"Thank you, Tim. Ladies and Gentlemen, the Chairman has spoken about the performance highlights of the year. I will now talk about the Bank's strategy and the changing environment for the delivery of financial services.

Financial Services
To do that, I'd like to talk about trends in customer needs in financial services; changes in technology and expanding customer access to our services. With that, to describe the strategy that we are pursuing in the Bank, and then to talk about implementation of that strategy in one key element: Growth through online, alliances and funds management.

Customer Needs & Choice
First then, let me talk about customer needs and choice.

Financial Services Trends
The slide here shows the global trends in the financial services industry, and many of these trends globally are apparent in Australia. However, Australia has some important differences. We are a developed economy with an aging population. We have a retirement income policy, which means an increase in superannuation funds. We have a Four Pillars policy which precludes mergers between the four major banks. We are technologically advanced in an open market where new entrants are allowed into our industry. We are allowed to conduct banking and non-banking services in one group, and we have an open currency and an open market. As a consequence we believe there will be rapid growth in managed funds and even more rapid developments in electronic commerce.

Customer Choice
In terms of customer choice, we see that being driven in three main ways. The access or channel choice that customers want will be driven by work patterns, for example, greater job mobility, longer periods in training and education and other factors, and by greater familiarity with alternative technologies. Product choice will be driven by changing demographics, in particular the aging of the population and demand for products that help with financial smoothing over the life time of our customers. It will also be driven by value awareness, which is increasing partly as a result of improved disclosure in the industry over recent years. Supplier choice is driven by, again, by value awareness where the need for financial self-reliance will shift preferences towards managed funds away from deposits and other lower risk products. Diversification of investment will also be increasingly important as households have more exposure to pension investments, and need to make sure that they diversify for prudent reasons.

Technology and Channel Access
Technology is a major driver of change and is going through three key phases. In the first phase of branches, phone centres and automatic teller machines, banks controlled access to their product. The next phase was that in which we used EFTPOS terminals with merchants, and other hand held devices, and in this phase we've been sharing access with retailers and others. In future, however, we see a world in which customers and third parties will have more direct control of access, and it is an important challenge for us to build a strategy that works with alliances and other arrangements and a strong brand to be properly involved in this third phase of technological evolution.

Customer Needs
Our customers' needs change quite significantly through their lifetime. This chart here shows that at certain stages of their lives, our customers either have surplus funds or require funds. Those circles above the line represent product need at a time in life where savings are important and those circles below the line show the times of life when loans are important. The Commonwealth Bank can deal with customer's needs throughout their lifetime both in banking and financial services, and we build our marketing plans to ensure that we can make product available at the time customer needs change.

Group Strategic Goals
How then do we bring these developments and requirements of our customers together to build a strategic plan? First we believe that the Bank must be able to help customers manage and build their wealth. That is the vision that drives our strategic plan. Our business goals are five that are all encapsulated around development of the brand.

First, with declining margins we must maintain the lowest unit cost structure in the industry and we must work towards continuous productivity improvement. Second, we must expand our share of customers through our leadership in online and direct access to banks with technological development. Third, we want to grow our share of financial services to ensure that we can provide for both banking and non-banking product. Fourth, we want to be able to transfer our skills to build value for our shareholders in offshore business and lastly we want to implement best practice people management in the industry.

Expanding Customer Access
Let me move on then to how we're progressing in implementing this strategy, how we're dealing with technology and expanding access arrangements for our customers to keep up with the trends.

Transaction Preferences
Customer preferences for transacting have changed dramatically over the last five years. We have now reached the point where direct and electronic access for transactions for our customers has changed over five years from approximately 50% of all transactions to 80% of all transactions.

Customer Service Centre Calls
The Commonwealth Bank is very well placed in its access technologies to deal with all forms of access. For example, in our telephone centres we now are approaching 120 million calls per year and we have 2.7 million customers who now hold telephone banking passwords.

EFTPOS Transactions
We have changed dramatically the Bank's position in the EFTPOS market. We have over 91,000 EFTPOS terminals in Australia, an increase of 12% over the June 1997 total; that is, over the last two years. Our number of EFTPOS transactions are reaching two hundred million per annum, demonstrating the popularity of this service and this will increase with the Woolworths Ezy Banking Alliance.

Accessibility
The Commonwealth Bank remains the most accessible in Australia, and our access is governed by direct face to face access at branches, business banking centres, mobile bankers, commercial sales forces and financial services consultants. Our electronic and direct access is delivered through ATM's and the other access points that I've just mentioned. Importantly, we have third party access through over 3,900 agencies around Australia, and with the roll out of Ezy Banking in Woolworths we will have access through 640 Woolworths stores for a complete banking service.

Growth through Online, Alliances and Funds Management
Next, I would like to address our growth plans through online, alliances and funds management.

Woolworths Ezy Banking
First, let me talk about the Woolworths Alliance. Customers using the Woolworths Ezy Banking Service will have over 600 extra access points across Australia. They will have a rewards program which will reward them for using the Ezy Banking Card which is also a MasterCard. They will have a reward program separately for banking at Woolworths and they can have a debit and credit card or a credit card. Customers using this service will get cash management and call account rates of interest on their deposit account. They will get reward points for using the MasterCard, as any MasterCard can be used. The MasterCard can be used at all ATM's that Commonwealth Bank cards can be used in, in Australia and offshore. The customers will get one consolidated statement setting out their deposit account and credit card account details and balances and their reward points, which they've accumulated from the service.

Most importantly customers using the Woolworths Ezy Banking Service can have up to fifty fee free debit transactions per month and most of the service can be conducted at the checkout including payment for goods, cash out and cash deposits in. Customers using Woolworths Ezy Banking Service can access the Bank through a telephone service at the store and customers can also make cheque deposits through a lock box available at the store.

Vodafone Alliance
Next, the Vodafone alliance, which we are about to launch, will allow customers to do their banking on a mobile phone. They will be able to view account balances on statement accounts, passbooks, credit cards and home loans and transfer funds between Commonwealth Bank Accounts. They will also be able to pay bills using BPAY, which accesses all utilities in Australia.

ninemsn
Our next alliance was forged with the aim of being a preferred provider of financial services across the ninemsn Network. We've entered into this alliance, although on a non-exclusive basis, to ensure that, with the development of interactive television in Australia, the Commonwealth Bank will be well placed to provide services on interactive television.

HomePath
Next, our HomePath launch recently is designed to provide customers with real estate listings for homes and to do calculations to calculate their best form of finance for the home; to actually apply for a loan and to get approval for a loan on the internet. The service also has a services directory which allows customers to look at recent valuations of properties in the area of interest to them and understand the services available in different areas where houses are listed for sale.

NetBank
The Commonwealth Bank's NetBank site is still growing in its customer numbers very rapidly. On that site our customers can view account balances, view transactions, pay bills, pay their credit card, transfer funds between accounts, record receipt numbers for payments and fund transfers and pay for share trading with Share Direct. A new version of NetBank, incorporating browser-based technology is expected to be released early next year and there will be several other enhancements as well.

Commonwealth Securities
Our Share Direct service through Commonwealth Securities continues to grow very rapidly. We have achieved, over recent years, a 52% per annum compound growth rate and we have 77,000 Internet traders using that site. We are building 12,000 new clients per month and we now have over 380,000 clients in total. The Internet site is trading about 7% by number of all share trades on the Australian Stock Exchange daily.

Funds Direct
Through Commonwealth Securities we also provide Funds Direct, a service which was launched in February 1999. Through that service our clients can access twenty fund managers and 250 funds. They can compare and rank funds, and we've now doubled the number of investments made in the previous year.

Commonwealth Financial Services
In our financial services business we have increased our retail funds under management by 23% in the year to June last and have some A$16 billion of funds under management in the retail sector and A$27 billion dollars of funds under management overall.

Growth in Share of Retail Funds
Our growth in retail funds under management in our share of retail funds depicted here demonstrates that CBA is now in sight of the leader in the industry, and we hope to achieve that position.

Global Shareholder Return
Ladies and Gentlemen, with these strategies we have been able to achieve the number 17 ranking of all the large financial services firms in the world, even though our market value ranking is number 86. This is my thirty-fourth year with the Commonwealth Bank and the thing that pleases me most is the success of the Bank in recent years. With the leadership of our Board, this has given incredible pride and development opportunities to so many of our people, and I love watching them reach that position.

In closing
Ladies and Gentlemen we will continue to pursue shareholder value in the development of our strategies and remain the most accessible bank in Australia. Thank you very much, I'll hand you back to the Chairman."