Commonwealth Bank of Australia (ASX:CBA)

AGM 2021

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Oct 13, 2021

Good morning, ladies and gentlemen. My name is Helen Dowley and I'm your MC for today's Annual General Meeting of the Commonwealth Bank of Australia. My role is to help shareholders understand how the meeting will work, how shareholders may ask questions and how you can vote. I'd like to begin by acknowledging the traditional owners of the land on which we meet, the Gadigal people of the Eora nation. And we pay our respects to their elders past, present and emerging. CBA had planned to welcome shareholders to attend the 20 21 AGM in person. However, with COVID-nineteen an ongoing health concern and restrictions on public gatherings remaining in force, the board determined the safest way to hold this year's AGM is online. An online meeting allows all shareholders regardless of where they live, the opportunity to participate either online or via the telephone. Before I hand over to your Chairman to formally open the meeting, I'd like to explain how the technology will help us conduct this meeting and the procedures that allow shareholders to participate. Along with the notice of the meeting, we've prepared a guide to this AGM to help you. This guide can be found both on the AGM page of CBA website or if you're attending online, simply click on the Related Documents button on your screen. Now if you experience any issues with your technology today, you can chat online to an operator by clicking on the Help Centre button, which is located under the webcast screen. Or you can press star 0 on your keypad if you're attending via telephone and you need assistance. If we experience a major IT disruption beyond our control that prevents shareholders from participating. We will adjourn the meeting and notify the ASX with details as to when the meeting will recommence. If you're participating online today, you'll see a split screen which shows the video stream of the meeting and the presentation slides. You can make either of these screens bigger or smaller by clicking on the yellow button labeled Switch View on the right hand side of your screen. Now to voting. Shareholders attending the meeting online can vote on the resolution set out in the notice of meeting by selecting the white button labeled information, which is located below the webcast screen. You can then select the yellow button labeled shareholder voting and questions. A separate Tab will open in your browser which will take you to the Link Market Services shareholder portal so you can vote. You will need to register to be verified as a shareholder or proxy holder. To get a voting card, Select the Edit Card button located at the bottom of the screen. Once the Chairman formally declares the poll open, You may vote on a resolution at any time during the meeting. For shareholders attending today's meeting via telephone, You will need to submit your votes online. Now to some guidance on asking questions. Shareholders who've submitted questions Prior to the meeting, thank you. We have sought to address many of these questions throughout the remarks that will be made by both the Chairman and the Chief Executive Officer in their formal addresses to the meeting. Shareholders attending online who wish to Submit a question now or during the meeting can do so by selecting the Ask a Question button located at both the top and bottom of the screen. We encourage you to please submit all your questions now to assist us in getting through as many of your questions as possible. To ensure all shareholders have an opportunity to ask for question today. The Chairman will accept up to 2 comments or questions from each shareholder for each item of business. We ask that you please submit only one question at a time. Please select the item of business your question relates to, Type in your question and press submit. Your question will then be placed in a queue. Online and you'll be asked to revise your question. Shareholders attending via telephone are able to ask a question live into the meeting by pressing star 1 on your keypad. When the Chairman calls for questions on each item of business, you will be asked to press You will then be put into a queue. You will still be able to listen to the meeting while you're in the queue. When it's your turn to ask your question, The operator will introduce you to the meeting and unmute your line so you can be heard. When questions for each item of business are ready, the Chairman will ask for any questions received. For the questions received online, I will introduce the shareholder by name and I will read the question for the Chairman to answer. For questions received via telephone, The call operator will introduce the shareholder by name and the shareholder will then be able to ask their question for the Chairman to answer. It's possible that if we receive a number of questions that are similar, we may answer those questions collectively. Questions submitted on the individual banking or personal shareholding matters will not be put to the meeting. You will be contacted after the conclusion of the meeting to ensure you receive the individual support that you require. Representatives from CBA's Share Registry, customer service or customer advocate teams are available to assist you. Contact numbers are provided on the CBA website that's atcombank.com.au.combank.com.au or by selecting the Contact Us button located at the bottom of the screen for those attending online. Just another reminder to those people attending online to please submit your questions at any time from now, but remember to limit your and submitted online to 1,000 characters and submit your questions one at a time. It is now my great pleasure to introduce Catherine Livingston, your Chairman. Thank you, Helen, and good morning, ladies and gentlemen. On behalf of my fellow directors, It's my great pleasure to welcome you to the 2021 Annual General Meeting of the Commonwealth Bank of Australia. As we have a quorum, I declare the meeting open and propose that the notice of meeting be taken as read. The resolutions in the notice of meeting will be decided by way of poll, which I now declare open for each item of business. The poll will close 10 minutes after the conclusion of the meeting. We currently have 425 people in attendance. I would now like to introduce our Board, the Chief Financial Officer and the company's secretary. Joining me here in Sydney, starting from my far right, Peter Harmer, who will stand for election today, Having been appointed to the board on the 1st March this year, Anne Templeman Jones, who is Chairman of the Audit Committee and will stand for reelection today, Matt Common, Chief Executive Officer and Alan Docherty, Chief Financial Officer. Joining the meeting today via video conference due to travel restrictions are Shareesh Abt in Singapore, Simon Mutter in New Zealand Mary Padbury in Melbourne Rob Whitfield AM, Chairman of the Risk and Compliance Committee in Regional New South Wales Paul O'Malley, Chairman of the People and Remuneration Committee in Melbourne Genevieve Bell, AO in Canberra and Julie Galbo in Denmark. Julie will stand for election today, having been appointed to the board on the 1st September And Christie Huxtable, company secretary in Brisbane. Christie is supported by Michelle Baker who is with us here in Sydney. Also attending today's meeting are members of the bank's executive leadership team and Mr. Matthew Lunn from our external audit at PwC, who will be available to respond to any specific questions you may have in relation to the audit of the bank's financial statements. Questions for the external auditor received prior to the meeting have been responded to directly. And those responses are available on request by contacting our share registry. The agenda for today's meeting is as follows. First, I will comment on a number of important matters. Then Matt Common, our CEO, will speak. And after Matt's address, we will proceed with the formal items of business as set up in the notice of meeting. When the Commonwealth Bank was established just after Federation, its role was to be a bank for all Australians. And this role has never been more relevant than over the past year with CBA having supported thousands of individual and business customers impacted by COVID-nineteen. And our purpose of helping Australians improve their financial well-being has also never been more relevant. We have sought to play a leadership role in enabling economic growth and prosperity through supporting individual customers and communities. As the pandemic persisted into the 2021 financial year, your bank continued to defer repayments on home and business loans and offered a wide range of support to customers. This helped alleviate financial pressure for both individuals and businesses. The pandemic has also been notable for governments, regulators and industry working collaboratively to implement support programs quickly, to help minimize the health, social and financial impacts of COVID-nineteen and to navigate a path to recovery. CBA and other banks continue to provide data to help inform federal and state government decisions about support measures and packages. To this end, the strength and stability of a well capitalized and well regulated banking sector has been a significant national asset. Over the course of the pandemic, our customers have embraced digital banking in record numbers, which has helped us tailor our support and improve our understanding of individual needs. Sadly, we're aware that the current circumstances may have increased Pressure on customers in vulnerable situations, including those experiencing domestic violence and financial abuse. The bank expanded its support for these customers through its groundbreaking next chapter program, which includes referrals to external support services where appropriate, providing safe banking support for people experiencing difficult and often dangerous situations and access to free financial coaching and assistance. CBA also provided financial and non financial support to its people, most of whom worked remotely. And it's important to note that the bank did not receive any JobKeeper payments. While managing the impact of the pandemic, the bank has continued to implement its simpler, better bank strategy. This has included transforming itself over the past 3 years through its remedial action plan or RAP, which was implemented in response to APRA's 2018 prudential inquiry into our governance, culture and accountability. As shareholders would recall, the inquiry made 35 recommendations And our RAP translated these into 177 milestones with a 3 year timetable through to 30 June 2021 to design, implement and embed the changes. The RAP has been the most extensive program of its kind undertaken by the bank And has led to fundamental changes in systems and processes and resulted in widespread change in the bank's culture. In its final report, the independent reviewer promontory observed that CBA has changed as an institution And the weaknesses called out by the inquiry report have been addressed by the program and in all cases, material improvements have been made. These changes are enabling our people to provide better service to customers, manage risk more effectively and better meet our compliance and regulatory obligations. As Promontory also observed, the program implemented by CBA To give effect to the remedial action plan was one of the most comprehensive reforms of corporate culture in recent Australian memory. Nonetheless, we recognize that sustaining the hard fought gains of the past 3 years will require a permanent commitment by the bank at all levels. The effectiveness of the RAP will ultimately be determined by how sustainable the changes become. We therefore have in place a formal transition plan and an ongoing program of work to ensure that the progress achieved to date Becomes enduring. As a result of our progress, APRA has approved the lifting of $500,000,000 of the $1,000,000,000 capital overlay it imposed in May 2018. Alongside the RAP, we strengthened our code of conduct, which enshrines the standards we expect of our people. And we refine the bank's values. These values of care, courage and commitment Represent the principles that guide our behavior every day. Cultural change has been further reinforced through the remuneration framework in which outcomes include an individual's accountability and risk management performance. For senior executives, A larger proportion of remuneration is now paid in the form of equity, for which the deferral periods have also been increased to up to 7 years for the CEO to ensure that executive remuneration is more closely aligned with the longer term returns for shareholders. Turning now to the importance of sustainable outcomes. We recognize that commercial, environmental and social outcomes are interconnected And that balancing the interests of stakeholders involves achieving positive outcomes in all dimensions. During the past year, We have strengthened our approach to sustainability, including updating our environmental and social framework, which sets out for our people as well as our stakeholders the standards we have set. Of note, in relation to the social aspect of the framework, in March 2021, We published our first modern slavery and human trafficking statement, which describes our approach to ensuring that our processes, Including general banking, lending, financial crime detection and supply chain management can identify and mitigate human rights abuses, including modern slavery. The environmental dimension of the framework confirms that we are committed to playing our part in limiting climate change, in line with the goals of the Paris Agreement and supporting the transition to net zero emissions by 2,050. During the year, the board reviewed our progress on climate related initiatives and launched a group wide program to factor climate considerations into the way we do business. We have developed products that help home loan customers to reduce their emissions. These include low cost financing for energy efficient solutions Such as solar panels. For business and institutional customers, we are providing products such as sustainability linked loans and green bonds. There is extensive information on the group's approach to climate challenges and opportunities in this year's annual report. Turning now to our financial results. Despite the challenging economic environment, the bank performed well in the year to 30 June 2021 and has delivered attractive returns for shareholders. The financial results reflects the significant investment in systems and capabilities over the past 3 years and the good progress and disciplined execution of our strategy. Cash net profit after tax was up 19.8% on the prior year, reflecting an improvement in economic conditions and the strong operating performance of our core banking businesses. During the year, the bank continued its program of divestments of non core businesses in line with its strategy to become a simpler bank. The divestment program has now generated $6,200,000,000 of excess capital since it began in 2018. This capital helped produce a strong balance sheet and combined with strong organic capital generation And disciplined capital management resulted in a common equity Tier 1 capital ratio of 3.1% at 30 June, which is well in excess of APRA's unquestionably strong benchmark of 10.5%. The board determined a final dividend of $2 per share, taking the total dividend for the year to $3.50 per share fully franked and resulting in $6,200,000,000 of dividends for the past financial year. Earlier this month, we completed an off market share buyback, which has returned a further $6,000,000,000 to shareholders. The buyback received strong demand and was significantly oversubscribed. All shareholders were treated equitably And the buyback was structured to ensure retail shareholders were not disadvantaged. We believe that the off market buyback benefits all our shareholders whether or not they participated. For shareholders who continue to hold their shares, The buyback has reduced the number of CBA shares on issue, thereby supporting the future return on equity, earnings per share and dividend per share. The dividends for the full year and the share buyback will have returned more than $12,000,000,000 to shareholders before the end of October. I would like to take a moment to provide an additional perspective on CBA's contribution to the Australian economy And to Australian Households and Businesses. The total shareholder return, or TSR, for the 2021 financial year was 48%. The 5 year return was 72% and the 10 year return, 226%. CBA also paid $6,000,000,000 in wages, salaries and superannuation to its over 40,000 employees. And as one of Australia's highest taxpayers reported a tax expense of $3,600,000,000 The bank also paid $5,700,000,000 to suppliers, the vast majority of whom are Australian owned SME businesses. Turning now to the board. The board remains focused on ensuring that it has the appropriate diversity of skills, experience And strategic thinking capabilities required to lead Australia's largest financial institution and be at the forefront of digital banking. Since last year's AGM, 2 new directors have been appointed. In March, the Board welcomed Peter Hama. Peter was previously Managing Director and Chief Executive Officer of IAG, where he drove digital innovation across the business. In addition to a focus on customer service, Peter has direct experience in dealing with the impact of climate change and management of climate risk. In September, the board appointed Julie Galbo. Julie brings more than 20 years experience in financial services, risk management and compliance with major European Financial Institutions. Julie is an experienced leader in strategy and implementation and has also served as the Deputy Director of a European Financial Supervisory Authority. These appointments have further strengthened the mix of skills, Knowledge and experience relevant to the bank's strategic priorities, particularly in digital technology. Julie Galbo and Peter Hamer are standing for election today. Anne Temperman Jones and I are standing for reelection. And as advised at last year's AGM, Wendy Stops retired from the Board at the end of that meeting. I would like to take this opportunity to thank my fellow directors for their continued support and their commitment and contribution to the board and to the bank. This year, reflecting the progress over the past 3 years, CBA has updated its brand, Refined its core values and evolved its strategy to set out a more ambitious agenda to build tomorrow's bank today. This strategy includes the development of new digital products and services which reimagine the way financial services can be tailored to individual customers and an ambition to provide a leading digital experience. The strategy also reflects our purpose and values With an explicit intent for the bank to play a leadership role in Australia's economic recovery by contributing to the nation's transition to a digital and Environmentally Sustainable Economy and thereby underpinning the country's prosperity and social well-being. In the year ahead, we will continue to focus on supporting our customers and communities and maintain our commitment to delivering operational excellence and a strong capital position, both of which will support sustainable returns for shareholders. In aspiring to these ambitions as the bank for all Australians, We recognize the importance of achieving a balance of outcomes for all stakeholders. In closing, I would like to thank all of our and shareholders for their support and feedback. I also thank our employees who have demonstrated care, courage and commitment throughout the past year in their determination to serve and support our customers. And finally, I would like to acknowledge the outstanding leadership of our Chief Executive, Matt Common, whom I will now ask to address the meeting. Thank you. Thank you, Catherine. Good morning to everyone once again joining us virtually. I'd also like to acknowledge the traditional owners of the lands from which we are joining this webcast today and pay my respects to Elders past, present and emerging. At our last AGM, we acknowledge the challenges Australians had faced in 2020, Droughts, bushfires and a global pandemic. 12 months on, challenges continue. Through conversations with our customers and communities, we've heard about their concerns for the future. At the same time, We've also seen how communities have come together to support each other with determination and resilience. Our job is to keep doing everything we can to ensure the country emerges stronger from this difficult time. Since the pandemic began, We have helped our customers in a number of ways, including home and business loan deferrals, fee waivers, business recovery loans and tailored support and assistance packages for those experiencing ongoing hardship. That support has had a significant impact. Almost 160,000 home loan customers and more than 90,000 business loan customers were able to defer loan repayments, with almost all of them being able to recommence their repayments. We've lent just under $2,000,000,000 to more than 20,000 businesses through the government backed SME guarantee loan scheme. We kept our customers up to date via our COVID-nineteen support page on our website, which has had more than 6,000,000 views. We've sent 1,700,000 personalized messages to our customers, reminding them of COVID related that's available. Following the most recent COVID-nineteen outbreak in June this year, we offered a repayment holiday of up to 3 months to eligible small business customers with a better business loan. Home loan customers significantly impacted by the latest lockdown restrictions given access to a 2 month repayment deferral. We extended our moratorium on foreclosures until February 2022. Alongside this, we helped thousands of customers in vulnerable circumstances and our community well-being team helped more than 22,000 people with their banking needs and connected them to external services where needed. Being there for our customers when they need us most will continue to be a priority in 2022. This year, our refreshed values of care, courage and commitment Helped build an even greater sense of purpose among our 42,000 people. Employee engagement remains high at 80%, With 89% of our people saying they are proud to work for the bank and 92% feeling their manager cares about their well-being. I'm glad our people feel supported and it has been a privilege to work alongside them once again this year to serve our customers, shareholders and our country. Vaccination and returning safely to the workplace is something we've been discussing a great deal. We're doing all we can to support Australia's ongoing vaccination effort, while ensuring our people and customers feel safe as the country reopens. Supporting our communities has been at the core of the Commonwealth Bank's purpose for more than 100 years, and that will never change. In 2021, we invested $247,000,000 in community programs, including grants to support people still getting back on their feet after last year's Droughts, floods and bushfires. Next chapter, our program to help address domestic and financial abuse, Continued to gain momentum with the launch of the Financial Independence Hub delivered by our partner, Good Shepherd. The Financial Independence Hub offers our customers and members of the community free specialist 1 on 1 financial coaching and support. It aims to help people impacted by financial abuse build confidence and capability in managing their own finances with referrals to support services and in some cases, access to solutions like interest rate Freelance. We also continue to elevate the importance of women's sport to further gender equality. This year, the bank became the naming rights partner of the Australian National Women's Football Team, the Matildas, as well as the Junior Matildas and the Young Matildas. Combined with our long term sponsorship of women's cricket, We believe we are one of the largest ever investors in Australian women's sport. In January this year, we refreshed our strategy and set a more ambitious agenda, to build tomorrow's bank today for our customers. This strategy builds upon the work done in the last 3 years to become a simpler, Betterbank. The strategy includes 4 priorities, which we've already begun delivering on. Leadership in Australia's recovery and transition will see us help our customers and the country recover from the challenges of the pandemic and help our economy become more resilient and sustainable. As well as supporting households and businesses through the pandemic, We've remained focused on helping to build Australia's future economy, funding critical infrastructure and job creation projects throughout the year. We're also working on initiatives such as the sustainability linked bond and loan because we believe that a sustainable future is a critical part of planning for the future economy. By reimagining our products and services, We will differentiate our customer proposition by building new services in our digital channels, while partnering with others to develop new services and ventures. We've helped connect Australians with $481,000,000 in unclaimed benefits and rebates through our app feature, Benefits Finder. We're putting cheaper, cleaner energy within reach for more customers through the CommBank Green Loan, allowing eligible home loan customers to buy and install Eligible clean energy products such as solar panels, battery packs and solar hot water systems. We became the 1st major Australian bank to launch a buy now, pay later product, StepPay, while we're also helping customers access discounts and save money on everyday bills like broadband, Energy and shopping through innovative partnerships with Australian businesses like Moore Telecom, Amber and Little Birdie. Global best digital experiences and technology will underpin our aim of giving customers not just the best digital experience a bank can offer, But the best digital experience any financial services company can offer. More than 6,400,000 CommVec app users benefited from the value delivered via our customer engagement engine, which uses insights from customer activity to drive highly personalized and relevant banking features. These include features like BillSense, helping customers predict and plan for upcoming bills and category budgets, which guides customers to nominate a target budget and then helps them to track their expenditure. Simpler, Better Foundations is how we are keeping the bank strong and safe and making it easier for our people to get things done. We want to excel at managing both financial and non financial risks, while taking a disciplined approach to how we manage both our costs and our capital. We've continued to simplify our portfolio of businesses with a further 4 divestments completed during the year. This has enabled us to remove complexity, increase our focus on our core businesses and invest in key areas to deliver better shareholder outcomes. The excess capital generated by those divestments has now been returned to shareholders, thanks to the completion of the $6,000,000,000 off market share buyback. The strong financial results that Catherine mentioned, including the 20% increase in our cash net profit after tax, are crucial to our ability to deliver on our strategy. A deliberate and sustained focus on our customers, digital engagement And operational excellence helped us grow income by 2%, reflecting above system growth in Home and Business Lending and deposits. Business lending grew at 3x the system, and in 2021, we lent $11,000,000,000 more to businesses than during the previous year. Improved economic conditions meant our loan impairment expense was significantly lower than in 2020. The bank's strong performance was despite record low interest rates, strong competition, both from banks and non banks. As the past 18 months have shown, Australia has a strong, stable and secure financial system. This includes financially strong and well capitalized banks like ours, which together with support of the government and regulators have helped the country find its way through the worst pandemic in living memory. Looking ahead, there's cause for optimism. The stimulus provided by our governments during lockdowns has been doing its job. Australians continue to accumulate more savings and many businesses are ready Take advantage of opportunities ahead. Housing activity is still strong. We are continuing to monitor this closely and adjust our lending settings appropriately. Finally, we're seeing digital technology enable a raft of changes, which come with both opportunities and risks. We know that many of our customers have had a difficult year. And for some, those challenges may persist. But the Commonwealth Bank will be here. I'm proud to lead an institution with the people and financial strength to be able to support our customers, Communities and the Country. I'd like to thank Catherine and the Board for their leadership and our people for their dedication, hard work and resilience. And I'd like to thank you, our shareholders, for your ongoing support of CBA. Thank you. Thank you, Matt. Now there are 5 items of business on today's agenda. Consideration of the 2021 financial statements and reports, reelection of myself and Anne Temperman Jones and election of Peter Hama and Julie Galbo, Adoption of the 2021 remuneration report, grant of securities to our CEO, Matt Common and resolutions requisitioned by a group of shareholders led by market forces. I will introduce each item of business separately and then invite Following discussion on each item, valid direct and proxy votes received prior to the meeting will be displayed on your screen and read aloud for those attending via telephone. I will then ask the shareholders and proxy holders to vote on the item. The voting exclusions for Item 34 are set out in the notice of meeting. If you wish to leave the meeting early, please ensure that you have submitted your votes. Voting on all resolutions can be done in advance online now. Link Market Services will oversee the poll Mr. Matthew Lund of PwC will act as scrutineer. As the results of the poll will not be available before the meeting closes, they will be released to the ASX and made available on our website later today. We will now move to the first item of business, which is the consideration of the financial reports, the Director's Report and the Auditor's Report for the company for the financial year ended 30 June 2021. While there's no resolution for this item, Shareholders are welcome to ask questions on the reports, management and the operations of the bank generally as well as on the audit. I would kindly ask shareholders and proxy holders to hold their climate related questions until we come to items 5a and 5b when we'll deal with all climate related matters, and there'll be plenty of time for questions and discussion. I now invite I will now move to the first question. Chairman, we've received a question in writing prior to the meeting. The shareholder notes that the auditors' fees overall increased from $39,600,000 to $40,300,000 However, the audit and review of financial statements component increased 11% from £20,400,000 to £22,600,000 Could you justify the reasons for the significant fee increase? Thank you, shareholder. The audit this year, this past year, Actually included a few additional items including further regulatory requirements on the audit and we also Provisioned new systems which required special audit to make sure that the data coming through those systems and feeding into our accounts Had full integrity. So there was additional work there and then there's obviously the ongoing increase related to CPI and rates. Of the increase, we would expect that more than half would not be recurring in writing prior to the meeting. The shareholder asks, why did the bank conduct a share buyback when it could have offered all shareholders a special fully franked dividend. This would give all shareholders a return without selling shares and it would save the company the expense of the buyback. Again, thank you shareholder for the question. The board obviously gives capital management considerations A great deal of attention and looks at all of the options available. And as you know, the bank has a significant balance of Franking credits, which it was, obviously keen to return to shareholders. We had a higher dividend this year, As you know, but the Board determined that an off market share buyback would be the most efficient way of returning Capital to Shareholders. And as I said in my remarks, we believe that that benefits all shareholders, Even those who retain their shares because of the reduced number of shares on issue. I'd note that a dividend and a share buyback both incur significant cost to execute. Gentlemen, we've received this question online before the meeting regarding Item 1 and it's from the Australian Shareholders Association. The ASA congratulates the bank on a strong recovery from the COVID pandemic and is pleased to see that the share price has recovered well and dividends are returning to healthy levels. The ASA asks, While the bank has shown strong above system growth, particularly in Business Banking, where do you see opportunities for future sustained growth. And how do you propose to use the timely investment in digital banking applications to drive that growth? Well, thank you to the ASA for that question. As Matt has outlined in his remarks, we have Made significant investment in digital capability. And much of this is responding to the fact that our customers are choosing to engage with us much more on digital basis than direct personal engagement. I think 70% of our Transactions by value are now on digital platform. The investments that we're making is Partly to ensure that our customers get the level of experience that they have from Other sectors and we need to match and exceed that digital experience. But it's also enabling us to develop new products And we've spoken about the sustainability linked loans and green bonds which are for our institutional and banking customers. For our business banking customers, the digital capability will provide faster turnaround times And better service levels and then obviously for those customers using the app, the digital experience is something that We want continuous improvement in. So if we build this better experience and we build the better products, Then this will actually enable us to have better customer engagement and better customer loyalty and more people wanting to work with the Commonwealth Bank. Chairman, we've had a number of questions from shareholders received in writing prior to the meeting on what the mortgage book risk is to the CBA, given low interest rates and high house prices. Chairman, one shareholder asks, what is the Board doing to mitigate the risk in relation to housing affordability and the possibility of rising interest rates and possible falls in house prices in the future. Thank you, shareholder. Well, I think the first thing I would just reinforce is that we have very stringent responsibility lending rules in Commonwealth Bank. And of course, they're reinforced through the APRA requirements and the NCCP Act. So there's no question about our approach to responsible lending. In terms of the current environment, We actually have the, at the moment the highest serviceability rate in the market. So that's 5.25 percent and we assess all lending against that rate to make sure that if interest rates do Increased to that level that customers can still repay the loan without suffering undue hardship. Now we increased that rate Just recently it was 5.1%. It's now 5.25%. Since we made that increase, of course, APRA has announced that it will be requiring a serviceability buffer of 3% versus the previous 2.5%. But we apply really stringent lending criteria to all lending. And I would say it's in no one's interest for us to lend money to people that puts them into hardship and they can't repay. Chairman, we've received this question before the meeting from the Australian Shareholders Association. It's a comment and a question. The ASA notes there have been recent media reports of a substantial fraud impacting a major Australian bank, apparently using falsified documentation and forged signatures by an intermediary organization. Has the bank reviewed its own fraud detection systems in light of these reports? And does the bank, as a matter of routine, Check the validity of documents and signatures with the customers purportedly initiating payment requests. Well, thank you for this question because I'll refer back to the comments that I made about The remedial action plan and the extent to which that has transformed the way the bank operates. And part of that plan, one of the most important themes was related to risk and management of risk, Then to accountability and then to roles within the bank what we call the 3 lines of accountability. So line 1, line 2 and line 3. All of this focused on understanding our risks and the controls that we have in place to manage those risks. Now those controls are checked by line 1, who's responsible frontline of the business, Then by line 2, which we call line 2 assurance. And then of course we have line 3, which is internal audit. And internal audit then reports up to the audit committee. So through the wrap, we have really strengthened our risk management framework, our Standing of controls and the way that we actually assure those controls. So I just give you that background as confidence That we have actually improved our control environment. Obviously, in relation to the matter that you refer to, whenever we see something in the media relating to a possible event which could have implications for our business. I mean clearly we look and we make sure that we have controls in place. Chairman, we have a comment and question from a shareholder received in writing prior to the meeting. The shareholder states, I'd like to thank the board for last year's results and particularly appreciate the work and assistance provided in addressing domestic violence and Financial Abuse. Important work is also being done in educating employees about modern day slavery. And you have reported that 1,000 employees have completed training in this respect. Given there are over 44,000 employees, How many employees do you intend to receive this training and over what time frame? Yes, thank you for that Very important question. So the 1,000 employees that we refer to were actually those that received very specialized training in the procurement group because as we know it's through procurement and supplies that we can potentially be alerted to modern slavery issues. However, there was much broader training throughout the group as part of our ESG framework training which and the ESG G Assessment tool includes consideration of modern slavery and their business bankers in particular to receive Specific training on this. So in all actually about 12,000 people have received training in the past year And of course that number will be increased as we go into this year. So our modern slavery statement for the year ended 30 June 21. We'll clarify and refer to all of this additional training that actually has been undertaken. Chairman, we have received another question in writing prior to the meeting. The shareholder asks, why did CBA allow nearly all of its employees to vote on the EA despite not being employed under the EA. Therefore, how is the vote able to pass if ineligible employees voted? Thank you for that. Well, if we look at the employees directly covered by the EA and their vote, the vote would have passed. The reason further employees were allowed to vote was their arrangements are actually the EA provides a foundation for their arrangement. So they are affected by the outcome of the EA. But as I said, if it had just been limited to EA only employees, the vote still would have passed. Chairman, we've received the following question from a number of shareholders online, including Kevin Fisher, Sandra Bacon and Cathy Gardiner. The question is, as an employee and shareholder, I've always been proud that CBA promised to keep and create jobs in Australia. It was a strong point of difference. What's good for our communities has been good for the bank. I'm worried that a program of sending Potentially, thousands of jobs to India has begun and that it poses a risk to what makes CBA great. How can the board justify this change? Thank you. Thank you, shareholders. So just To explain, we do have a subsidiary in India now called CBA India and they are direct employees of CBA. The reason for establishing CBA India was to increase capacity, particularly to get Skills and capability which we could not get in Australia and there's been obviously much discussion in Australia about the shortage of skills and the very tight market for those skills. So the operation that we have in India adds to what we have in Australia. In Australia, we're currently I think in the last couple of months, we have recruited 3,000 people. We are very actively recruiting in Australia, including engineers. Now some of the engineers in Australia and some engineers in India, but this is all about increasing the capability of the bank. So it's not I suppose the other point is that as a business evolves and roles change, Some roles are no longer needed. But in those instances, we have a very active redeployment program and our latest results on redeploying people whose roles are no longer needed. We have a 41% success rate in redeploying people inside the business. The other program we have is what we called reskilling. And this is part of what Australia needs to do more broadly. And this is reskill people and improve their digital literacy so that they can take on The roles that are now being increasingly required by business. And in that reskilling, We have had, I think over 50% success rate in people moving into new roles and the roles of the future. So this is all a question of increasing the capability of Commonwealth Bank And adding roles, not moving roles. Chairman, this question was received online by shareholder Stephen Main. CBA has borrowed more than $51,000,000,000 from the Reserve Bank for the next 3 years at just 0.1%. Why did we need more support than any other bank? And given this government bailout, Why did we subsequently pay $6,200,000,000 in dividends for 2021 financial year plus complete a $6,000,000,000 buyback. Why don't we pay the $51,000,000,000 RBA loan back early and be a proudly independent listed bank not relying on government support. Thank you, Mr. Main. Actually, I don't agree with your characterization of the term funding facility which was provided by the Reserve Bank As bailout, it was a very deliberate government policy to increase liquidity in the system so that banks Could then on lend to customers and at perhaps more favorable rates than otherwise would have been possible. And we believe the program was very effective. The amounts available under the program was determined by Bank's existing portfolios. And, we sought to take full advantage so that we could pass that advantage on to our customers. Chairman, we've received the following question from a number of shareholders, including Suzanne Hebron, Claire Bruce and Renee Pulpit online. Why has CBA begun offshoring jobs in the middle of a pandemic and to what extent is this plan to continue? Part of CBA's strength both operationally and as a brand is that it invests in Australia by not sending jobs and Infrastructure Overseas. This has always been part of the promise to shareholders as well. Why change? Well, thank you shareholders. As I said In my just earlier remarks, this is not about moving jobs. This is about adding capability to the organization. And we are actively recruiting in Australia. And I mentioned that we've added we've appointed 3,000 people In the last few months and we have several 1,000 open positions. So, we're definitely looking to recruit people in Australia But we can't get all of the skills that we need and we can access those through India. So we are adding those skills in India. The other advantage that the CBA India provides is not quite follow the sun capability, but it does extend the time zone under which the bank's operations continue. So just to reinforce, we are absolutely committed to Australia. And as you know, All of our customer facing contact centers are based in Australia. But for the bank to compete as it needs to do in a digital environment, We need digital skills and we just can't get all that we need in Australia. Jim, and a second question from shareholder Stephen Main regarding item 1 was received online. Approximately how many of our 850,000 shareholders participated in the recent $6,000,000,000 buyback And why didn't any of the directors participate? What was the bank's policy in terms of directors, senior executives and staff participating in the scheme? What was the total number of shares tendered at the 14% discount rate? Well, I just I might have to get you, Helen, to Run through some of that again, but just on a couple of points. It was a very specific policy decision for the directors not to be able to Participate in the buyback that from our point of view that would have been a conflict of interest in making decisions around the structure and nature of the buyback. Obviously, quite a few shareholders did participate. And in terms of the outcome, Virtually all participated at the final price with that discount. But Ellen, maybe you could just run through that question again to make sure I've covered it off. Sure. I'll ask the first part was how many approximately of our 850,000 shareholders participated? Then the last part and why didn't directors participate? And then the last part was the bank's policy in terms of directors, senior execs and staff participating in the scheme and what was the total number of shares tendered at the 14% discount rate? Well, just Confirming that the virtually all of the shares were that were attended were that were accepted were at the 14% discount rate. And as you know, the buyback was significantly oversubscribed. Chairman, we have received another question online from shareholder Georgina Rulis. Are you comfortable with the diversity of the board you chair? I'm extremely comfortable with the diversity of the Board. As you know, we have if you talk about gender diversity, We have obviously probably a leading diversity score in that regard. But it's actually more about diversity of thinking when you're talking about a Board and we have very diverse backgrounds, people on the Board, Obviously several from Financial Services, but quite a few not from Financial Services. We have good Technology experience on the Board, which as I said, is so crucial now as we go into an increasingly digital environment. And we have, I think Good perspectives from outside Australia. So although we're a domestic bank, it's important that we get perspectives from international Domains, now we have, Sherish Abt from Singapore who presents with an Asian perspective. We now have Julie Galbo from Europe and we specifically sought to find a director from Europe and actually from the Nordic countries because of their experience with digital innovation in the banking domain. And then of course we have Simon Muto who's based in New Zealand and a very important part of our business is ASB Bank in New Zealand. So in terms of Geographical perspectives and experience from executive roles and gender, I think we have a very good mix of Diversity and I can assure you that board discussions are very animated. Chairman, we've received another question online from shareholder Peter Calleiro regarding Item 1. I received my CBA shares through the takeover of Colonial Limited in 2000. Their prized asset was Colonial First State. Now that CBA has divested the Colonial First State business, how would you rate the success or otherwise of the takeover of Colonial 20 years ago? Are there any lessons to be had from this takeover? Well, thank you for that. We clearly as part of our divestment program, we have Sold quite a few of the parts of the original Colonial business. But if I could come to CFS, yes, we have sold are in the process of Selling 55 percent of our interest in CFS. But this is because our view is that as a separate business and with Again, a well capitalized partner in KKR, one that's ready and willing to invest in the business as we are. But as a standalone business, the CFS will be able to perform better and have greater potential. So We intend to obviously retain 45 percent, sorry, interest in CFS in the near term, But it's all about making CFS a stronger business. Chairman, we've received question online from shareholders Sharif Khan and also Raziya Khan. The shareholders ask, it's completely unconscionable and unlawful conduct that CBA are not providing redundancies to those employees that wish to obtain them under the EA and Australian legislation Slations now that their jobs have been made redundant and are obsolete. Why would you continue to engage in this unlawful unconscionable behavior? Again, I'm concerned that you have that view but Redundancy provisions are part of the enterprise agreement. So all employees entitled to redundancy do receive that. Where there are opportunities for people to move into an equivalent role, That is not regarded as a redundancy. Chairman, we've received another question online from shareholder Rita Mazilevsky. In March 2021, CBA subsidiaries, Commonwealth Securities Limited and Australian Investment Exchange Limited, had proceedings against them by ASIC for errors described as information Technology System Coding or System Issues and Human Error and or Data Entry Errors. The consumer losses were noted through brokerage overcharging with $6,500,000 remediation paid to affected customers. How will CBA's investment against financial crimes including cybercrime address these serious issues to consumers and will CBA's investment against financial crimes cover and apply to all CBA subsidiaries? Thank you for that question. This is a really important area for CBA. As you know, we have Increased our investment in financial crime compliance systems and capabilities. So we're spending over $200,000,000 a year on this And we have nearly 3,000 people engaged in financial crime compliance. And I would say that some of those some of that capacity is provided by the CBA India subsidiary, because we needed that extra capacity and we couldn't get it in Australia. So all subsidiaries as appropriate are part of the designated business group, which comes under the AUSTRAC requirements under the AMLCTF Act with which we comply through our Part A and Part B programs. So it's an incredibly important area for us because it goes to the trust and reputation. And as we know from our experience in 2017, we never want to have that situation arise again. And the RAP program that we have implemented over the past 3 years. Part of that is obviously addressing all of those systems and data integrity issues that led to earlier problems. Chairman, we've received a question online from Paul Arthur Brand, shareholder. After trying from about 1 p. M. To 5 p. M. On the 30th September to lodge my buyback application online at final price minimum $86 I gave up. When I phoned Link Market Services that afternoon, I was told that the system was overloaded. The buyback facility should have been available to all shareholders, not just Those lucky enough to hit the submit button at the precise second to get through. Could I suggest that with future offers to all shareholders, CBA ensures that there is the capacity to handle such large offers. Yes, I'm very sorry that You had that experience and we'll certainly be following through with Link but I take your comment And yes, we will absolutely ensure that there is appropriate capability for any future offer. But again, Apologies for your experience. Chairman, another question received online from Georgina Rulis. As a fully vaccinated employee at CBA, I'd like to know whether you would support mandating vaccination for CBA employees. Well, thank you for that. This is obviously a very important question at the moment. At the moment, we're not requiring people to come back into the office. If they were to, they have to be fully vaccinated. But we are consulting with our employees at the moment, as to the arrangements that, will be in place once Employees come back to the office in larger numbers. But of course at all times we will be complying with the health advice. A second question from shareholder received online, Rita Mazilevskiy. Chairman, CBA states that their product AgriAdvantage and AgriAdvantage Plus are tailored for Australian farmers, graziers, fishermen and agriculturalists. As CBA put it, anyone who makes a living from the land or the sea. And the Agri Advantage package gives discounts, concessions and preferential rates on CBA products and services with less interest and fewer fees, which could save the agri borrower 1,000 of dollars each year. Would CBA provide a different product like a line of credit personal residential equity rate, a Viridian line of credit instead of an agri advantage package excuse me for agricultural lending. I might refer that question to the Chief Executive. No problem. Good morning Ms. Maslowvsky. Look, Typically, we would separate products for both agricultural, so lending to in this case farmers or just separate products to the Viridian line of credit Typically associated with a personal product. But I mean the agricultural sector has been a huge focus for us and I think we grew at about 12% over the last 12 months. We think it's incredibly important sector to support in the Australian economy and the broader community, and we'll continue to look at ways I think we might move to the phone now, because we have a number of people I think waiting online. So perhaps if I could ask the operator to put the first phone question through. The first question received via the telephone is from Julia Imrie. Please go ahead, Julia. Hello. Thanks for taking my question. My name is Julia Rimuru. Since 1975, my family I've lived on a rural property in the on the Golden River up Hunt Valley, New South Wales. I'm a science educator and hydrologist and have studied the impact of coal mining on water resources as part of my doctorate degree. And my husband and I operate a rural business on this land. Look, we witnessed to both Glencore and Yancoal's expanding mining footprint across this landscape, the dislocation and displacement of our local community, the losses of the villages of Ulaanawala and the ongoing degradation of the catchments water system. This includes the known outstanding feature known as the Dripping Gorge. Fresh groundwater and surface water runoff are crucial to river health and drought resilience. And at present, Glencore and Yankoal's Yulin and Malabon Mines currently intercept and extract over 25,000,000 liters per day of quality groundwater and surface water that Become contaminated by the mining process. The river is now regulated by mine operational priorities and mine water discharges. The mining company's own modeling predicts it will take well over 200 years for this water system to return to something like, but not the same as the pre mining levels. But that's not all. Both Glencore and Yangcor are planning significant Stan Commonwealth Bank is a financer of both Glencore and Yancoal, having loaned to both companies as recently as last year. My question is what actions have you taken to understand and alleviate the impacts these companies and their coal mines are having on our communities, especially on our water systems and catchment. Thank you. Thank you, Ms. Rimri. Again, if I I'll respond to this question, but I've asked if all climate related questions could be held over till Item 5A and then we can take them all in one go. I think I'm not going to comment on individual customers, But, I think we've made it clear in our expanded environmental and Social framework and our updated policy that we will not provide project finance to new or expanded thermal coal mines And we will reduce our existing project finance to thermal coal mines to 0 by 2,030. So we've set a very clear date by 2,030 to have exited from thermal coal. Operator, can I have the next phone question, please? Cameron, the next question received via the telephone for this item of business is from Sharon Holmes. Please go ahead, Sharon. Good morning. Can you hear me? Yes, we can. Good. It's just a bit of a strange feeling. My question relates to the management of financial risk in our agricultural portfolio. Page 28 of this year's annual report references the analysis that we conducted in 2019 on our agricultural portfolio. These analysis found that if climate change is left unmitigated, Then climate induced impacts such as heat stress and changes in rainfall could see declines in profitability across the grains, livestock and dairy sectors of 40% to 50%. I note that this is a question about reduction of financial risk in the agricultural portfolio. So don't be alarmed that I used At last year's meeting, the Commonwealth Bank was asked what changes it anticipates in the default rate of our agricultural loan book under this unmitigated climate scenario. This figure wasn't provided at the last year's AGM, And I can't actually find it in this year's reporting, even though the 2019 report stated, and I'll just quote from that, We were able to estimate how climate change could affect the credit risk metrics of our existing agribusiness customers. Page 28 of this year's report states that the bank has, quote, matched productivity data to locations of agricultural loan exposures and securities across Australia to manage and monitor our risks. So clearly, the bank is in a position to disclose the anticipated default rate. And so I would like to know what That is, and I assume other shareholders would be as well. Could you please Tell me what that is. Thank you very much, Sharon. So the references in the Annual report and to the scenario analysis that we did on our agri portfolio as part of our Environmental and Social Framework. That is to provide data and do the analysis across the portfolio. It's not looking at individual loans at any particular time. Now certainly we've taken that information and have worked directly with customers so that they can understand The productivity impacts that a changing climate environment might have on their property and help them to Consider alternative or changed land use practices. So the work we've done is really, as you say, it's risk Management, it's looking at the forward risk and the, as part of the physical and transition risks that Climate change will actually trigger, but it's looking across the whole portfolio about what could happen, not about what Is happening in terms of any default experience in the portfolio. That's a separate question. Chairman, the next Question received via the telephone for this item is business is from Jordan Wimbass. Please go ahead, Jordan. Thank you. Chairman, in July 2020, Commonwealth Bank participated in a $1,000,000,000 refinancing for Origin Energy. Origin's fracking project in the Northern Territory will destroy country, land, water and community. Traditional Owners and Aboriginal remote communities Have said no since the beginning. My question is, how has the board communicated to shareholders that they have facilitated the steamrolling of Aboriginal communities via their type to Origin Energy. I'm not going to again comment on any Individual customers or arrangements. But I would say in terms of our engagement with Indigenous customers, indigenous communities. We've actually had quite a long discussion at the board very recently on this and feel that we could do a better job in the way we provide our services to indigenous customers that we could be More centralized in bringing together the various programs that we do have and having a greater presence. So we Operator, can I have the next call, please? Chairman, the next Question received via the telephone for this item of business is from Julian Vincent. Please go ahead, Julian. Thank you. Good morning, Chair. My question goes to the annual report, Page 29, just referring to that. So Commonwealth Bank obviously has a commitment to play its part in limiting climate change in line with the goals of the Paris Agreement, and I'll emphasize this part, supporting the responsible global transition to net 0 emissions by 2,050. Now on Page 29 of the annual report, it describes sector level Glidepath to deal with exposure to 4 sectors, thermal coal mining, upstream oil, upstream gas and power generation. And the plan is to, just quote, glide path that are aligned with the IEA sustainable development scenario of 2020, which is a disjuncture between What the bank is committed to and what it's planning it targets around, which is that scenario aims for net njero by 2,070. This is in the context of the IEA publishing a scenario that describes what needs to happen and provides all the information that A bank or any other institution would need to set targets around the Netgear by 2,050. So two questions then from that. Why, when all the information is readily available, to set your guide paths in alignment with net 0 by 2,050, would you aim for something That is, in effect, 20 years or later than that. And the second question is, what is the likely impact financially on the company if We decided to expose ourselves to the sectors, which are clearly going to need to be phased down over time, aiming for an outcome that is A phase down 20 years later than what the world needs to aim for. Okay. Thank you, Mr. Vincent. And Can I say to shareholders that I really do want to take the climate questions altogether for under Item 5? So, if you do come through with another climate question, I think I'll have to ask you to defer that and ring back at that time. So this is the last climate question that I'll take under this item. Mr. Vincent, you Correctly identify that we have committed to the Paris Agreement and just so that shareholders And have some background, we've been trying to as part of our improvement in our environmental capability, Understand how we can use what are called glide paths, and apply them to certain sectors in our portfolio, certain sectors of lending And apply them to understand how we can come within the Paris targets of well below 2 degrees. Now we chose these IEA SDS 2020 glide paths. We had chosen them actually before the IEA came out with its most recent report. When I say we chose them, we've actually tried to apply the methodology, understand how the methodology works. What we have said is that we will take those glide paths which yes at the moment have a landing in 20.70. We will apply We'll look at them over the next 12 months and to the extent that there is better data that comes out and we expect the IEA will actually be releasing It's data methodology imminently, as I understand, that we will review those glide paths and, where necessary, update them. So in no sense does our prototyping those glide paths indicate that we resile from our Paris commitment And that we and we have publicly in our annual report said that we will actually review and reassess those glide paths over the next 12 months. I'd also note that our lending to fossil fuel to the fossil fuel sector It's fully disclosed in the energy value chain which is in our annual report and shareholders will note that in all of the various categories The lending has come down significantly compared with last year. And the overall lending To those customers, in terms of our total lending is less than 2% of the total. Can I have the next question, please? And again, if it's on climate, I'll ask you to defer it to that item. So, operator? Chairman, the next question received via the telephone for this item of business is from Christine Ann Cook. Please go ahead, Christine. Good morning and thank you. Look, I'm concerned that this will be interpreted as a climate question, but it actually relates to budget and how money is spent. Is that okay? Sounds good. Page 33 of our annual report states that we've Deployed $6,400,000,000 of our $15,000,000,000 low carbon funding target, which covers funding for renewable energy and a host of other sectors, Including Commercial Property and Waste Management, what proportion of the CHF6.4 billion deployed to date went to renewable energy? I think it was just under €5,000,000,000 €4,800,000,000 €4,900,000,000 of that went to renewable energy And the balance went to commercial properties which were seeking to get the accreditation under sustainability methodologies. Next question, operator, please. Chairman, the next question received via the telephone for this Item of business is from Frank Gaffa. Please go ahead, Frank. Hi, Chairman. This is a question about financing of project. The Aboriginal Areas Protection Authority, the body responsible for registering sacred sites, noted that the practice of Shower gas hydraulic fracturing could have significant impacts on sacred sites and thong lines arising from interference with either surface water or groundwater in the NT. Commonwealth Bank recently participated in a $1,000,000,000 refinancing for Origin Energy, one of the fracking corporations wanting to frac Aboriginal land in the NT. Considering this and the fallout from the destruction of Drukeng Gorge, how will Combank ensure Origin's projects have a comprehensive culture Cultural water mapping survey undertaken to better understand the cultural interconnection between groundwater and service water across And you need the origin permit areas in the NT? Thank you, Frank, for your question. And again, I'm not going to comment on any individual customer. But our ESG framework, our ESG assessment tool is applied to all lending. And that does include questions and investigation of the not just the environmental, but also the social aspect of any project. And so, the question you raised would come up as part of that assessment. Operator, could I have the next question? Chairman, the next question received via the telephone for this item Business is from Jack Dachulis. Please go ahead, Jack. Hi. I'm Jack Dachulis from Market Forces, and I'm a proxy holder at today's My question relates to climate risk, which is the key financial which is a core financial risk and is therefore Appropriate to ask at item 1. Commonwealth Bank's 2019 Environmental and Social Framework committed the bank to only providing banking and financing to new oil, gas or metallurgical coal projects, if supported by an assessment demonstrating those projects consistent with the goals of the Paris Agreement. This policy was updated in August 2021 and appears on Page 30 of the annual report. The new policy substantially narrows the scope of this commitment by only requiring an assessment demonstrating projects To be Paris aligned in circumstances where project finance is provided to extracted projects rather than most types of finance for all types of projects as covered under the previous policy. That's to say, The new policy opens the door to funding new fossil fuel projects through a broad suite of financial arrangements without needing to demonstrate Paris alignment, including via Corporate Finance. Recent examples of this include ComBank's loans to Santos and Siccar Point Energy for the Barossa Gas Project and the Kambo Oilfield, respectively. In light of the overwhelming evidence that there's no room The new fossil fuel project, if we're to achieve the Paris agreement and the IEA's conclusion that there's no room for new fossil fuel supply projects under a net 0 by 2,050 scenario, How does Combank justify watering down a policy that should act as a barrier to funding new fossil fuel projects? Thank you, Mr. Vitoles. Again, I don't agree with your characterization of what we've done in the update to our environmental What we have done is made sure that it's very clear what we will and won't do and that's As much for our own bankers as it is for external stakeholders. We have tried to be more transparent about what we're doing, which is why we've distinguished between project finance and corporate finance and trade finance. But I think we've made it clear that all lending is subject To assessment, using our ESG assessment tool and in our updated framework, we've made it clear about Our position in not funding new oil and gas unless it is aligned with the Paris agreement and after ESG Assessment. So again, I'd reinforce that we are committed to the position we've taken as supporting The Paris Agreement, which says that, we want to limit climate change to well under 2 degrees. But the point about our Updating of our policy was to make it much more transparent and clear and actually to reinforce our position on thermal coal And that we will exit by 2,030 and that's across project and corporate finance and trade finance. Operator, could I have the next call, please? Chairman, the next question received via the telephone for this item of business It's from Rydian Cowley. Please go ahead, Rydian. Good morning. Thank you. My name is Riddian Cowley. I'm an Australian Olympic race walker. I competed at the Tokyo Olympic Games just a few months ago. As you noted in your address, Commonwealth Bank has been a great supporter of sport in Australia from grassroots to elite level. And you're also proud of your involvement in Funding Australia's transition to a sustainable economy. However, as loaded by some of the previous questions, the Commonwealth Bank has been undermining some of its really good Community work in having loans and continuing the loan, building the volumes to the company's proposed to expand fossil fuel development. Sport, like everything else, including my own competition at the Tokyo game, are already being impacted by climate change. Having these loans on the balance sheet represents a material risk to the Commonwealth Bank Financials. And I think even though I note the goal of divesting by 2,030, I think Given the recent IEA report and the IPCC AR6 report showing that We can't build any new fossil fuel developments. It seems like Commonwealth Bank is sort of Saying one thing and doing another thing and kind of like undermining some of the good work in that respect. So, like how does the Board sort of justify that they're comfortable with the risk that those decisions put on the company. Thank you very much, Rodion. Again, Let's start with the point that we have actually significantly reduced our exposure to fossil fuels and that is that's laid out in our energy value chain. And we have a really positive objective, which we've updated for this year of By 2,030, having $70,000,000,000 in sustainability funding. So that's our overall ambition. We are philosophically, we are committed to supporting our customers as they make the transition over the next period so that we do end up with an environment which is Paris aligned. Again, I'm not going to comment on individual customers, but our ESG framework and our assessment tool is applied in all cases and it has been strengthened over the past year. But again, I'd reinforce the point that our overall lending to fossil fuels has decreased significantly. Operator, I think I'll take another couple of calls. I do want to get on to the other items of business. So if we have the remaining four calls In the phone queue, and then I'll take one the remaining call in the online questions. So, 5 more questions on this item. So operator, can I get the next call in the phone queue? Chairman, the next question received via the telephone for this item of business is from Simon Holmes, A. Court. Please go ahead, Simon. Thank you, and good morning. Chairman, as part of the update to the Environmental and Social framework. In August this year, the bank introduced a policy stating that we will expect existing fossil fuel clients to have published a time bound decarbonization plan consistent with the Paris Agreement. This has the potential to be positive, but for the fact that we only expect such a plan from 2025 onwards, Not to mention, it's only an expectation rather than a requirement, and there's no requirement for short, medium and long term targets. The other problem with giving clients like Santos and Origin Energy another 4 years to produce Paris aligned transition plans is they're pursuing large fossil fuel developments right now. The bank would be aware that the International Energy Agency recently reported that new fossil fuel projects are inconsistent with the Paris Agreement and net 0 by 2,050. By contrast, other banks are taking necessary action now. For example, major U. K. Banking group NatWest prohibits general corporate lending to major oil and gas producers unless they have a credible Paris aligned transition plan by the end of this year. It's been 6 years since the Paris Agreement was signed. Why is this Commonwealth Bank undermining its own Paris And net zero commitments are giving clients pursuing huge new fossil fuel developments another 4 year grace period. And I'd just note that the carbon intensity of the banks lending Represents a material risk to the financials of the company and is therefore entirely appropriate for consideration at item 1. Thank you. Thank you, Simon. Yes, you're correct in that our policy requires that from 2025 Those clients do have a transition plan in place. That is not to say that we are not working with those clients before then. So we do actually have an active program of engagement to understand the posture of clients in relation to Paris, This is of existing clients and also the status of their transition plan, the actions that they're taking now. So I can assure you that that is the case. We are not waiting for 2025 to have those conversations. The next question received via the telephone for this item of business is from Peter Starr. Please go ahead, Peter. Good morning, Catherine. How are you? I'm well. Thanks, Peter. Good to hear from you. Thank you. I'd just like to echo some things. There was a call earlier talked about vaccines. I can say that I'm fully vaccinated and I'm very grateful to David Todi, Chairman of the CSIRO Some very good advice about vaccines. Let me urge everybody. And I know we've got Carmel Mulhern in Melbourne and it's a terrible mess there, what we've been through. Let me urge everybody, Get vaccinated and let's move forward with our lives. Mr. Livingston, Catherine, you came to the Board middle of 2016. And the Board at the time under David Turner and that whole Board has now been replaced over period of time since you inherited the chairmanship. The Board that was there at the time was At best, sleep at the wheel inept prior to Royal Commission. I wrote to you in 2016 a number of things. I asked Ms. Morton, It was the company secretary to meet with me she did in March 2017. That meeting lasted 4.5 hours With Ms. Morton taking detailed notes and reporting back to you. I've listened to Matt Common talk about all the good things and it seems that I watched you go through the Royal Commission. I thought you were unfairly treated. I thought your predecessor should have been in the witness box, Mr. Turner, and I thought it being in the red should have been there. I think that given the mess that you're still cleaning up, which affects customers. We've got the bank now defending criminal charges. We've got federal court action over the common shore. We've got Canadian First State, even though we're selling that, the 20,000,000 fine and then there's the thing in relation Ms. Kara Nicholson, which was suddenly settled on the 5th October or sorry, settled on October 6, she resigned this a few days a week or so ago, on 5th effectively. And Peter, can you My question really is what are we doing to really fix The messes from the past, I know you never created these messes that the banks in, Catherine, and you've in trying to address and clean up the mess. But we've got the bank Now we're going to plead guilty to 3 criminal charges. Terrible. We've had the thing with the CompSeq. Yes. So I'd like you to just comment on those things because These are the things that affect not only me, but customers, shareholders. Thank you. Yes. Thank you. Thank you, Peter. I suppose I would go back to my comments In relation to the remedial action plan, so all of the work that we've done inside the bank and I can assure you it's involved Thousands and thousands of employees and the dedication that I referred to in my comments has been extraordinary on behalf of All of the on part of all of employees and I would go to Matt Common's leadership in all of that to make Sure that we actually delivered on that remedial action plan. Now the independent reviewer has said That the focus on customer outcomes that they observed as a result of the work that we've done Has been transformative within the bank. And as I mentioned, the cultural reform Has been the most comprehensive. This is the independent reviewer. The cultural reform has been the most comprehensive in recent Australian history. So if I can give you the assurance that not only have we attempted to fix all of the systems and the processes, But actually the mindset as it relates to customers and the way we behave inside the bank and externally with our customers Has gone through, well, what again the independent reviewer would say an unrecognizable organization now compared with what it was when we started. So that is on the work that we've done to make sure that we make the organization far more resilient, stronger and much better performing in terms of its processes. As to the legal matters that you raise, I'm not going to comment on them individually, But I would highlight that they stem from the past. Prior to all of this work that's been done, They have taken time to come through after referral from through the Royal Commission process and through ASIC. They have taken time to come through and now come to The final court proceedings and agreement with the court. So I just assure you that they are not of the way the bank is operating today. And we have and are remediating any customers who've been affected by any of those issues, But they do all relate to a prior time. That is not the Commonwealth Bank of today. Thank you, operator. And I have the final question in the telephone queue. Chairman, the final question You'll receive via the telephone for this item of business is from Sharon Holmes. Please go ahead, Sharon. This goes back to my previous question. Just to start with, I'm a solicitor in a small rural town in South Australia. And so the agricultural loan bank portfolio, any risk in that is something that I kind of noticed in my community, I suppose. Clearly, the bank is in a position to disclose the anticipated default rate of our Agricultural Loan Bank portfolio under various risk scenarios. Why hasn't the de identified data as far as I know, the de identified data that's been mapped under various climate Risk scenarios has not yet been disclosed. What is the anticipated default rate? The bank must have worked it out if it's mapped. And what and when can you disclose this? Because as an investor in the bank, we need to know if our money is safe and what the risk disclosures. It's about investors like me knowing how secure our capital is. Can you please tell us what the default rate in the agricultural sector is going to be And as a result of various climate change risk scenarios. And when will you be able to disclose that given that you've already done the mapping. All right. So Sharon, thank you for your repeat question. I'll Give one perspective and then I'll ask, our Chief Executive to respond. In terms of, security of your investment in the bank to, Potential default, again, I would point to our provision for loan losses. And we have I think of all the banks have the highest level of provision on our portfolio and a very Rigorous exercise is conducted across the retail, the business bank, which includes the agricultural portfolio And the institutional bank to make sure that we are adequately provided and that provision does have a forward looking perspective as we're required to under AASB 9. And that provision is audited. And the auditing of that is just incredible. It's So extensive. So I can assure you that the bank is more than adequately provided for any of It's expectations in relation to defaults. But perhaps I'll go to Matt on the agri portfolio specifically. Thank you, Catherine. I mean, just a couple of things to add. As I said earlier, certainly the agricultural sector is of critical importance to us, the country, Into the Economy. So it's an area we spend a lot of time on analyzing both the opportunities and risks. As your question is predominantly around the risks, Yes, we've done a lot of extensive mapping work to understand exactly where our security or where we have loans to customers around the country. We've continued to push that forward into multiple different time horizons under lots of different assumptions. I think most critically, as Catherine said, If there's any area where we reasonably anticipate that we will experience any losses, we accommodate that as part of our Credit provisioning, so you should not be concerned beyond that. As it goes to, would we be disclosing individual default rates Across every assumption that we make, I think that's highly unlikely. But you can rest assured that we do a lot of stress testing work that we do Both in conjunction with the Board and with our prudential regulator, one of our critical roles clearly is to manage risk over the long term. And it's an area agriculture and other areas of our business. We will continue to do a lot of work as we met a variety of different scenarios well into the future. Thanks, Matt. I think there are no more phone questions in the queue. So Helen, can we return to the online questions? Chairman, we've received an online question from shareholder Neil Woods. Can the Chairman update shareholders of any regulator engagement with CBA at this time? There's constant regulator engagement And that is if we go back to the Royal Commission that was one of the recommendations from the Royal Commission that We and other banks, but we improve the way we engage with regulators. So we are constantly engaged with APRA as our main banking regulator, obviously with ASIC and with Africa, with AUSTRAC and the ACCC as necessary. So and the BCCC, We have as part of the board program, at every meeting, the board meets with the board of A particular regulator so that by the end of the year, we've met with all regulators as a board. And then of course the Board is regularly at every meeting updated by the CRO, Chief Risk Officer and Chief Compliance Officer As to all of the various engagements with regulators, but they're enormous. We have very Significant regulatory change program underway at the moment. We have from the beginning of October new regulations in relation to Product Design and Distribution, that's from ASIC. Also from ASIC RG271, which relates to our complaint handling process. We have new breach reporting regulations that have come in. So we're very actively engaged with ASIC on Introducing those new regulations. And I would say with APRA, obviously, we have a constant engagement, but very particularly at the moment, working with APPRO and across the sector on their climate vulnerability assessment stress test that they're undertaking. But I would say that we work with all regulators very constructively and have very good relationships and relationships which allow us to discuss Regulatory environments into the future as the sector changes. So it's a very constructive conversation. I can confirm there are no further questions online for this item. Thank you. Thank you, Helen. Thank you, shareholders. So there are no questions online and there are no questions on the phone for this item. So I will now move to the next item of business. So Item 2 relates to my reelection and that of Anne Templeman Jones and the election of Peter Hama and Julie Galbo. As I'm abstaining from item 2a in relation to my own reelection, I'll ask Rob Whitfield to chair the meeting for this item. Thank you, Catherine, and good morning, shareholders. The Board considers that all directors standing for reelection or election are independent. Catherine, Anne, Peter and Julie will briefly address the meeting regarding their candidacy. Item 2A is for the reelection of Catherine Livingston, AO, who, in accordance with the bank's constitution, retires as a director and offers herself for reelection. Catherine has been a Director since the 1st March 2016. She has made an outstanding contribution to the Board since her appointment, including as Chairman of the Board and of the nominations committee since the 1st January 2017. The Board, with the exception of Catherine in relation to her own reelection, recommends the reelection of Catherine Livingston AO as a Director. I'll now invite Katherine to address the meeting. Shareholders, the details of my experience across both my executive and director Career, including the previous chair roles I've held, are detailed in the notice of meeting. As Rob said, I've been on the CBA Board since 2016 and as Chairman have sought to ensure that we have strong and diverse skills on the board and that the board and management have a constructive relationship, one which enables us to work as a team to address the operational and strategic challenges faced by the bank. If reelected today, I would be honored to continue to lead the board and contribute to the ongoing focus on successfully meeting those challenges. Thank you, Catherine. I now invite shareholders and proxy holders I'll now move to the first question online. Mr. Whitfield, the first question received online for this item of business is from shareholder Stephen Main. The question is, when the Chair retired from the Board of competitor Macquarie Group in 2013. She owned 12,000 shares, which would be worth $2,200,000 if retained today. I also understand that she owns more than $1,000,000 worth of shares in Afterpay, a major disruptor and competitor in the global payment system. The annual report discloses that the Chair's CBA shareholding fell from 10,935 shares to 8,537 shares over the course of the year, a stake worth $895,444 based on last night's closing price of $104.89 This holding is only worth fractionally more than the $880,000 in cash Chair was paid in 2020, 2021. Does the Chair still have bigger investments in Afterpay and Macquarie than in CBA. Why did she reduce her holding during the year and what's her general approach to holding shares in CBA's competitors? Good morning. It's Dermain, and thank you for your question. Clearly, I don't intend to comment on Catherine's personal investments. However, I'd make a couple of points. CBA does have minimum shareholding requirements for directors and for group executives, and in fact, specific requirements for the Chair and our CEO. I'd also like to point out to your last part of your question that to the best of my knowledge, there is no formal policy regarding personal investments in competitors, be they historical in nature or otherwise. Thank you. Helen, next question online, please. Mr. Whitfield, I can confirm that at this stage for this item, there are no further questions online. Thank you. Do we have any questions received via the telephone? Mr. Whitfield, the first question received via the telephone is from Peter Starr. Please go ahead, Peter. Thank you. I will be Tendering all my votes in support of Ms. Livingston. Yes, Nadeau. At yesterday's meeting at Telstra, I think John Milton stepped down. I made mention of the 2 years that you were there and the outstanding job you did. Since coming to CBA, The whole board that was here under David Turner, the most inept incompetent board ever in the history of Australian Banking has gone. It's sad that it took The courage of Ms. Livingston to first to accept the role then to be publicly humiliated at the Royal Commission And to still be cleaning up messes is to her credit. Philip, the people I represented myself personally, Ms. Livingston, I have no issue in what shares or what things you hold. I look to your integrity and I look to how You have changed and are still changing the culture of the bank That had a culture of not caring, blind, inept, Ben, it was terrible. There is still work to do and needs to be done In order for all those words that Mr. Common speaks about to be true. So I'll say this that yes, I will be voting. You have my absolute support and the people I represent. I wish you continued good health. And I'd like to say this to other shareholders. You think about what this Livingston has done since coming to the bank to clean out the whole board, ask David Turner to return A percentage of his bonus, which he should have done. You're an absolute disgrace, Mr. Turner, And I hope you're listening. Well done, Catherine. Thank you, Mr. Starr for those comments. Operator, are there any more questions online for this item? Mr. Whitfield, the next question received via the telephone for this item of business is from Craig Edward Caulfield. Please go ahead, Craig. Good morning and good morning, Ms. Livingston. Just a brief preamble is I was registered for number 1 question. And you said there were no more questions and I was in the queue. I jumped to the online support team. I used the chatbot. I spoke to the people there and they said just please keep waiting. And then I heard no more questions, so I've reregistered here. My question is fairly brief. The promontory investigations and remaining $500,000,000 Capital penalty came about from serious cultural accountability and governance failures that APRA had identified in CBA. Former Group Company Secretary, Cara Nichols recently highlighted failures in governance also inside CBA. Now this was post all of the 12 commentary reports. The Royal Commission identified cases where proper farm debt mediation failed to occur. In our bank warrior network, farmers today Continue to be denied farm debt mediation. Why? If courage, care and commitment you speak highly of is to be demonstrated, Why would long standing and serious cases continue to be unlawfully and unconscionably refused a fair, equitable and thorough mediation? Thank you. Thank you, Mr. Dimasco. Appreciate your question. As it's been noted by many times, CBA has apologized for many of the misgivings of our past. The work Catherine has led and Matt has run with in terms of our remedial action plan Has been a very significant commitment from the organization, and the promontory reports that you refer to are the best indication of an independent expert providing their expert judgment on the progress that is evident and we have made, the most recent report which was published yesterday. However, as both Catherine and Matt have noted, we absolutely have much more work to do in this regard and certainly are by no means perfect. Thank you. Are there any more questions online, operator? Mr. Whitfield, I Thank you. Helen, are there any more questions online for this item? Mr. Whitfield, I confirm there are no further questions for this item online. Thank you. I now put the resolution to the meeting for you to cast your vote. Displayed on your screen are details of the direct and proxy votes received prior to the meeting for this resolution. For those of you on the phone, the slide confirms we have received 98.14% of votes for the resolution And 1.05 percent of votes against the resolution. Congratulations, Catherine. I'll now hand the meeting back to the Chairman to move to item 2B. Thank you, Rob, and thank you shareholders for your support. I might just clarify the points made by Stephen Main. I do not hold shares in Afterpay. And in relation to the apparent disposal of Commonwealth Bank shares during the year that actually related to shares that I held as executive for an estate which I then distributed to the beneficiaries of the estate. So there was no benefit to me in the disposal of those shares. Item 2B is for the reelection of Anne Templeman Jones who in accordance with the bank's Constitution retires as a director and offers herself for reelection. Anne has been a director since the 5th March 2018 And she's made an important contribution to the board since her appointment, including the very important role of Chairman of the Audit Committee since 2018. The board, with the exception of Anne in relation to her own reelection, recommends the election of Ms. Anne Templeman Jones as a director. I now invite Anne to address the meeting. Thank you, Chairman. Ladies and gentlemen, My appointment as a non executive director to the CBA Board was announced on the 5th February 2018. I was elected by our shareholders at the 2018 AGM. I'm the current Chair of the Audit Committee and a member of the Risk and Compliance Committee and seek your for my reelection as a Director of the CBA Board for a further term. I'm an experienced ASX listed company director and previously was a dedicated career banker with over 30 years' leadership experience in operational roles across the business and corporate banking, Finance and Risk. The majority of which was at Westpac Banking Corporation in various senior leadership roles, where I developed my deep knowledge and understanding of customer relationships, both financial and non financial risk management and governance. I'm a member of the Australia New Zealand Institute of Chartered Accountants and as Chair of CBA's Audit Committee, I have led the committee to strengthen the bank's internal control framework and monitor its effectiveness and to work closely with the risk Compliance and People and Remuneration Committees to ensure we deliver a robust and holistic oversight of risk and governance. In my roles as CBA Director, I have contributed insights that I have been drawing from my full width and depth of my professional lens. This combination equips me well to contribute to the future success of CBA. As a professional non executive director, I have the capacity and the time for all of my commitments and continue to have the support of my chair and my CBA colleagues. As a Director and Chair of the Audit Committee, should you support my reelection, I look forward to continuing to serve you as a Director of CBA. Thank you. Thank you, Anne. I now invite shareholders and proxy holders who wish to ask I will now move to the first question online. Chairman, the first question received online for this Item of business is from shareholder, Stephen Main. The question is, since replacing Marcus Blackmoor as Chairman of Blackmoor's 12 months ago, I understand Ann that Ann Templeman Jones has not had a meeting with her predecessor, the founder of the company who still owns 19% and whose name is on the door. Marcus Blackmoor is now threatening to vote against Anne's reelection as Blackmoor's Chair at the AGM 2 weeks from now. Stakeholder management is a core skill for public company directors. So could Anne please explain her approach to dealing with big and small shareholders, including why she apparently froze out the biggest shareholder in Blackmoors. Thank you, Ms. Demaine, but This is not the appropriate forum to comment on any other company. Are there any other questions in the online queue? Chairman, I confirm at this stage there are no further questions online for this item. And operator, can I confirm that there are no questions in the telephone queue? Chairman, I confirm there are no questions received by the telephone for this item of business. Thank you. So thank you for that. And I now put the resolution to the meeting for you to cast your vote. Displayed on your screen Our details of the direct and proxy votes received prior to the meeting for this resolution. For those of you on the phone, the slide confirms that we have received 97.5 9% of votes for the resolution and 1.6% of votes against the resolution. I will now move to the next item. Item 2C is for the election of Mr. Peter Hamer, who in accordance with the bank's constitution retires as a director and offers himself for election. Peter was appointed to the board with effect from the 1st March 2021. Peter brings to the board significant experience in customer service within the insurance segment and financial services and a deep understanding of environmental, social and governance principles. The board with the exception of Peter in relation to his own election recommends the election of Mr. Peter Hamer as a Director. I now invite Peter to address the meeting. Thank you, Chairman. Ladies and gentlemen, a vibrant, successful and truly world class financial services sector is critical to the future health and prosperity of Australia and New Zealand. There is no company better placed to lead us there than your company, The Commonwealth Bank of Australia. Personally, I can think of no more important contribution I can make than to serve our customers, our people, our shareholders and our communities through playing an active role as a member of your Board. That's why I'm honored to put myself forward for election to the Board of CBA. I have over 25 years' experience domestically and globally as a CEO, leading insurance brokerages and most recently, IAG, Australia's largest listed insurance company. Over these years, my focus has been on building purpose led businesses and harnessing this in designing and executing transformational change to drive increasing enterprise value. As such, I believe I've gained considerable experience in areas such as leadership and culture, in creating new and valued customer experiences, in digital and technology transformation and in understanding the risks to businesses and communities posed by climate change and how best to manage and prepare for these. With your support, I'm looking forward to bringing these perspectives to the Board table to support management and staff as they continue to search for ways to improve the financial well-being of our customers and our communities. Thank you. Thank you, Peter. I now invite shareholders and proxy holders who wish to ask a question on this item to do so now either I will now move to the first question, Question online. Chairman, the first question online is received from Stephen Main. Peter Harma only owns 948 CBA Shares worth less than $100,000 yet will be paid around $300,000 a year in cash as a director. When do the windows open up for directorshare purchases? And could Peter please outline his intentions in terms of the size of the CBA Shareholding that he's intending to build. Thank you, Mr. Main. As you know, as you've correctly pointed out, Directors are only permitted to trade in trading windows. And I can confirm that all directors including Peter Fully aware of the mandatory shareholding requirement, which is 100% of their directors' fees And the timeframe within which they need to accumulate that holding. Are there any further questions online? No further questions online, Chairman. Thank you, Helen. So I'll go to the telephone operator. Any questions on the phone? Chairman, the first question received via the telephone is from Peter Skaar. Please go ahead, Peter. Thank you. I listened to Peter speak about customer service when he was at IGA and talking about being focused on the customer and customer Outcomes and things. Well, Peter, I certainly hope that's the case. I wish you well And I certainly will be holding you to that. Okay. Thank you, Mr. Starr. Operator, can I confirm that there are no more questions in the telephone queue? Chairman, I confirm there are no further And Helen, any further online questions? I confirm, Chairman, there are no further online Thank you. I now put the resolution to the meeting for you to cast your vote. Displayed on your screen are details of the direct and proxy votes received prior to the meeting for this resolution. And for those of you on the phone, the Slide confirms that we have received 98.73 percent of votes for the resolution and 0.45% votes against the resolution. I will now move to the next item. Item 2 d is for the election of Ms. Julie Galbo who in accordance with the bank's constitution retires as a director and office herself for election. Julie was appointed to the board with effect from 1 September 2021. Julie brings to the board over 20 years' experience in financial services, risk management and compliance and change management. The board, with the exception of Julie in relation to her own election, recommends the election of Ms. Julie Galbo as a director. Julie is based in Denmark and is joining us via videoconference today. I now invite Julie to address the meeting. Thank you, Chairman, ladies and gentlemen. The integrity of the financial system is more important than ever. Financial institutions should be well functioning and trustworthy in order to play their role in society facilitating payments and providing credit in order to support the needs of the economy. Banks play an incredibly important role providing a safe, stable and resilient infrastructure for Financial Services within a strong transparent well regulated framework. In CBA's case, The bank plays a leadership role in Australia's economic growth and prosperity, underpinned by its funding for investment in credit to customers to run businesses, buy homes and plan their futures. For that reason, I'm very honored to put myself forward for election to the CBA Board. Given your support, I'll commit to bringing to the CBA book table the best of my experience gained as a former regulator and for Visa in Denmark and the EU as well as my experience as part of Executive Management and as a Non Executive Director at Nordea Bank, Nordea Asset Management and DNB Bank. I've led major transformations across the areas of culture, Governance, risk and compliance and continue to be involved in the development of strategy regarding sustainability as well as other strategic issues in Banking and Insurance. I have a background in law and an interest in Software that I nurture as Chairman of the Board of Trifork AGI, a Swiss next generation IT company. I aim to leverage that knowledge And experience to offer CBA valuable perspectives on technology, on payments, sustainability, Risk and Crisis Management and a Global Perspective on Banking. In an increasingly volatile, uncertain, complex across all products and services. I'm hoping to become part of creating an even better bank for Australia and New Zealand. Thank you. Thank you, Julie. I now invite shareholders and proxy holders who wish to ask a question on this item to do so now, I will now move to the first question. Helen, do we have questions online? Chairman, we do have a question online received before the meeting from the Australian Shareholders Association. The ASA has asked. With regard to the election Ms. Julie Galbo. While she appears to have impressive European banking experience, her residency in Denmark suggests that she may have limited knowledge of the Australian banking market and due to travel restrictions may have limited opportunities to engage with executive and operational staff as well as with customers. How will Ms. Galbo address these matters? Well, thank you to the ASA for that question. I will go to the 2nd part first in terms of Julie's commitment to actually come to Australia to attend meetings. I would say Julie has already offered to come and was prepared to go through 2 weeks quarantine to attend the meeting. Unfortunately, with International travel restrictions and border closures that wasn't possible. So I have absolutely no question in my mind as to Julie's commitment to actually come to Australia and work with us on the board and our team in a direct personal situation. As to the first part of your question, we very specifically and I think I've mentioned this earlier in the meeting, we very specifically sought someone From the Nordic area, because of the similar characteristics between the banking in the Nordic countries and in Australia. And even more specifically because of the degree of innovation that we have seen coming out of the Nordic banking environment. We also, again as I mentioned when I spoke about diversity on the board, we are very keen to have perspectives from Other Financial Services Sectors in Other Countries. As I said, although we are a domestic bank, financial services is becoming increasingly global and it's important that we understand the dynamics outside of Australia. So we're absolutely delighted that Julie agreed to join the Board. Chairman, a further question online regarding 2 d received from shareholder Stephen Main. There are actually 4 questions proposed. Would you like me to read just the first two? Well, I think we've said just one Question at a time from any shareholders. So just the first question. Could Julie please outline how much time she spent in during her largely Denmark based career. I think, Ms. Demaine, I've indicated why actually what we're looking for is her experience in Denmark and in the Nordic countries in particular. But certainly as working with the Financial Services Authority in Denmark, the regulator, Julie would have experience of regulation not just in Denmark, but across Europe and that obviously the European legislation and regulation reflects into Australia. So there are global experience dimensions which apply to Australia. And we have a large number of people on the board who are actually very familiar with the Australian context. So we are looking actually for diversity of perspectives and someone who can look at the Australian situation and circumstances in the sector with fresh eyes. Chairman, a second question from Stephen Main is, what was the process in terms of Julie Galbo's selection to be a Director of Australia's Biggest Bank and what committees is she proposing to join? Thank you again, Mr. Main. So we Go through a rigorous process. In fact, Julie was identified through a formal search process where we were seeking To have a number of candidates that we could review and having identified candidates, we then go through an interview process And all Board Directors interview the candidate and the candidate meets all Board Directors. Because as a director, obviously, you want to be very All about the people you might be working with around the board table. Then there is all the fit and proper work that's done as part of the APRA approval And we also do our own reference checking. So it's a very thorough process. In terms of committees, It's too early. I prefer to have directors sitting on the board and not having committee responsibilities for about the 1st 6 months. And Then we can understand where the best use of their capabilities matches the needs that we have on individual committees. Chairman, I confirm there are no further questions online for this item. Thank you, Helen. Can I go to the telephone operator? Chairman, the first question received by the telephone is from Peter Starr. Please go ahead, Peter. Thank you. Well said in your last remarks in relation to Julia. I think, Julia, I listened very carefully to what you said about Customer focus, I mean, this is a big thing with the bank. I think that you're a good selection, and I think you certainly bring diversity to the bank. I think, Mr. Livingston, I think you've made a good choice. You'll have my support. And I'll certainly be holding you, Julia, to customer outcomes. Thank you very much, Mr. Starr. So can I confirm that there are no further questions in the telephone queue? Chairman, I confirm there are no further questions received via the telephone for this item of business. And Helen, can I confirm that there are no further questions online? There are no further questions online, Chairman. Thank you. So I now put the resolution to the meeting for you to cast your vote. Displayed on your screen are details of the direct and proxy votes received prior to the meeting for this resolution. And for those of you on the phone, the slide confirms that we have received 99.02% of votes for the resolution And 0.17% of votes against the resolution. I will now move to the next item. Item 3 is a resolution for the adoption of the bank's remuneration report for the financial year ended 30 June 2021. The remuneration report is included in the bank's 2021 annual report, which is available under the related documents button on your screen for those attending online or on our website. The 2021 financial year has continued to be unpredictable and challenging for the bank with uncertainty both in terms of the pandemic and the economy. The bank has nonetheless performed strongly for our shareholders, maintaining our unquestionably strong capital position, adapting to new ways of working, embedding our cultural and risk transformation and importantly, continuing to focus on supporting Australia's recovery. During 2020, the Board reviewed the executive remuneration framework to ensure that it supports attracting and retaining exceptional talent and that it meets the spirit of anticipated regulatory change, aligns with shareholder interests and is fit for purpose for the years ahead. The review also sought to respond to the anticipated requirements of the new APRA prudential inquiry standard on remuneration CPS-five eleven. As outlined at the 2020 AGM, the review resulted in the revised executive remuneration framework implemented from the 2021 financial year and included the following key changes. An overall reduction in the maximum remuneration of up to 19 Send for the CEO and members of the executive leadership team. A reduction of the variable remuneration maximum opportunities with the short term variable remuneration opportunity reduced from 150% to 94% of fixed remuneration And the long term variable remuneration opportunity reduced from 180% to 140% of fixed remuneration. It also included the introduction of long term alignment remuneration or LTAR, delivered as restricted share units and subject to a pre grant assessment and a deferral of 4 5 years for the CEO. And for the long term variable or LTVR component. Performance is now assessed entirely on relative total shareholder returns across 2 equally weighted peer groups That is the general ASX 20 peer group and a new financial services peer group rewarding only for superior long term shareholder value. Further, long term remuneration vesting time lines have been extended from 4 years to up to 7 years, Better reflecting performance and risk time horizons. And finally, an enhanced malice and clawback policy has been implemented applying to all variable remuneration for CEO and executives in line with changes under APRA's regulatory standard, CPS-five eleven. This year's remuneration outcomes are the first under our new executive remuneration framework. The board believes that the 2021 framework and the outcomes achieved under it support and reflect positive customer outcomes and sustainable balanced returns for our shareholders. As Australia continues to navigate the crisis directly impacting our people, Customers and Communities. The bank has performed strongly for shareholders through prudent management, leading to resilient balance sheet settings and strengthening of its capital position. Individual executive remuneration outcomes reflect strong performance against both financial and non financial performance measures, including delivery of significant cultural and risk transformation. All individual remuneration outcomes were first subject to a risk and values assessment. The CEO's short term variable remuneration outcome for the 2021 financial year reflects the board's sorry the bank's Strong financial and non financial performance with his final STVR outcome at 87% of maximum opportunity. The board did not apply any further discretionary adjustment to the CEO's remuneration outcome. The average short term variable remuneration outcome for those executives considered to be key management personnel was 85% of maximum opportunity. The board has applied in year downward risk adjustments to short term variable remuneration outcomes for 1 of the 10 executives considered to be key management personnel. The 2018 LTVR award reached the end of 4 year performance period on the 30th June 2021 with 87.5 percent of the award vesting as a result of the performance against LTVR measures. This vesting outcome recognizes strong shareholder returns relative to comparative peer organizations and strong progress in rebuilding CBA's reputation and trust. The positive total shareholder return gateway was met for non financial performance measures with absolute TSR outcome at 51.85 percent for the 4 year performance period. I invite Shareholders and proxy holders who wish to ask a question on this item to do so now either by submitting your question online or pressing star 1 on your keypad I will now move to the first question. I'll take a question from the online queue. Chairman, we have two comments and a question from the Australian Shareholders Association on this item. The ASA notes the significant leadership and cultural change achieved by the CEO and his executive team over recent years and particularly over the last 18 months with the impacts of COVID-nineteen on operations and the role that the bank has played in supporting the Australian economy and jobs. The ASA notes the significant changes to the remuneration framework and the overall reduction in maximum achievable remuneration in line with guidance from APRA. Can the Chairman confirm that the long term alignment remuneration LTAR award will continue to be subject to rigorous board assessment and will not simply become deferred pay. Thank you to the ASA. And yes, this is One of the major changes that we have to our remuneration framework and that's the introduction of the LTAR component, which is restricted share units awarded to executives, but remain they ran in a holding lock. And for the CEO, in particular, are not available until 4 5 years after they've been awarded. And the reason for that is to make sure that the executive CEO and executives actually experience the same equity risk if you like as Shareholders do over that longer term period and therefore that they have a view to the longer term Performance of the bank and not only to the short term. Now in relation to the awarding of those LTAI units, The bank conducts a pre ground assessment and the board, obviously, the board on behalf of the bank. That pre ground assessment Looks back to the performance of the individual on 2 key areas on their performance in relation to strategy and leadership. And it looks back to confirm that the individual has demonstrated the performance, the capability and the potential to deliver for the bank over the longer term, which is the period on which the LTAR rights are on foot. That assessment is rigorously done person by person and actually requires quite a different conversation by the Board As it looks retrospectively at performance in terms of making views, making decisions about future performance. So rather than waiting To the end of future performance and deciding on whether it was adequate or not, it's actually forming your view on performance before the performance period. So I can give you the assurance that that is a very rigorous process. Chairman, we have another online question received from the Australian Shareholders Association. Given the significant wage restraint that's been a feature in the Australian workplace for some years, Can the 8.7% increase in the CEO's fixed remuneration be seen simply as catch up pay? And does this mean that any future increases in fixed remuneration will be more modest? Again, thank you to the ASA. The increase in the CEO's remuneration and I note that there had been no Review of that remuneration since Matt's appointment in 2018 other than a small adjustment as part of the overall reduction In maximum opportunity of remuneration which we did bringing in the new system. Apart from that there had been no change to MAT's remuneration. And when we did market reference testing, we formed the view that Matt had fallen behind in the market, compared with his peers and that an increase in remuneration was appropriate. Again, this is a one off and it relates to referencing to market to make sure that we're reflecting not just the market but the scope and scale of Matt's role as CEO of the largest bank in Australia. Chairman, we have a question that was received prior to the meeting. The shareholder asks, According to media reports, CEO remuneration has increased 33.33% whilst the shareholder return was 17.4%. How can this be supported in light of the Royal Commission penalties worn by the shareholder? We don't have a question regarding the fixed remuneration component, but fail to see where any support can be given to bonuses that take the increase above 17.4 percent. Thank you for that question. I don't recognize the 17.4% as a return to shareholders for the year. Actually, as I've noted, the total shareholder return for the year It was 48%. If I then go to the increase in the MAT's remuneration overall, If you look at the components of that, actually the increase comes from The deferred equity and if we go back to the prior year, the deferred equity elements of last year's remuneration was relatively small because that reflected the decision that Matt took on his own that he would not have A bonus or STVR award in for the 2018 year. That award would have been deferred and would have vested last year, but obviously there was nothing to vest. Also last year was the vesting of the FY 'seventeen LTVR award, And that vested at 24%, so again, at a lower level. This year, the FY 'eighteen LTVR has vested at 87.5 percent. And obviously, because of subsequent STVR awards, There are STVR Equity Awards, which have vested in the current year. So the significant increase in remuneration All relates to the vesting of deferred equity awards and again includes the fact that Matt went in 2018 chose to forego an ESTVR award. Chairman, I confirm there are no further questions online about this item. Thank you, Helen. Can I go to the telephone operator? Do we have questions on the phone? Chairman, the first Question received by the telephone is from Peter Starr. Please go ahead, Peter. Thank you. Catherine, Mr. Common, in relation to These awards and bonuses that you're going to receive, I think one of the most important things in this area is Outcome for customers that were affected by the bank, And you've been there under the previous CEO. And in relation to A call before where they talked about the penalties that the shareholders suffered on the money laundering things 700,000,000, still the common shore And the insurance that was sold to people that shouldn't have been sold, yet we were able to pay out Annabelle Spring 4,000,000 to go. My issue with all of this is that, for you, Mr. Common, These things should be tied. I have no problem paying you the money, but it should be tied to the affected customers' outcomes from the past Because you were there. And for me personally, the jury is out on you. I want to meet you And I look forward to meeting you. But I certainly have faith in the Chairman of the Bank, absolute Confidence. I want to believe that you when you speak about Fixing up things from the past with the customers and things that you're going to do it, not just talk the talk For the sake of talking. I really hope that is the case. I'll be voting for you to get the catch up, But I want those comments to reflect and I hope you really listen and take them on board, Matt. Thank you, Catherine. Thank you, Mr. Starr. So can I make probably three points? One just to clarify that in terms of remuneration consequences for the issues of the past, Matt along with other senior executives received 0 short term variable remuneration in 2017. And as I've mentioned, Matt chose not to receive any short term variable remuneration in 2018 in recognition of those issues of the past. And as I just mentioned, the FY 'seventeen long term variable remuneration award was at The low 24% and that was as a consequence of the impact on our results of, Among other things, the AUSTRAC issue. So there has been significant remuneration consequences for Matt along with other senior executives. The next point I'd make is just to give you reassurance and confidence. But actually, it's Matt who has led The organization in delivering the remedial action plan, I know of no one in the organization who is more concerned about customer outcomes And Matt and to the extent that the Promontory Report refers to a transformation in our approach to customer outcomes that is from Matt's leadership. So that is really for the board that is the most important point. Going to the Board, we have significantly strengthened our remuneration framework and our remuneration processes, including consequences. So if you see from our remuneration report, we actually highlight where we have made decisions to make reductions in people's remuneration for poor risk outcomes. And that is done for senior executives that Person by person, we review those outcomes and make that determination. So the link between remuneration and outcomes for customers And for shareholders is now very well established. So just to give you that reassurance, but I would come back to Matt's leadership of the bank And it has been extraordinary what's been delivered over the last few years. And I don't think that there were many people who had An expectation that we would deliver the wrap and the fact that we have, notwithstanding we have a lot of work to do, The fact that we have is because it was led by Matt. So can I just check with the telephone operator, are there any more questions in the queue? Chairman, the next question received By the telephone for this item of business is a follow-up from Peter Starr. Please go ahead, Peter. Thank you. I listen very closely and attentive to what you said there, Catherine. And on the value, I accept that. But I still come back, Matt. I look forward to meeting you. I look forward to speaking with you. I look forward to really putting you to that test. As I said, I accept everything that Ms. Livingston has said. It's just a sad reflection Under the leadership of David Turner and the mess that we're still cleaning up is just absolute disgust. My wife and I are dragged into actions with insurance by the federal court because of the bank. As I said, I accept what you're saying, Mr. Livingston. Really, man, I hope you can not just talk the talk, That really brought the walk. I hope so, Matt. I hope so. Thank you, Catherine. Thank you. Thank you, Mr. Starr. Can I confirm that there are no further questions in the telephone queue? Kevin, I confirm there are no further questions received by And Helen on the online queue. Chairman, I can confirm there are no further questions online for this item. Thank you. So I'll now put the resolution to the meeting for you to cast your vote. Displayed on your screen are details of Direct and proxy votes received prior to the meeting for this resolution. And for those of you on the phone, the slide confirms that we have Received 94.39 percent of votes for the resolution and 4.8% of votes against the resolution. I would now like to provide an update on attendance. We currently have 817 people attending the meeting. I'll now move to the next item. Item 4 is a resolution for the grant of securities to the CEO, Matt Common. The grant of securities in respect of the long term alignment remuneration award and the long term variable remuneration award to the CEO And this reflects the element of the CEO's remuneration that supports a focus on long term performance and provides long term shareholder alignment. The grants will be in the form of restricted share units for the long term alignment remuneration or LTA R and performance rights for the long term variable remuneration or LTVR. So shareholder approval is sought to grant of 17,586 restricted share units to Matt for his 2022 financial year LTAR remuneration award and 17,586 performance rights for his 2022 LTVR Remuneration Award. The CEO's LTAR award was subject to a pre grant assessment by the board as noted earlier And the board approved the full grant of restricted share units. As a result, if shareholders prove this item today, Matt will be granted 17,586 restricted share units. These units will be granted in 2 tranches with 50% restricted for 4 years to 30th June 2025 50% restricted for 5 years to the 30th June 2026. Matt will only receive value from this grant after the restriction period and following the board's risk review. The performance rights will be subject to performance measures over the period 1 July 2021 to 30 June 2025. These measures are described in detail in your notice of meeting. However, in summary, 50% of the award is subject to a relative total shareholder return measure compared with the peer group of the 20 largest companies by market capitalization on the ASX at 1 July 'twenty 1, excluding the bank and resource companies. And 50% of the award is subject to a relative total shareholder return measure compared with the financial services peer group. Following the end of the 4 year performance period, the number of performance rights will be adjusted to reflect the outcomes of the performance tests. Annie Wright's remaining on foot after the test will be subject to a further holding period of 2 years to 30 June 2027 for 50% of the remaining performance rights and 3 years to 30 June 2028 for the other 50% of the remaining performance rights. Vesting of the restricted share units and performance rights Following the end of the restriction period and holding period respectively will be subject to malice consideration of whether there have been any serious material matters and may be reduced by the board as a result, including to nil, prior to vesting or if vested, subject to clawback. This ensures that the outcomes appropriately consider risk, accountabilities and reputation outcomes. Restricted share units and performance rights do not carry any voting rights. As part of the approach to alignment with the shareholder experience, Matt will receive dividend equivalent payments in respect of the restricted share units and those performance rights that ultimately vest But only in relation to the restriction period or holding period. Matt will not receive any value for franking credits. Full details are set out in the notice of meeting. So I invite shareholders and proxy holders who wish to ask a question on this item to do so now, I'll now move to the first question. Ellen, are there questions online? Chairman, there are questions online. The first one submitted by shareholder Rita Masilevskiy. Why should the CEO, Matt Common, be rewarded with significant grant of securities when in your Chairman's message you said Alongside the remedial action plan, we also revised our code of conduct and refined the bank's values of care, courage which states We have the courage to step in, speak up and lead by example and commitment. Staff are encouraged to speak up and constructively challenge colleagues, including those more senior. Cultural change has also been reinforced through the remuneration framework with an emphasis on accountability and risk management. The media state's CBA threatened whistleblower Ms. Cara Nichols, Head of Group Governance's job, which led her to lodge an adverse action claimed in the Federal Court. Ms. Nichols did speak up and repeatedly raised concerns that her team was overworked and under resourced. Is CBA's Speak Up program, a detrimental tool for CBA to punish their overworked, hardworking staff whilst rewarding executives. Thank you, Ms. Mesoleski. I can confirm that the speak up process Again, is robust and is anonymous if employees would like it to be anonymous. And again comes through and is reported to in terms of its overall operation and the matters raised reported through to the audit committee. So, there is a very strong process but in fact we encourage employees to speak up directly and that is embedded in our code of conduct and that's part of, one of the behaviors that we're seeking to continue to encourage and that's Open and constructive challenge and that is part of our risk assessment process. In terms of Matt and these awards, I would note that these awards are for performance in the future And on that basis, we'll be assessed against performance criteria, including the Malice and Clawback adjustments. There's a second question from shareholder Rita Mazilevsky. Read the prudential inquiry, CBA CEO Matt Commons said, 3 years ago, we set out improving governance, culture and accountability across the bank through the remedial action plan by implementing all of the recommendations in the prudential inquiry final report. The question is why does CBA continue its unacceptable contraventions and breaches albeit CBA bragging about its completed and implemented recommendations from the prudential inquiry final report. CBA just appears to be treating this as a box ticking exercise whilst maintaining unacceptable conduct which falls well below community expectations with Mr. Common being rewarded with unacceptable remuneration and rewards. Well, thank you again Ms. Mazilezskiy, but I can't agree with your characterization of Matt or of CBA in that regard. We are The wrap was not a box ticking exercise. As I said, it was an exercise over 3 years with thousands of people. Having said that, we recognize there's a great deal of work to do and we do have, as I noted, a transition plan in place. But that plan will then have to be followed through by an ongoing commitment by the bank at all levels. So we're under no illusions as to how much more there is And what it will take to make sure that the gains that we've made are enduring. And Matt's online from shareholder Stephen Main. The CEO already owns $6,000,000 worth of ordinary shares. Could Matt please comment on why he needs to receive any more LTI grants to keep him motivated when he already has a very big Quidi Play from previous grants. Thank you, Mr. Main. These grants are part of our remuneration framework And as we've mentioned that framework went through extensive revision last year to make sure that we can attract and retain the best talent possible. The integrity of the framework It is essential so that executives trust that the framework will be applied as designed. And I would note in evolving the framework, We actually reduced the maximum potential opportunity by 19%, including within that the maximum cash opportunity by 12%. So there was a reduction overall as part of that framework, but we intend to apply the framework as designed. And as we've noted, the design is takes into account the CPS-five eleven requirements Of the regulator, those have now been finalized and we're going to do an assessment against them to make sure that we are fully compliant. Chairman, we've received a question in writing prior to the meeting. The shareholder asks, why are we carrying out a buyback and then asking us to vote on granting options on shares for the CEO. Why not just increase his salary, which is already a very good salary? Thank you. Well, the purpose of having the equity elements in the remuneration framework It's twofold. 1, to make sure that the executives and Matt in this case, that their experience in terms of holding equity And material equity is aligned to the shareholder experience. So the equity component is really important there and The equity will deliver benefit if the bank does well and if the bank doesn't do well, it won't. The other reason for equity is that it remains on foot and as we've said over extended periods, so for Matt, 4, 5, 6 7 years that equity remains on foot and therefore is subject to malice and clawback considerations If there are material risk issues, so the holding of the equity of that longer period is aligned to the risk horizons that occur in the bank. Chairman, I confirm there are no further questions on this item online. Thank you. Can I go to the telephone operator? The first question received via the telephone is from Peter Starr. Please go ahead, Peter. Thank you. Hi, Catherine. I want to make some comments and then a direct question. We talk about people being able to blow the whistle from with inside the bank. And Cara Nichols not only wrote to you, I believe also, Ms. Mulhern. And I should point out that I briefly spoke with Ms. Nichols. The disturbing thing for me, both as a customer And for shareholders should be that the bank threatened to sack her, withdrew once she engaged lawyers. She resigned about 8 days ago on the 5th October and the bank Settled in a confidential settlement on October 6th. Terms not to be disclosed. If we're going to look at performance and give These things disturb ordinary customers and shareholders because they doubt The accuracy of if people are able to speak up Because this happened before when people tried to speak up. Jeff Morris, the previous CEO, Mr. Common was there in the bank. When it took 4 corners to drag Ian Norev over common shore scandals, the mess that was in The whole lot, financial advice to people, and we're still cleaning up that mess. I'd like to ask you, Mr. Common, are you really sincere To clean up the mess once and for all and to fix Customers that were wronged by the bank. Thanks, Catherine. Thank you, Mr. Starr. Again, I'll just repeat the reassurance that I gave you that there's no one in the bank who's more focused on customer outcomes than Matt and that includes addressing the issues from the past. And Matt has led the program to make sure that those issues are addressed and that customers remediated where that's necessary. But there is absolutely no doubt in the Board's mind as to Matt's commitment to customers. Can I confirm that there are no further questions in the telephone queue? And then the next question received via telephone for this item of business is from Peter Thank you. Through you, Mr. Livingston. Matt, Mr. Common, I would like you maybe to Give a commitment that we can meet would you be fair to give that commitment? I I think Mr. Stark, can we pick that up offline and follow through with you on that? I'm sure Matt would be happy to. Can I confirm that there are no further questions on the phone? Chairman, I confirm there are no further questions received via the telephone for this item of business. And Helen, are there any further questions online? I FM Chairman, there are no further questions online for this item. Thank you. So, I now put the resolution to the meeting for you to cast your vote. Displayed on your screen are details of the direct and proxy votes received prior to the meeting for this resolution. And for those of you on the phone, the Slide confirms that we have received 79.92 percent of votes for the resolution and 19.26 percent of votes against the resolution. I'll now move to Item 5, which incorporates 2 resolutions requisitioned by a group of shareholders led by market forces. The resolutions were proposed under Section 249N of the Corporations Act and are each set out in the notice of meeting as items 5a and 5 Resolution 5A seeks an amendment to the company's constitution to enable shareholders to put advisory resolutions to the meeting. Advisory resolutions are not binding but instead express an opinion or request information such as the resolution proposed in Item 5B. Item 5A 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. Resolution 5b is a contingent advisory resolution that will only be put to the meeting if Resolution 5a is passed by shareholders. I should just confirm that the board respects does respect the right of shareholders to put a resolution to the general meeting. However, we do not consider that the change to the constitution proposed by Item 5A, which is to allow advisory resolutions, is in the best interest of all shareholders. The board has therefore recommended that shareholders vote against Item 5A. The board is responsible for making decisions that are in the best interest of the company. The proposed constitutional change to enable shareholders to put advisory resolutions to meetings We provide a platform for a minimum of 100 shareholders to promote any number of matters that may not be in the best interest of the company and shareholders as a whole, particularly in circumstances where the board and management have invested significant time in evaluating risks and forming a considered view of the company's best interests. The board also considers that it would be inappropriate for any one issue promoted by a potentially small group of shareholders to be given increased prominence over any other. Further, the proposed amendment would introduce uncertainty and detract from decision making by the board, which is not in shareholders' best interest. The company encourages transparency and appropriate shareholder discussion and provide shareholders with a number of avenues to raise issues or concerns. As I have mentioned, Item 5B is an advisory resolution. It requests that the company disclose in subsequent annual reporting information demonstrating how the company will manage its fossil fuel exposure in accordance with a scenario in which global emissions reach net 0 by 2,050. Before I invite questions and comments on Item 5A and B, I would like to emphasize that the company and your board are focused on the important issue of sustainability and specifically climate change. The board believes that the bank has in place plans to manage and mitigate the impact of climate change. As part of the bank's strategic priorities, we have committed to playing a leadership role in supporting Australia's economic recovery and transition to a sustainable economy. In addition to considering the risks of climate change, our strategy also seeks to harness the significant existing and emerging opportunities to help our customers reduce their emissions and adapt to climate change. In August, we published our updated environmental and social policy and framework in accordance with our commitment to review the policy every 2 years. The policy sets out the bank's minimum standards adopted to manage environmental and social risks. The updated policy provides greater transparency and clarity for staff, customers and the community on our approach to lending to the fossil fuel sectors. As part of the framework and subject to Australia having a secure energy platform, we have committed to provide no project finance to new or expanded thermal coal mines, To reduce our existing project finance exposure to thermal coal mines and coal fired pile plants to 0 by 2,030 And only provide project finance for new or expanded oil or gas projects or metallurgical coal after an assessment of the environmental, social and economic impacts of such activity and if in line with the goals of the Paris Agreement. The board considers that these policy settings appropriately manage financial and non financial risk to the bank, consider Australia's energy security, Support our customers in their transition to a low carbon future and are aligned with our commitment to the goals of the Paris Agreement. As in previous years, we have transparently reported our exposure to the energy sector clients via our energy value chain. In financial year 2021, those disclosures show that as at 30 June 2021 compared to 30 June 2020, Our exposure to thermal coal extraction entities was down 15%, to gas extraction entities down 27 percent and oil extraction entities down 28%. Our exposure to gas power generation entities was down 17% and our exposure to coal power generation Entities was down 55%. Over the same period, our exposure to renewable power generation increased by 13% to 4,800,000,000. In FY21, as I've mentioned, we already we sorry, we also began developing priority sector level glide paths informed by science based climate scenarios. These measures will allow us to transparently track alignment to the Paris Agreement at a sector level. Our initial sector level glide paths are in 4 of the most emissions intensive sectors in our portfolio and that's thermal coal mining, upstream oil, upstream gas and Power Generation. In the coming year, we intend to implement these 4 glide paths internally. This will help us understand the impact of our lending decisions at a portfolio level. We will publish these glide paths in the 2022 annual report Our initial drafts of the glide paths use the underlying reference scenario IEA SDS 2020, which is a well below 2 degrees scenario in line with the goals of the Paris Agreement. We will, within 12 months, review the ongoing suitability of this scenario having regard to the policy context, scientific literature, data availability and quality and the global and domestic emissions trajectory. In addition, during the year, we implemented whole of organization governance led by the CEO in relation to our environmental and social policy, Strengthened our ESG assessment tool in relation to lending decisions and formulated a detailed plan of action for FY 'twenty two in relation to climate risks and opportunities. The board remains fully committed to CBA playing its part in limiting climate change in line with the goals of the Paris Agreement and supporting the transition to net 0 emissions by 2,050. For these reasons, as outlined in the notice of meeting, the board recommends that shareholders vote against both items 5a and 5b. I would now like to give Mr. Jack Bertolos from Market Forces, which put forward the resolution and opportunity to address the meeting. I'm Jack Vitoles from Market Forces. We worked with shareholders to coordinate items 5a andb. And I'll speak briefly today in favor of the resolution calling on Commonwealth Bank to no longer finance new fossil fuel projects and to disclose targets to reduce fossil fuel exposure Consistent with net 0 greenhouse gas emissions by 2,050. Commonwealth Bank supports the net 0 by 2,050 goal. Climate science and energy modeling make it abundantly clear that achieving this goal leaves no room for new fossil fuel projects and requires rapid declines in the production and use of Coal, Oil and Gas, yet Commonwealth Bank has continued to fund significant new fossil fuel projects and the company is pursuing them. Critically, it has also walked back policy that should prevent this funding from taking place. The bank has also taken the active decision to align its pathways guiding future fossil fuel exposure with a scenario consistent with net 0 by 2,070 and which allows for expansion of the fossil fuel industry. This resolution therefore presents a necessary opportunity for Commonwealth Bank to bring its fossil fuel lending into line with its stated support for global climate goals. Failure to bridge this gap would leave Commonwealth Bank exposed to needless financial climate change transition risks as well as reputation and legal risks as the world moves to rapidly decarbonize. Shareholders do not want to see this company exposed to stranded fossil fuel assets, Being called out for funding climate wrecking companies or being sued over inconsistencies between its statements and actions. We therefore ask shareholders to support this resolution with the long term interests and sustainability of the company in mind and thank those that have already Thank you, Mr. Vitollis. And I'd like to acknowledge the engagement from yourself and Mr. Julian Vincent at Market Forces as we finalized our E and S framework. And I also welcome your acknowledgment of our commitment to support the transition to net 0 emissions by 2,050. However, again, I'd like to take a moment just Clarify a few of the matters that you've raised. Our policy is clear that we will not provide project finance to new oil and gas extraction projects Unless they are Paris aligned. We continue to reinforce from our climate goals what we have done is to update our Environmental and Social Framework to provide greater transparency to bankers, customers and the community about our decision framework. In preparing the initial draft of glide paths for thermal coil, oil, gas and power generation, We have used a well below 2 degrees reference scenario which is consistent with the Paris Agreement. It uses what we believe is the best Currently available data and has been relied upon by a number of peer banks globally. In our annual report, we have said that we will review the ongoing suitability of that scenario within the next 12 months having regard to a number of important factors including the availability and quality of data. I understand that the IEA will shortly be releasing more data and will obviously also await the outcomes of COP26. As we have done today, we will work through that information in a methodical fashion before making decisions. We also have a rigorous risk management framework, which includes analysis of our potential exposures to stranded assets. And we're currently working with APRA on its climate vulnerability assessment across the sector. We recognize the ongoing level of interest in the bank's approach to managing climate change. And I can also confirm to shareholders that the board will give consideration to a non binding vote on our climate change report at the next AGM. I will now invite shareholders and proxy holders who wish to ask a question on either 5a or 5b The vote on these items is conducted separately and item 5B will only be put to the meeting if item 5A passes. I will now move to the first question. Chairman, we've received some comments and a question from the Australian Shareholders before the meeting. The ASA congratulates the bank on the detailed reporting of its climate strategy and climate risk management assessments and monitoring. The ASA also notes that most major Australian companies, including those with intensive production or use of carbon based energy sources, have committed to transition plans that will see significant reductions in emissions over the next 10 years with net zero emissions by 2,050. Can the Chairman confirm that it will continue to provide funding support to essential Australian businesses and jobs so that they can transition to a more sustainable future. Thank you to the ASA. I think as I might have said earlier, our philosophy is really to work with our clients and support them through The transition and there's a great deal of transition that has to occur over the next 10 years. So quite apart from 2,050 Targets to 2,030 are really crucial if we're to get to the net zero emissions 2,050. So as Our clients have to go through their transition. They will need support in terms of capital and lending. And we want to be part of ensuring that they can get that funding to make that transition. Chairman, we've received a number of questions in writing prior to the meeting on what CBA is doing to reduce its own emissions. One shareholder commented and asked, CBA has made good progress in measuring and reducing its emission sources but says it's relying on offsetting to reach carbon 0. Do you have plans to be more aggressive and show leadership in this space? Yes, thank you. So what we have managed to do in terms of our own emissions on Scope 1 and Scope 2, so we have, offset sorry, we have acquired renewable energy for all of our energy requirements. So that is direct renewable into the bank. We are left with Certain Scope 1 and some Scope 3 which we can't convert to renewable. So for example, the diesel used in vehicles. And in that instance, we do actually acquire offsets, but we do so acquiring them from The Aboriginal Carbon Foundation, so they are certified under the ACCU framework. So we're confident, A, the benefit is in Australia And there is good certification on those offsets. I would say on our Scope 1, we're looking for opportunities actually to reduce Scope 1, so that we no longer have to buy the offsets. And that includes looking at our vehicle fleet and whether they can that can be converted to electric vehicles. Chairman, we've received a number of questions about CBA's policy in relation to fossil fuel funding, including from shareholders Richard Matthews, Katrina Randall and this from Frank James Thompson who asks, there is a need to drastically reduce the use of fossil fuels in the energy sector and develop alternative energy sources. There's also a need to maintain reliable energy supplies over what will be an Standard 20 plus years phase in period. During this time, existing assets will need to be responsibly managed by responsible companies through to retirement or transitioned to carbon capture or other energy sources. What is CBA's policy refinance to the Coal, Oil and Gas Sectors. Well, I think as I've outlined already in the meeting, we have A range of elements that make up our overall policy, 4 of them effectively relate to thermal coal where we're clear that we will exit from any funding of thermal coal by 2,030. With existing clients in oil, gas and metallurgical coal, we will work with them. We have spoken About the need for transition plans from 2025. But as I mentioned, we're already working with those clients to understand their transition plans. And we will not enter into any new oil, gas or metallurgical coal unless aligned with the Paris Agreement. And that is a major qualifier. It's not clear how such projects could be at this stage. But if technologies are developed such as carbon capture and storage and if they are successful and they do abate emissions From a particular project, then they would be in keeping with the Paris Agreement and we would consider whether we would fund them. But they would have to pass our ESG assessment in the first instance and absolutely demonstrate that they're compliant that they're consistent with the transition to Paris. Chairman, a further question online received from shareholder Steven Main. Could the Chair please comment on why Australian boards are so afraid of listening to the opinions of shareholders by way of non binding shareholder resolutions. These are standard practice in the U. S. Yet dozens of ASX Listed companies have now recommended against these amendments, including CBA today. Why not blaze the trail by supporting this to allow for opinion based shareholder resolutions. Please show more respect for the opinions of shareholders. Well, Mr. Main, thank you very much for your comment. And as I said, We do not have a concern about the shareholder resolutions and they certainly have a role. But The specifics of any resolution need to be considered and in this case the board has and has recommended against. Chairman, we've received a question online from shareholder Leslie Hughes. Commonwealth Bank states, We are committed to playing our part in limiting climate change in line with the goals of the Paris Agreement. The science is clear that achieving the goals of The Paris Agreement means global greenhouse gas emissions must be reduced deeply and rapidly this decade. For advanced economies including Australia, it means achieving net 0 by 2,035 and in all parts of the world by 2,040 at the latest. Given Commonwealth Bank's commitment to the Paris Agreement, Do you accept the science that achieving this goal requires net 0 greenhouse gas emissions by 2,040? I think we are committed to the Paris Agreement. There is more and increasingly Detailed data coming out and we're looking forward to seeing the IEA data and also the data that will come out of COP26. And as I said, we will take all of that data and consider it and be very careful in terms of incorporating it into our framework and informing those draft glide parts that we have for fossil fuel sectors that we've Identified, our philosophy overall is to support the transition but to make it very science based and Data Based. Chairman, we've received an online question from shareholder, Mia Wright. Why does the Commonwealth Bank financially support APA and Santos' destruction to the Great Artesian Basin? The Great Artesian Basin is far more important to our people than money. The destruction of the Great Atesian Basin will ultimately have damaging cultural, economic and environmental effects on all. Groundwater is the main resource for our communities and Santos has not guaranteed that they will not damage our precious water. This water has sustained us during our worst times of drought and Saved Our Communities. Why would we jeopardize? Thank you for that question. And again, I'm not going to comment on Individual customers, and would just reiterate that we do have an increasingly rigorous Environmental and social assessment that we do on all lending. And that's obviously the environmental side, would include The considerations of water. Chairman, I can confirm there are no further questions online for this item of business. Thank you. Can I go to the telephone queue? Chairman, the first question received via the telephone It's from Pamela May Evans. Please go ahead, Pamela. Good afternoon. My question is in relation to Commonwealth Bank's Previous policy to only finance new oil, gas and metallurgical coal products is backed by an assessment demonstrating them in line with the Paris Agreement. Last year, a group of shareholders wrote to the bank seeking the documents upon which we face decisions to provide funding for our host of new and expanded oil and gas projects. The Australian Financial Review reported last month that a shareholder is now taking the bank to the federal court to seek these documents as a result of shareholders' concerns that you didn't comply with the previous policies. The report quotes Professor Jacqueline Peale from Melbourne University. She said, if you get the information and it shows there's a difference Seeing what they say they're doing and what they're actually doing that potentially would be grounds for a case for breaching directors' duties or misleading and deceptive conduct or both. I am also concerned about the bank's compliance with its policy and would like to know if you plan to make these documents available for other shareholders. Thank you very much Pamela for your question. And as you point out that matter There's now a legal one before the courts and so it's not appropriate for me to comment further at this point. The next question you received via the telephone for this item of business is from Peter Wills. Please go ahead, Peter. Hi, thank you. My name is Peter Wills, and I'm a farmer on the Liverpool Plains in New South Wales. I've been a customer of CBA All my 41 years and our family is a long term CBA investor and customers of CBA for now multiple generations. My family's farms and our region have been targeted for future coal seam gas and gas pipeline developments that CBA might fund, That being the Santos Now Rail Gas Project and their vast exploration licenses over the farming region of the Liverpool Plains, the APA pipeline via the Kanamble Farming Precinct and potentially the controversial Queensland to Hunter Gas pipeline that the company wants to put across 2 of my farms at Corindye. I and our community strongly oppose being forced to go into business where these non compatible types of invasive industries with agriculture, And I will not host these developments and likely stranded assets are my family's farms. Moreover, I and probably you don't want the mortgage and risky insurance implications unnecessarily hanging over both our futures. Landholders are refusing to deal with these climate and community damaging projects. Will the Commonwealth Bank commit to cease funding coal seam gas and destructive gas pipelines or you leave it up to the community to fight them alone at Fyodorown Bank. Thank you, Peter for your comments and your question. As we've said, we will not be funding any new oil and gas exploration projects Unless they do actually meet the requirements of Paris Agreement and they pass Can I go to the next question in the queue? Chairman, the next question received via the telephone for this item of business It's from Christine Ann Cook. Please go ahead, Christine. Thank you for Taking my question, Ms. Livingston. And notwithstanding all that's gone before, I ask, is the bank concerned that its funding for renewable energy is too low? NAB's 20 21 half year results presentation ranks Commonwealth Bank below all of its major peers when it comes to funding Australia Renewable Energy Sector. We even sit below each of Japan's major banks and even the French based bank society, General. Given our climate commitments and focus on sustainability, why are we falling behind the pack and letting others take the lead when it comes to funding renewable energy? Christine, thank you for your question and it's a very valid one and you will see That we actually have increased our target. We did have a target of $15,000,000,000 by 2025 to fund renewable energy. We now have a target of $70,000,000,000 for sustainability funding by 2,030. So we're certainly very committed to funding in not just the renewable energy but sustainability more broadly. Thank you. Thank you for your point. Can I take the next question in the phone queue? Chairman, the next question received by the telephone for this item of business is from Peter Starr. Please go ahead, Peter. Thank you. I think in relation to the questions that are being asked at the bank by The climate people and things like that, I think that they should hear and listen to what the Chairman has said because It's very important, Matt. On climate, people have a view either you're either for it or against it. So I think that we as shareholders and people who are going to vote on 5A and 5B, I think we need to listen very closely to what Mr. Livingston, as the Chair of the Bank, has said. I think it's important. I think that it's important in forums at AGMs that people are able to ask questions, both proxy holders and shareholders. And I think that the bank is doing that. And I think in relation to The climate, I think that the Board sets the policy. And I think as shareholders, we have to, at least with the Board under Ms. Livingston's Chairmanship, Certainly, it seems to be in the right direction. So thanks, Mr. Livingston. Peter, thank you for your comment. Can I confirm that there are no further questions in the telephone queue? Chairman, I confirm there are no further questions received via telephone for this item of business. And online? Chairman, I confirm there are no further questions for this item of business received online. Thank you, Helen. So I now put Resolution 5A to the meeting for you to cast your vote. This resolution is not supported or endorsed by the board. Displayed on your screen are details of the direct and proxy votes received prior to the meeting for item 5A. As I explained before, Item 5A 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. For those of you on the phone, the slide confirms that we have received 93.55 percent of votes against Item 5A. Taking into account the direct and proxy vote shown on the screen, it is not possible that Item 5A will pass. As this resolution will not pass, I will not proceed with putting Item 5B to the meeting. That concludes the final item of business on today's agenda. But if there Maybe 1 or 2 more questions. Helen, do we have any more questions? Yes, and I confirm there are no more questions received online. Thank you. So thank you, shareholders. That concludes the discussion on all items of business for the 2021 Annual General Meeting. The poll will close 10 minutes after the close of the meeting. If you are yet to cast your vote, please do so now. If you're experiencing technical difficulties, Please contact the share registry by calling 1-eight hundred-two twenty two-two thousand four hundred and forty. I'll repeat that number. 1-eight hundred-two twenty two-four forty. As I mentioned earlier, the results of the poll will be released to the ASX and our website later today. Thank you for participating and attending today's AGM and for your continued support of the Commonwealth Bank of Australia. I encourage you to provide us with your feedback on your experience today by contacting us via the Investor Center or our website. Thank you, ladies and gentlemen. I now declare the meeting closed.

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