or over the phone?
Thank you. I think best way to step that up is to say that we are always focusing on delivering the best customer experience, both in-person, where we have the largest in-person network in Australia, and online. I would have to push back and say that our people are well-trained, capable, and do an incredible job. There are times where individual experiences might not meet the customer's need, and we take that feedback, and there are processes of challenging and escalating.
But our people do undertake substantive training on both an introductory but an ongoing basis. In terms of preparing services with others, we are always making sure that we're investing as heavily as we can as to provide the best customer experience, both holistic and individually. I think I'll leave the answer there. We're going to move back now into the room, and we have a question at microphone number one.
Sorry. Chair, I would like to introduce Michael Sanderson.
Welcome back, Mr. Sanderson.
Wasn't expecting that.
If you've got nothing to ask, happy for you to sit down.
You wish. The destruction by Ukraine of three of six Yandex data centers has caused severe disruption to digital banking, the Russian economy, and AI. Cash held outside banks have increased to 70.5%. Is it in the interests of shareholders for CBA to continue to undermine branches and cash? Or is this a CBA gafilla? Is that a word? Yeah.
I think I talked about operational resilience before, and we've talked about cash supply. We're absolutely committed to making sure that we maintain the branch network that we have in regional areas, make sure we've got the footprint that optimizes customer requirements in the city, and I note that there's always different views on that. We do think that cash will be around for its extended period of time, and we're supporting that process. Data security, data privacy, are fundamentally important parts of our risk matrix, and we spend considerable amounts of investment to ensure that we have a resilient and safe network. I think they're all parts of what we've already talked about today, but that would be the answer that I would provide to your question.
I just find it a bit counterintuitive where you're pushing people into digital, and then you say cash is declining as a consequence. That's a self-reinforcing feedback loop. Taking on board that you think that cash is going to be down to 4% in 2030, that just doesn't wash. The logic is not there.
I'll take that as a comment. Thank you.
On the data centers, Ukraine bombing a data center in Russia is not transferable to our market. We have a looming energy crisis, whereas the lack of energy can take out data centers. For instance, in the major city of Kurri Kurri, we have a brand-new gas-powered service station, power station as a consequence of the Morrison government. Lo and behold, there is a data center going in right next door. There is an old aluminum smelter there, site, which will take 80% of the capacity of that particular brand-new. Renewables has never supplied an economy. I am talking wind and solar here. On the planet, there is no proof that concept works. There we are. I get on a mission. Do you want to comment on that, or you just going to let it fly?
As I mentioned before with our AEMO, you do need gas firming with renewables. That is an important step. I think with data centers, more importantly, there is a national conversation underway as to how to support the power and water that go to data centers. I think that is a really important conversation. I think you highlight a very specific local instance in Kurri Kurri. I think nationally, making sure that we have got the right balance and supply to support industry broadly and consumers specifically is an important part of national energy policy.
My second one, this relates to debt. I just want to break it into two because I have got two responses based on your yes or no answer. Does CBA consider that the debt level in Australia is a macroeconomic issue? That is a yes or no one.
Yeah. Look, we come back to how do we make sure that we support Australians in the services that are necessary, and that the services that they demand, both nationally and locally. How do we make sure that we have the right tax policy, the right productivity, so that we can actually get inflation into the right spot to support Australians? Then how do we, as a bank, when we look at the economy, make sure we have got the right balance sheet and products and services to support Australians?
That is the way that we look at the totality rather than the specific number that might sit within a national government debt target. So I think as I have mentioned, productivity is really important. It is hard. We need to continue to try and focus on improving productivity nationally and locally. And then we've got to do our job at the bank, and we're endeavoring to do that to the best of our ability.
That was the longest intro. You talk about me going on. We hear a lot about the sky's falling, the sky's falling, the government has a AUD 1 trillion debt, but we never hear about private debt. Private debt is around AUD 4.87 trillion. It's 168% of GDP. If you listen to the likes of Dr. Steve Keen, that states that private debt was central to the Great Depression and the GFC. Should shareholders be concerned about the level of private debt? This is not CBA's private, your part of it.
Yeah.
Substantial part.
I think I'll refer back to the answer to my first question, which is from a CBA perspective, an individual perspective, a corporate perspective, we've all got to make sure we understand how to balance our cash flows going forward, how to manage the growth of an economy, where to lend to support that economy, where we are in the cycle to maintain our economic settings. I think it's a really broad question or comment that you're making. I think we look at the totality of the Australian environment.
We look to how CBA sits within that, and we try and support our customers, large and small, to manage their own personal or private situations, but also for us to support the policies that might help support Australia grow economically and bring down the cost of living. There are so many aspects of what the bank has to do and how we lean into that I will kind of provide that broad answer and I think leave it there if that is okay.
The bank does not have any underlying concerns about the AUD 4.87 trillion of debt?
I think we look at the total economy and our settings with that economy, and we are doing our best to support the economy. I think that is the best way to answer that.
No concerns?
I think that's the best way that I'll answer that question. Thank you.
Thank you.
We're going to do a couple more questions in the room, then we'll move to the next item of business, but there will be further opportunity to continue to ask questions. If we go to microphone number four.
Chair, I would like to introduce Mr. Thomas Wells.
Welcome, Thomas.
Thank you, Mr. Chair. My name is Thomas. I work in the financial crime section of the bank, specifically law enforcement agency. First, I just want to say, indeed, you are right, it is an area of the bank that is growing very quickly due to the risks that are present in society today that we need to manage. More to my question, I have two questions from my section. First, about AI. CBA has been actively working to integrate AI into the workflow of its employees, improve productivity and the such. However, some employees like myself, our roles are quite critical for CBA to meet its regulatory obligations, particularly in regard to Anti-Money Laundering and Counter-Terrorism Financing Act. Furthermore, as we saw recently in the news, I think someone else alluded to it earlier, the Medicare incident between that and AI.
There is growing concern among regulators in terms of what information AI can access and also what it may be able to do with that information. My question is, what regulatory risk does AI propose to CBA? Is this something that employees such as myself should be concerned of in terms of how it might impact myself and my role, particularly in terms of accountability if an incident takes place?
Thank you again, Thomas. Just to reiterate, really appreciate the questions from employees today. I think they are really pertinent, and they hopefully give shareholders a perspective on the breadth of things that we all collectively have to address and to make sure that we have got the right strategic focus on risks, the right internal policies and procedures, we have got the right and we are investing in our employee capability, and there is just a plethora of areas and risks that we need to focus. I am going to get Matt Comyn to specifically comment on your individual components of your question.
Yeah, look, given the nature and the number of questions in this area, maybe I'll just spend a couple of minutes on it. Look, I think rightfully, the volume of questions to me signifies, I think, the importance of this topic, both more broadly to Australia and to the CBA. Maybe I'll touch a little bit on briefly how we're managing that, including in important areas. Just very quickly, this technology is quite transformational. It has a number of risks, both risks in terms of that need to be managed in the day-to-day, but also strategic risk. One of the unique aspects of this general purpose technology and a general purpose technology like electricity, will have implications on the broader economy. It's also dual use.
One of the reasons why it's very good at helping in engineering and software development, it also means it's very good at cyber. We have to I think there are risks in using the technology. There are clearly risks in not using the technology. In areas, as you said, in cyber and in financial crime, we've expanded our resources, our regulatory compliance, but most importantly, the outcomes of protecting our customers and the community are always at the forefront of our mind. There are a variety of different protections that need to be in place about how we're using the technology. As I said earlier, we retain accountability and responsibility for the use of it. It will be a source of change across the broader economy.
It's one of the things that we are very focused on, is both how we can be implementing it responsibly, safely, distributing those benefits more broadly so that our customers are receiving a better experience. We're also protecting our customers, as Paul's touched on. I do think there will be opportunities for productivity. There will be changes to people's roles over time.
I don't know about the exact pace of those changes, but I think it's really important for us to be able to talk openly about how we're thinking about it, trying to prepare both our people via our workforce capability investments, the broader economy, so that we are as well prepared as possible as a company, but also as a nation. I think this is going to be one of the most important priorities over the next few years, and we'll continue to engage both internally, and also externally on this topic.
Thank you. In terms of my second question, hopefully this one's a little shorter, but it came to me while I was listening. Part of my role involves getting orders from courts, with instructions on how we should manage accounts of our customers. Obviously, we treat these with the utmost importance due to the seriousness of these kind of court orders and the instructions that they give to us, the bank. I noticed that in my time working in financial crime, they rely almost entirely on branches to function.
To me, it's a concern of mine that if we're required by the judicial system to make our customers go to a branch in order to comply with orders involved by court, how is branch closures going to affect that? Is CBA in a position to perhaps apply pressure to regulators and the such to maybe try to develop a better way to serve our customers rather than making them drive to a branch to uphold a court order?
Thomas, I'm going to ask if you'd bear with us and if it's possible to take that offline and talk to one of the leaders who are here, they'd be very happy to get your input to that. I note that we have to comply with court orders, but you're suggesting a concern about the process that might be followed. I think getting into the detail of that as to what our processes are and considerations that you might be bringing to that. So if you're amenable to that, we'll get someone to just get your input afterwards, if that is okay with you. If you don't want to do that's also absolutely fine.
No, I appreciate that. Thank you.
Thank you very much, Thomas. We'll go to microphone number one.
Chair, I would like to introduce Bruce Bennett.
Welcome, Mr. Bennett.
Thank you, Paul, and I appreciate how you've been conducting the meeting. It's been very useful. I noticed that last night, Wells Fargo, JP Morgan, and Citi had some really good results last night, and I'm sure you're aware of those. Of course, Bank of America had a bit of a handicap with its fine. What I'm asking is, you mentioned earlier in your comments that the bank has many opportunities to grow its business in Australia and New Zealand. I'm wondering whether the board has any plans to expand the board's investment banking operations so as to improve returns for shareholders.
That's the first question. Second question relates to branch closures. I'm wondering whether when you consolidate banking, you could think about opening some branches on Saturdays to avoid that sort of congestion that takes place when you combine the branches down. But the main one is in relation to the bank's opportunities in investment banking. Thank you.
Mr. Bennett, on the second one, I've just noticed that the Head of the Retail Bank's taking a note on that one. So that comment is acknowledged. In relation to investment banking, we have an Institutional Bank that is supporting large customers and particularly supports them with market risk, whether it's hedging or commodities risk, which is commodities. We support customers who are using investment banks in transactions by providing them with financial services. In stepping out to be an investment bank in the way that others might think about that, I don't think that that's part of the core activity that we would be interested in, beyond that, the services that we currently provide, which we're very comfortable providing. I know there will be more questions, but we're going to move on to the next order of business.
Item two relates to the re-election of Simon Moutter and Rob Whitfield AM and the election of Julie Coates. The resolutions will be dealt with separately. The Board's recommendations in relation to Item two were approved prior to the appointment of Julie Coates on the 1st of September 2026. As it was the Board's confirmation that all Directors standing for election or re-election are independent. Each Director standing for election or re-election will briefly address the meeting regarding their candidacy. Item 2A is for the re-election of Simon Moutter, who retires in accordance with the company's constitution and being eligible, offers himself for re-election. The Board, with Simon abstaining, recommends the re-election of Simon Moutter as a Director. I now invite Simon to address the meeting.
Thank you, Chair, and good morning, shareholders. I am pleased to stand for re-election to the CBA board. I joined in September 2020, and I currently Chair the People and Remuneration Committee, and I am a member of the Risk and Compliance Committee. My executive background is in leading large and complex organizations through significant periods of change. I spent seven years as the Managing Director of Spark New Zealand, and before that I was the CEO of Auckland International Airport, and that followed on from roles in the telecommunications and energy sectors. I continue to hold leadership and governance roles in New Zealand, including as Chair of Kāinga Ora, the country's public housing agency. These roles give me a direct perspective on the New Zealand economy and business environment, which is an important market for the CBA Group.
Throughout my executive career, I have helped organizations I have worked with drive change through smart business strategies, technology adoption, digital transformation, and implementing modern ways of working. Over my time with CBA, technology investment and business transformation have been a significant focus of the board. As the group continues to invest in technology and considers opportunities and risks represented by AI, I believe my experience enables me to continue to make a useful contribution. As Chair of the People and Rem Committee, I guide the committee's work on executive succession and talent, workforce development, and the group's remuneration framework.
I also enjoy contributing to our work on the leadership, capability, and culture needed to deliver sustainable outcomes for customers and shareholders. I remain independent, and I have the capacity and commitment to continue to serve effectively as a Director. It has been a privilege to serve on the board, and I would welcome the opportunity to continue to contribute. I would appreciate your support in my re-election. Thank you.
Thank you very much, Simon. I now invite shareholders and proxy holders in the room who wish to ask questions or make comments on this item to move to a microphone. I also invite shareholders and proxy holders to submit questions online. Are there any questions? I do not think we have any questions at the moment, so I might move on. I now put the resolution to the meeting. Please mark your voting card in relation to item 2A, Simon Moutter's re-election. I will now move to item 2B. Item 2B is for the re-election of Rob Whitfield AM, who retires in accordance with the company's constitution and being eligible offers himself for re-election.
As Rob has served for more than nine years, he is standing for a further one-year term only. The board is satisfied that his skills and experience, including as Chair of the Risk and Compliance Committee, continue to support his re-election and that he remains independent. The board, with Rob abstaining, recommends the re-election of Rob Whitfield AM as a director. I now invite Rob to address the meeting.
Thank you, Chair. Ladies and gentlemen, my appointment as a non-executive director to the CBA board was announced back on 4 September 2017, and I was elected by you, our shareholders, at the 2017, 2020, and 2023 AGMs. I am seeking your support for my re-election as a director to the Commonwealth Bank board for just a further 12-month term. It has indeed been a privilege to serve on the board. I remain deeply committed to the bank, its customers, its people, and to creating sustainable long-term value for you, our shareholders. Over the past year, I have also had the opportunity to chair the independent panel conducting the ASIC Commissioned Inquiry into the governance, capability, and risk management of the Australian Securities Exchange, the ASX.
That experience has given me a unique and very current perspective on the governance and regulatory environment facing major Australian institutions operating critical infrastructure. Not simply from the perspective of being regulated, but from the perspective of understanding the issues regulators are examining, the expectations they are placing on boards and management, and what effective governance looks like when placed under significant scrutiny. Those lessons are directly relevant to the CBA as it navigates increasing regulatory expectations alongside rapid changes in technology, AI, cyber risk, financial crime, and customer expectations.
My experience across banking, financial markets, risk, and governance, combined with those learnings gained from chairing the ASX inquiry, enable me to bring a particularly informed view to these challenges. I thank shareholders for the confidence you have placed in me to date, and I look forward to continuing to serve you as a director of CBA, should you decide to support my re-election today. Thank you.
Thank you, Rob. I now invite shareholders and proxyholders in the room who wish to ask questions or make comments on this item to move to a microphone. I also invite shareholders and proxyholders to submit questions online. Are there any questions? I do not think there are any questions online or at the micro. Oh, sorry, I have a question. Microphone number one.
Yes. Chair, I would like to introduce Allan Goldin.
Welcome back, Allan.
G'day. Look, we find it a bit strange. We understand the constitution, the reason it is only a one year. We will support it this time. We think that Mr. Whitfield is very good, but we do find it strange. What my question has to do with more is, can we see what the votes are before we are asked to vote? Can they also be left up long enough for us to actually see them? Because the last election, the vote came up and it was like a second and a half. Can we actually see them?
Sorry, I can't see them.
You can't see them.
Can we put up the last vote, if that's possible, for Simon?
Oh, great. Thank you.
You put up your hand, Allan, when you reckon it's been up there long enough.
Long enough.
Thank you. In terms of the methodology, we're doing it after the vote, but we're going to take that on notice and reflect for next year, if that's okay. We'll definitely keep them up there longer. I think Simon's been reelected. Congratulations, Simon. If there are no further questions, I'll now put the resolution to the meeting. Details of the direct and proxy votes received prior to the meeting in relation to this resolution are displayed on the screen. The vote is up there. You can now mark your voting card in relation to this item, which is Rob Whitfield's re-election. As we can see at the moment, 98% of the vote is cast for the resolution, subject to those in the room who are adding their vote today. So congratulations, Rob. Just to comment on the one-year term.
Under the constitution and policies of the bank, directors are elected by you, our shareholders, for a maximum of three year terms. But after that, it is possible for electors to vote for a further year, up to three times, for a director to be extended. Thank you very much. We thought that having Rob on board for another year was the right thing for the bank and for you, our shareholders, and that's why we put the recommendation to the meeting. I'll now move to item 2C. Item 2C is the election of Julie Coates, who was appointed as a Director of the company since the 2025 AGM, and being eligible, offers herself for election. The board recommends the election of Julie Coates as a Director. I now invite Julie to address the meeting.
Thank you, Chair, and good morning, shareholders. I am very pleased to have joined the CBA board as a non-executive director and to put myself forward for election by shareholders today. I was attracted to the opportunity to join CBA because few organizations have the same connection with Australians and Australian businesses or play the same role in supporting the Australian economy. Having spent most of my career in large customer-facing businesses, I was particularly drawn to CBA's ambition to improve the everyday experience of millions of customers.
For more than 30 years, my career has spanned the retail, consumer goods, construction, manufacturing, and building products sectors. Most recently, I was the managing director and Chief Executive Officer of CSR Limited. Earlier, I held senior roles at Goodman Fielder and Woolworths, including as managing director of Big W and as the chief logistics officer and the human resources director of Woolworths.
Alongside my executive career, I have served on a number of listed boards, and today I am a non-executive director of Wesfarmers and Scentre Group. Much of my career has been spent close to the operational realities of large organizations. It has given me a strong grounding in bringing strategy to life through disciplined execution, delivering for customers, and understanding what it takes for large organizations to perform consistently at scale. I look forward to bringing that perspective to the board's work. I am independent and have the capacity to give the role the time and focus it requires. I respectfully seek your support for my election and look forward to contributing to CBA as a member of the board. Thank you.
Thank you, Julie. I now invite shareholders and proxyholders in the room who wish to ask questions or make comments on this item to move to a microphone. I also invite shareholders and proxyholders to submit questions online. Are there any questions? If there are no further questions or no questions, I now put the resolution to the meeting. Details of the direct and proxy votes received prior to the meeting in relation to this resolution are displayed on the screen. Please mark your voting card in relation to Item C, to see Julie Coates' election. And congratulations, Julie, and welcome. The next item on the agenda is Item three, the resolution to adopt the remuneration report of the company for the financial year end of 30 June 2026. In accordance with the Corporations Act, the vote on this resolution is advisory only.
The remuneration report is included in the company's 2026 annual report, which is available on our website, and some hard copies are available here today. The bank and the executive leadership team have delivered consistent, sustainable performance in the financial year. The remuneration outcomes approved by the board reflect how it has exercised its judgment in assessing executive performance in the context of the operating environment and with regard to shareholder, customer, people, and risk outcomes. Our remuneration policy settings and frameworks have supported the execution of our strategy. This has delivered sustainable shareholder outcomes, improved experiences for our customers, maintaining a strong focus on our risk culture, and supported the skills, careers, and engagement of our people.
As outlined in the report, our executive remuneration framework is made up of four components: fixed remuneration, short-term variable remuneration or STVR, long-term alignment remuneration or LTAR, and long-term variable remuneration or LTVR. Together, these elements are designed to provide market-competitive remuneration, rewarding sustainable financial and non-financial performance, and shareholder value creation over the long term.
Executive scorecards are approved annually by the board and include weightings, measures, and targets that are calibrated to reflect strategic priorities, market practice, and regulatory requirements. Performance is assessed against clearly defined targets, with recognition given to contribution that extends beyond core role requirements. In determining outcomes relative to target, the board adopts a holistic approach, considering both the degree of stretch and the impact achieved. As you've heard in my opening remarks and Matt Comyn's address, the performance of the bank has been strong overall across the balance of financial and non-financial performance areas.
The board considered a number of matters relating to risk and reputation in the 2026 financial year, which for the executive leadership team resulted in three downward adjustments to remuneration outcomes. The people and remuneration committee will continue to monitor and refine the bank's remuneration frameworks so that it attracts and retains high-caliber talent, meets applicable regulatory requirements, and supports the delivery of sustainable customer, community, shareholder, and risk outcomes. I now invite shareholders and proxy holders in the room who wish to ask questions or make comments on this item to move to a microphone. I also invite shareholders and proxy holders to submit questions online. Are there any questions? I'm just going to go back for a moment to a question online in relation to Julie Coates that was missed. If we could pass to that, if that's No? It might come back.
Sorry, we don't have a question from Julie Coates, but we do have one on this item, if there are no-
We'll stay online for a moment, and then we'll come back to the room. Thank you.
Chair, just before I ask this question, if I could ask those in the room to just make sure you have turned off your mobile phone or put it on silent as there are a number of phones going off and it is distracting. Thank you. We have a question from shareholder Steven Main. Did any of the five proxy advisors, ACSI, Ownership Matters, Glass Lewis, ISS, and ASA, recommend a vote against the board's recommendations on any of today's resolutions, including this remuneration report item? If so, what reasons did they give, and did this translate into any material protest votes? Whilst the actual reports from most of these groups, excluding ASA, are confidential, the recommendations are not, and it is the standard for companies to be across this detail on the voting recommendations and inform shareholders when asked.
Thank you very much for the question. I think the question has been asked before. Proxy holder information, we do not disclose the results or recommendations. They are provided by the proxy holders as I understand it. We disclose the votes as they appear in the AGM today, and that information is available for everyone, both here and online once the polls are closed. We always take on board feedback as to how we run the meeting and our communication, and we do everything we can to be as transparent as possible. Thank you.
No further questions online at this stage.
Thank you. We will come to the room if there are any questions in the room. If there are no further questions on the remuneration report, I now put the resolution to the meeting and note that the board recommends that shareholders vote in favor of Item Three. On the screens are the details of the direct and proxy votes received prior to the meeting in relation to this resolution. Please mark your voting card in relation to Item Three, adoption of the 2026 remuneration report. I think we can all see those votes on the screen. I will now move to Item Four. Item Four is a resolution for the grant of securities to the CEO, Matt Comyn.
The company is proposing to grant the following securities to Matt under the company's employee equity plan, 12,192 restricted share units as his FY 2027 long-term alignment remuneration and 12,192 performance rights as his FY 2027 long-term variable remuneration. Together, these elements of the CEO's remuneration support a focus on sustainable shareholder value creation. The LTAR is designed to align executive interests with those of shareholders and derive collective focus on the value of CBA over time. The CEO's LTAR awards are subject to both a pre-grant assessment by the board, and the board approved the full grant of restricted share units. The pre-grant assessment considers individual non-financial people and leadership and strategy execution outcomes and future financial factors, including a long-term approach to capital and balance sheet settings.
As a result, if shareholders approve this item today, Matt will be granted 12,192 restricted share units granted in two tranches, with 50% restricted for four years for 30 June 2030 and 50% restricted for five years for 30 June 2031. Matt will only receive value from this grant after the restriction period and subject to the outcome of a pre-vest assessment. The LTVR performance rights will be subject to performance measures over the period 1 July 2026 to 30 June 2030. These measures are described in detail in the notice of meeting, but in summary, 50% of the award is subject to a relative total shareholder return measured compared to a peer group of the 20 largest companies by market capitalization on the ASX at the 1st of July 2026, excluding CBA and resource companies.
The other 50% of the award is subject to a relative total shareholder return measure compared to a financial services peer group. Following the end of the four-year performance period, the performance measures will be tested and the number of performance rights that vest will be determined. Vested performance rights will be automatically exercised to shares subject to dealing restrictions for a further holding period of two years to 30 June 2032. Vesting of the restricted share units and performance rights following the end of the restriction and performance periods respectively, and any shares subject to the holding period will be subject to malus consideration. Malus considers whether there have been any serious or material matters and may lead to the board reducing the awards, including to nil, prior to vesting. If they vest, the awards are also subject to clawback.
This is designed so that the outcomes appropriately consider risk, accountabilities, and reputation outcomes. Restricted share units and performance rights do not carry any voting rights. To align these awards with shareholder experience, Matt will receive dividend equivalent payments in respect of the restricted share units but only following vesting. These dividend equivalent payments will include the value of any franking credits. Any shares allocated to Matt on vesting of the restricted share units and performance rights will carry the same rights as ordinary shares, including with respect to voting and dividends. Full details are outlined in the notice of meeting. I now invite shareholders and proxy holders in the room who wish to ask questions or comments on this item to move to a microphone. I also invite shareholders and proxy holders to submit questions online. I apologize, that was a mouthful. We'll go to a question online.
Chair, this is a question from shareholder Steven Main. At the 2023 AGM, I asked CEO Matt Comyn to summarize his past LTI grants as to whether they have vested or lapsed. The Chair monopolized the response, so let's try again with the CEO speaking for himself. Could Matt please summarize his share ownership history at CBA, including LTI vesting and on-market trades? Please don't say, "Look it up in the annual report and through ASX announcements." It's complicated, and our extremely numerate CEO could factually summarize the situation in 60 seconds, including recent sales.
Thank you, Mr. Main. I will note that I'm the Chair of the meeting, so I'll decide who answers the question. You'll notice during the meeting, I have got a lot of support for Matt. Remuneration is actually a board responsibility, and it's more important, I think, that the Chair talks to the remuneration than the individual concerned. Specifically to answer your question, Matt was appointed CEO in April of 2018, and his LTVR grants, 97% of those are vested and 3% forfeited.
While he was granted a GE or vested while he was the CEO, 55% have vested and 45% have forfeited, with the total vesting of CEO, basically 79% vested and 21% forfeited. He's also acquired shares through performance being met through variable REM, and there is more information in the remuneration report. In summary, a large proportion have vested, but there is a proportion that has not so vested. We will come into the room, and we have a question at microphone number four.
Chair, I would like to introduce Mr. Paul Hatfield.
Welcome, Mr. Hatfield.
Thank you. My question is in regards with the 12,192 shares. Are the shares actually purchased on the open market, or does it result in an increase in issued capital for the bank?
I believe those shares result in an increase in issued capital for the bank, but I just need to check. Oh, sorry. They are rights. Yeah. Good clarification. So they are share rights. So as share rights, they are amortized over the life of the term of the vesting period, so of the restriction period of four years. I believe they go through the P&L, and we will clarify this afterwards. But once they actually vest, the share actually becomes an issued component of share capital.
Yeah, they are basically, I think, synthetic rights that obviously track and then are understanding of if they are vested in the.
Yes.
Solution.
Yeah. They are issued at vesting. So there is an expense incurred over time, and then they actually are issued as shares as an increase in capital, if they actually are awarded and meet the performance hurdles. Apologies for the confusion.
Okay. Thank you.
Microphone number one.
Chair, I would like to introduce Mr. Peter Starr.
Welcome back, Mr. Starr.
Yes. Thank you, Paul. Sorry I had to duck out. I had to just duck up to another AGM. They were requiring me, but I got back.
We kept going just so you could make it.
I heard that you referenced me in one of your remarks, so thank you. In relation to the shareholders I represent in Matt, we would just like to say that the board as a whole in what they are proposing for Matt, we are fully supportive of that. There is no doubt that under your leadership, Matt, and I was one of your biggest skeptics during the Royal Commission, and we have since resolved those things. Let me tell you, and for you, too, Paul, your leadership after you took over from Ms. Livingstone, who I caught up with just recently. Certainly, what is proposed there I think is very fair and reasonable.
I think that we are fully supportive of it, the shareholders I represent. We have no issue with that. We would just like to say that to the board, we see it vital for Matt continuing. I know there was a little bit of speculation, but I don't want any speculation here. We firmly believe while he's there running the bank as the CEO, the bank's in a very good position, and likewise, yourself and the board. We fully support that. Thank you.
Thank you very much, Mr. Peter Starr. We appreciate those comments. We know that you have challenged us over the years, quite appropriately so, and we appreciate that challenge. Thank you. If there are no further questions, I now put the resolution to the meeting and note that the board recommends that shareholders vote in favor of item four. Details of the direct and proxy votes received prior to the meeting in relation to this resolution are displayed on the screen. Please mark your voting card in relation to item four, the grant of securities to CEO Matt Comyn, and I will just clarify, when those shares vest, they are actually purchased on market. They're not issued capital. I apologize I didn't get that right straight off the cuff. Thank you. I'll now move to item five, which comprises two resolutions requisitioned by a group of shareholders.
The resolutions are proposed under Section 249N of the Corporations Act and are set out in the notice of meetings as items 5A and 5B. Item 5A seeks an amendment to the company's constitution. It requires a special resolution to be passed. That is, it must be passed by at least 75% of the votes cast by shareholders entitled to vote on the resolution. Item 5B is a contingent advisory resolution that will be only put to the meeting if resolution 5A is passed by shareholders. Consistent with the company's approach to welcoming shareholders' feedback, a reasonable opportunity will be provided at the AGM today for questions from shareholders on items 5A and 5B, even if item 5B is not ultimately put to the AGM. The board respects the rights of shareholders to seek to amend the company's constitution.
The board does not, however, consider that the change to the constitution proposed by item 5A to allow shareholders in general meeting by ordinary resolution to express an opinion, ask for information, or make a request to be in the shareholders' best interest. The board recommends that shareholders vote against it. The board is responsible for making decisions that are in the company's best interest. The proposed amendment would provide a platform for a group of shareholders to promote any number of matters that may not be in the best interest of the company and shareholders as a whole. The board considers that it would be inappropriate for any one issue promoted by shareholders to be given increased prominence over another. This could impact the board's ability to make decisions effectively and in the best interest of the company. As I've mentioned, item 5B is an advisory resolution.
It requests that CBA disclose a pathway to deforestation-free finance. My opening remarks addressed the topic of nature more broadly and this advisory resolution specifically. The board considers that the company's current approach is appropriate, having regard to the evidence presently available as it preserves the company's ability to determine whether and how its response should change as evidence and circumstances develop. As outlined in the notice of meeting, the board recommends the shareholders vote against both items 5A and 5B. I would now like to give Joelene George from the Australian Conservation Foundation, which supported the resolutions on behalf of groups of shareholders, an opportunity to address the meeting and thank Joelene and the ACF for the engagement that they've had with myself and Matt and the team. It has been very professional and much appreciated. Thank you, Joelene.
Good afternoon to the shareholders here, of course, Mr. Comyn, Mr. O'Malley, and members of the board. We finally got here to item five, so well done to all of us for hanging on. Thank you for the opportunity to speak. I am here on behalf of almost 200 shareholders who have co-filed the proposals before you today. The proposal speaks to the bank's intent to address deforestation in Australia, by which I mean the clearing of natural forest, often critical habitat for threatened species like koalas, greater gliders, and many species that exist nowhere else on this planet outside of Australia. On the topic of nature and biodiversity, I believe that there are many points that we are actually in furious agreement on.
For example, we know that nature underpins our economy, and research shows that more than half of GDP or nearly half of GDP is directly dependent on nature. We also agree on the importance of Australian agriculture to our economy, to our food security, and to regional communities. I am sure all of the board will agree that farmers are among some of the best custodians of our land in Australia. Yet, new research by the Australian Conservation Foundation has linked CBA's financing to properties where significant deforestation is occurring, affecting thousands of hectares of land. Your recent disclosure reinforced this, suggesting that up to 0.5% of total committed exposure, or by our calculations, around 32% of your lending to agricultural customers may be linked to significant deforestation. That is a material finding. Nearly one in every 3 AUD lent to agricultural customers potentially linked to deforestation.
Further, despite the bank enhancing your analytical capabilities, CBA still cannot tell shareholders whether the deforestation it has identified involves the destruction of threatened species habitat, whether it is potentially unlawful, or if it is contributing to the erosion and sediment runoff that is damaging the Great Barrier Reef and therefore the economies that depend on that natural treasure. These are not peripheral questions. They go directly to the environmental, regulatory, reputational, and financial risks that the bank needs to understand and manage. While we very much welcome the analysis and appreciate the work of your staff in taking this important step, this is not where the work ends, but only where it begins. In your annual report, you acknowledged the increasing pressure faced by farmers through extreme weather, changing climate patterns, and pressures on water and soil. All things, impacts known to be made worse through deforestation.
These pressures threaten agricultural customers' income and assets as well as the bank's loan collateral, and the credit risks arising from this require a clear response. In fact, the impacts from deforestation are almost certainly negative for all of your customers, the vast majority of your customers, perhaps with the exception of those few customers doing the damage in order to increase short-term profits. This brings us back to the role of the bank and of CBA in addressing these impacts in the broader interest of the economy, the agricultural sector, your shareholders, and to the fairness of the majority of your customers who are doing the right thing. Some of your peers have done similar analysis and concluded that they do have a role to play as lenders in addressing deforestation through the means available to them. We understand, unfortunately, that this conclusion is not shared by CBA.
This is why shareholders today are asking CBA to disclose a pathway to deforestation-free finance over time. It does not prescribe the methods the bank must adopt or ask for a commitment to deforestation-free to be implemented tomorrow. It does ask for a shift in the direction of travel, a credible pathway, and transparency about progress. A clear strategy from the bank can not only protect shareholder value but protect its customers and the wider agricultural industry from the actions of a small minority that is tarnishing the reputation of the wider sector. Regardless of the outcome of today's vote, on behalf of shareholders, I urge the board not to look away from this issue and to critically challenge what may be sold to you as a good news story, that the steps taken so far have been sufficient.
We urge you to dig deeper into this analysis to understand the underlying risk and what the data shows, as well as what's hiding and what's not yet known, and to rigorously debate and consider the appropriate role that the bank has on this issue. Identifying the risk is an important first step. The next step is to demonstrate how the bank will meaningfully address it. I ask shareholders to support the resolutions before you today. Thank you.
Thank you very much, Jolene, and thank you for your patience. It sometimes takes a while to get to item five. While we respectfully oppose the resolutions proposed, we share your focus on this important issue and appreciate your engagement. I now invite shareholders and proxy holders in the room who wish to ask questions or make comments on items 5A or 5B to move to a microphone. The vote on these items is conducted separately, and item 5B is a contingent resolution that will only be put to the meeting if item 5A is passed by shareholders. I'll now move to questions. I think we have a question at microphone number four.
Chair, I would like to introduce Mr. Martin Mansfield.
Welcome, Mr. Mansfield.
Thank you. Good afternoon, everyone. I am a Commonwealth Bank shareholder, as are my brother, my wife, her brother and sister, and my daughter. There's a lot of us in the family who are CBA shareholders. We are all very aware of risk. As Jolene has just mentioned, ACF, Australian Conservation Foundation research shows that just under half of Australia's GDP is directly dependent on nature. We also know that nature in Australia is under severe stress. 2,119 species of animals and plants are under threat of extinction. I'm a keen bird watcher, and one in six Australian bird species are at risk of extinction. So are 113 different ecological communities. Just this morning, we're learning about the mass starvation of flying foxes in New South Wales and Victoria. They are vital pollinators, including of agricultural products.
Some entire ecosystems are at risk of collapse. The Murray-Darling system is a good example, as evidenced by mass fish killings and widespread salination. It's really very simple. We cannot continue the way we are. If we do, nature will collapse, and therefore, so will our economy. This will have a devastating effect on all Australians and all companies, including, of course, the Commonwealth Bank and us as shareholders. The two leading causes of environmental stress and collapse in Australia are climate change and deforestation. In order to protect itself and its shareholders, the bank must do a lot more to reduce and indeed eliminate its financing of deforestation. The bank's strategic response, as outlined in the sustainability report, is woefully inadequate. It talks about enhancing its understanding of nature-related risks, considering relevant lending risks through established processes, and supporting customers by helping build awareness.
But these will lead to little, if any, reduction in the bank's financing of deforestation. By contrast, the strategy contained in Resolution 5B would be a very good way to start reducing that financing of deforestation. My question is this: In light of what I have just outlined, why aren't you and the board doing more to reduce, and if possible, as soon as possible, eliminate the Commonwealth Bank's financing of deforestation in order to reduce the stress on nature and therefore stress on the Australian economy, thereby significantly reducing risks to the bank and to us as shareholders?
Thank you very much for your question and comments, Mr. Mansfield, and for the time to prepare and present those. There is a lot in that. I have said a fair bit already on our focus, and you have actually quoted faithfully our annual report. I think we are continuing to understand, and that means both engagement and awareness. Engagement and awareness with yourselves, with the ACF, with Jolene and the team. But also with farmers and with regulators, with parliamentarians, with the community. Not all deforestation is the same, and that is something that I think is absolutely acknowledged by ACF and ourselves. As it specifically goes to farming in Australia, just a bit of background. The Environment Protection Act or, so the EPBC I will just get it right.
The Environment Protection and Biodiversity Conservation Act of 1999 was amended such that on the 1st of December of 2025, there were changes in federal law to bring more of the supervision, regulation, and statutory enforcement over deforestation into federal legislation and effectively, by the Environmental Protection Agency. The board's view is that having a National Environmental Protection Agency with absolute supervision in this area, either identifying issues of illegal or clearing activity that doesn't meet their requirements, is actually an important thing for us to acknowledge and understand. Our bankers, who we are educating on this process, are engaging with our customers, and I think education and engagement are really important. But I think an area of difference perhaps is that the EPA, we believe it is their role to make a decision as to where deforestation has occurred.
The EPA itself says that there is no such thing as a blanket approach. One of the challenges with the proposed resolution, if it does bring a blanket approach, it uses terms of no banking of deforestation. The EPA itself says that there is a dramatic range in what may or may not occur, what might or might not be appropriate, and what their responses might be depending on the nature of deforestation or land clearing, approved or otherwise. And so we are very focused on reading the EPA's guidance, understanding that guidance. But the journey continues, and I think our engagement with yourselves, we will learn from that.
But we also engage with farmers to get their perspectives, and there is state legislation, and now there is a broader and clearer federal legislation with an environmental authority whose job it is to make sure that the legislation is adhered to. Our role as a bank is to support our community, support the farmers, focus on our sustainability area, but also to better understand this important topic. It may be that we say more in our annual reports going forward, but that's part of the education and learning process, and we take the engagement and feedback very seriously.
Thank you. Could I just ask the board then to, as soon as possible, move beyond just understanding and awareness to really assessing where financing of deforestation is happening and trying to eliminate that and make sure it doesn't happen again? I think you're making good steps, but I encourage you to take further, I guess more stringent steps, as soon as possible.
Thank you.
Thank you.
We'll take that feedback.
Thank you.
If we move to microphone number three.
Chair, I would like to introduce Bonnie Graham from the Australian Ethical Investment.
Welcome, Bonnie. Thank you for coming.
Good afternoon, Chair and members of the board. Australian Ethical is an institutional investor in CBA, and we are also a co-filer on this resolution. CBA has committed to the goals of the Paris Agreement. It supports Australia's national emissions reduction targets, and it recognizes the importance of Australia protecting and restoring nature and biodiversity, as you mentioned in your address this morning. We know that halting commodity-driven deforestation is integral to achieving those goals. CBA's own analysis identified that around a third of its Australian agricultural portfolio is potentially linked to deforestation. Yet, in its notice of meeting, CBA suggests that from a credit risk management perspective, its current approach is appropriate.
My question is, does the board accept that CBA should be concerned not only with the risks of deforestation that the financing presents to the bank itself, but also where the CBA's financing contributes to deforestation in ways that undermine Australia's ability to achieve its climate and nature goals?
We've been working on a very comprehensive approach to sustainability since before 2020, but our sustainability report over the past five years has demonstrated a principled and policy-driven approach that's very considered that, if I use as an example, the reduction of CO2 emissions by our financed industrial customers has reduced from 24% of our financed emissions to 4% over the past five years. So a very considered, thoughtful approach that we took time to engage with our customers and to understand the issues and to work with our customers to reduce those issues.
As we look at the way we're focused on nature broadly and deforestation or land clearing specifically, we are going to continue to engage with yourselves, with farmers and farming groups, and with the national authorities and understand statute and actually work through methodically what steps, if any, that we need to take. One thing we've learnt as we've gone through sustainability is making commitments before we have the right policy, procedure, education, and engagement is not the right way to go. Taking seriously the issues that you collectively raised today is absolutely important, and then being very considered on how we learn from that and determine how we might amend policies in the future is the process we followed. I think it's served us well. I think it's served Australia well.
The EPA itself says that one has to take a proportionate and considered approach, considering a range of factors, and we're doing the same things. It may not be as much or as direct as you're asking for today, but in our view, taking time to get the policies and procedures and any potential amendments to that right is the right way to go, which is why we oppose the resolution today.
Thank you. I very much respect that the bank reserves the right to obviously adjust its approach, as you look at more evidence as it comes available. Is it fair to, I guess, suggest that the board then does accept that there is a risk, beyond just that risk to the bank, that the board should be concerned about regarding CommBank's broader commitments to climate and nature?
I think we take the totality about our risks, whether it's credit, our customer engagement processes and the protocols that we have to follow when we're talking to customers and potentially adjusting or not adjusting their loans. There's a whole series of protocols that have to be followed there. In relation to nature more broadly, I think there's a range of factors that we need to consider, and we are considering. I think over time, we all learn from engagement with yourself and your colleagues, but also with our customers who have perspectives as well. We'll very methodically work through our own understandings and where necessary, we'll make changes. If they're made, they'll be done on a very considered and informed basis.
Thank you.
Thank you very much for coming today. We have a question at microphone number two.
Chair, I would like to introduce Pablo Baruti.
Welcome, Mr. Baruti.
Thank you, Chair. I just wanted to ask in relation, there is a couple of questions here, but if you could take them in turn, I would be grateful. The number of up to 30%, 32% of the agricultural exposure has been stated twice, and you have not contested it. It is not in the annual report, but if you reverse out the numbers, it comes to roughly that. Do you accept that up to 30%, maybe 32% of the agricultural book could be exposed to significant deforestation as per the annual report?
I think the information that we have provided in the annual report is vetted, it is reviewed, it has gone through a whole series of quality assurance processes. Through the course of the meeting today, different numbers and different percentages are given to us on a whole range of factors. We take those on board, we note them, but this is not the forum to actually agree or disagree with numbers that are put into the meeting without the full disclosure, the methodologies understood, and the caveat. I am listening to what you are saying, I am acknowledging what you are saying, but I am not going to validate numbers that are not numbers that we have generated and undertake in our normal verification processes.
Sure. Thank you, Chair, and just as a follow-up. If it were the case, and presumably you would have the opportunity to go following the meeting and check those numbers, that it was one in three almost dollars that has exposure to deforestation. Given that WWF has said that the East Coast of Australia is a deforestation hotspot, that we have an ongoing and long-term issue with deforestation in this country, and you yourself reflected earlier in the meeting on the APRA report and the findings from the APRA report, that the bank in the past has been slow and complacent to take on new risks and assess and deal with new risks as they have emerged. The 30% would seem like an awfully high number given the nature of this issue.
I will just go back to the EPA’s guidance. Each matter is assessed on its individual merits. I think the difference when you are talking to a bank is that we need to understand each customer situation, and broad numbers are not necessarily indicative, and the EPA says it itself and its guidance, are not indicative of what is actually happening on the ground. We have to get that bit right, but it is not for me to verify the persuasive or facts put on the table in this meeting itself. But as I said, we listen to what we are being told, we will reflect on it, and the engagement will continue. It is a really important topic, and we have acknowledged that.
Thank you.
Thank you very much. We are going to move to a question online.
Chair, we have a question from shareholder Steven Main. "You are well short of AGM best practice. The proxies were not disclosed early to the ASX with the formal addresses. There is no live online voting, and you have never disclosed headcount data as many other companies have. How many shareholders voted by proxy on this proposed constitutional amendment, and what sort of communication campaign did you run to get out the vote? Also, has there been a material protest vote against the board's recommendations on these two shareholder resolutions, and how many shareholders attended in person today?
There is a lot in that. We will be reporting the data and information from the AGM as we always do. Our engagement this year has been the same as the engagement in previous years. We take engagement with shareholders very seriously. We work on our disclosures through, what is it, 405, I think, page annual report with all of the sustainability, remuneration, policies, and procedures necessary. I do not know that there is much more we can disclose that is not in the report. But as I have said, we will always listen. I think that there is very good information presented to us in terms of challenge, whether it is on regional branch closes, whether it is on cost of living, whether it is on productivity, whether it is on nature.
There is certainly a wide range of very important topics that we need to discuss. But to the specific broad point on what we do and don't report out of the AGM, I think we're comfortable with our processes. We'll continue with those, but as I always do, we'll reflect on the feedback that we receive.
No more questions online at this stage.
I don't believe there are any more questions in the room. I now put the resolution to the meeting and note that the board recommends that the shareholders vote against item 5A. But I would just thank those who've come for the questions they've asked and the manner in which those questions have been asked. That's very much appreciated. Details of the direct and proxy votes received prior to the meeting. I do believe there's someone filming there at the moment. They might be taking a photo of the gafilla. Prior to the meeting in relation to this resolution are displayed on the screen. Please mark your voting card in relation to item 5A to amend the company's constitution. As I noted earlier, item 5B is a contingent resolution.
It'll only be put to the meeting if 5A is passed by at least 75% of the votes cast by shareholders entitled to vote on the resolution. Given the direct and proxy votes received prior to the meeting in relation to item 5A, item 5A will not achieve that threshold. So item 5B will not be put to the meeting. Consistent with our approach to welcoming shareholder feedback, we've already provided a reasonable opportunity for questions on the matter of item 5B. That concludes the final item of business on today's agenda. Please complete your yellow voting cards and place it in one of the ballot boxes that representatives of MUFG Corporate Markets are now holding or that are near the exits. If you need any assistance with completing your voting card, MUFG representatives are available in the room to assist you.
The results of the poll will be released on the ASX and made available on the bank's website later today. I declare that the poll will close 15 minutes after the meeting closes. Thank you all very much for your attendance today, either here or online, and for your continued support of the Commonwealth Bank of Australia. I invite you to join the board and leadership team for refreshments outside the room at the conclusion of the meeting. I encourage you to provide us with your feedback and your experience today by contacting us via the Investor Center on our website. I now declare the meeting closed, subject to finalization of the poll. Thank you, everyone.