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Mr Ralph Norris, MD & CEO, Commonwealth Bank, July 16, 2008

Major Business Lunch
Meredith Booth
July 17, 2008
THE Commonwealth Bank has ruled out trumping Westpac by launching a rival bid for St George.
"Certainly we have no intentions of going after St George," chief executive Ralph Norris said after an Australia Israel Chamber of Commerce event in Adelaide yesterday.
Westpac's $14.2 billion offer has been approved by St George's board and is yet to be challenged despite strong speculation NAB might make an offer.
"There's already another slated for St George; we certainly have no intention," Mr Norris said.
But Mr Norris said the bank would look at any opportunity "as and when it arises" in response to questions on the bank's interest in acquiring the Australian and New Zealand operations of Dutch investment bank ABN Amro.
NAB said last week it was talking with ABN Amro about a possible acquisition of the local stockbroking and wealth management arm, which has been estimated to be worth between $500 million and $1.3 billion.
Meanwhile, Australian banks had another 12 to 18 months of uncertainty ahead as the US-originated credit crisis continued to lift the cost of funding for banks.
Mr Norris said about 40 per cent of CommBank’s funding came from global credit sources and rising wholesale costs would be passed on to lenders.
Australia's major lenders have all raised their standard variable rates since July 4, despite the Reserve Bank leaving official rates on hold at 7.25 per cent this month.

"Like an oil company passes on costs at the pump, unfortunately we have to pass on the higher costs," Mr Norris said.
There was still potential for banks to make "out of sequence" mortgage interest rate rises from the Reserve Bank's official rise.
"Certainly it's not something we do lightly. For most of the last 12 months we've absorbed the rising costs," Mr Norris said.
While banks had absorbed initial rising costs in funding, CommBank's mortgage product margins in the past six to nine months had been "significantly lower" as a result of the credit squeeze.
"We're not losing money but we're not making the sort of money we were making in mortgages before," he said.
Mr Norris said the credit crunch had already claimed some Australian corporate scalps, particularly those businesses reliant on low-cost funding but continued uncertainty would also reveal takeover targets, he said.
Commonwealth Bank shares have tumbled 35 per cent since November last year but recovered 3 per cent yesterday to close at $40.02.
July 16, 2008
CBA won't rule out more home loan hikes
COMMONWEALTH Bank of Australia (CBA) chief executive Ralph Norris says there is still a risk the banks will make "out of sequence" hikes to mortgage interest rates.
 The big commercial banks have all raised their standard variable rates since July 4, even though the central bank left official rates on hold this month.
"`Well, it is hard to speculate on that - basically it depends on where pricing goes internationally, so if rates continue to remain high, or increase, there is always a risk that there will be further out of sequence increases but certainly that is not something we do lightly,' he said today.
The banks are being hit by continuing high funding costs in wholesale credit markets, due to the turmoil in debt markets across the world following the US sub-prime mortgage crisis that erupted late last year.
Mr Norris said it was not the banks' fault that their rates were rising independently of any moves by the Reserve Bank of Australia.
Mr Norris said also CBA had no intention of making a bid for Australia's fifth largest bank St George Bank , which has been approached by Westpac.
"We have no intention of getting involved in that transaction,' he said.
Westpac has made a $14.2 billion bid for St George.
Mr Norris was speaking after addressing an Australia-Israel Chamber of Commerce lunch.

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