Pestle Analysis Commonwealth Bank
18288003810000
Commonwealth Bank Business Report 2014
Table of Contents
Section 1: Executive Summary4
Section 2: Environmental Analysis5
2.1 External Analysis
2.1.1 PESTLE model
2.1.2 Porter’s five forces
2.2 Internal Analysis 2.2.1 Strategic Resources 2.2.2 Value Chain Analysis
Section 3: Global Expansion11 3.1 Regional Expansion Strategy
Section 4: Ethical Capitalism11 4.1 Ethical and Social Implication
Section 5: Strategic Decision about Asset Management12
5.1 First Mover Advantage
Section 6: Recommendation and Conclusion13
Reference List13
Section 1: Executive summary
CBA has put record profit of $8.68 billion dollar although the company is facing Royal Commission inquiry with regard to Financial Planning scandal (Yeates 2014). At present, CBA is a dominant leader in the retail-banking sector across the Australian financial services industry with premium price trade due to its largest customer base in Australia with its disruptive technology (Rose 2014). However, it is important for CBA to invest in service improvements and innovation to maintain its current market leadership position.
Therefore to …show more content…
identify the success factor behind CBA, it is important to assess Australian Financial industry as a whole to examine the attractive features of Australian Banking sector and the internal strength of CBA to clarify its competitive advantages and capabilities.
Industrial life cycle
Australian Financial industry has exhibited the characteristics of shakeout stage lifecycle stages (Shapiro 2014). In shake out stage cycle, competition and price-war between financial institutions have intensified since big four banks are imposing discounts on variable interest rates available to a broader range of borrowers and lowering their fixed rates on mortgage offers (AAP 2014). Since then, services offered by big four banks become difficult to differentiate each other and this has helped the customers to broaden their option to have selective acquisition with the major banks. Further analysis will explain CBA’s clients and competitors power change due to industry evolution and its regional expansion strategy. Then, the further report will analyze the reason behind CBA to attain premium stock price over competitors and its ethical implication in financial industry .
Section 2: Environmental Analysis
External Analysis
To analyze the external industrial environment that lead CBA to stay ahead of competitors, overall Australian Financial industry will need to be analyzed in term of Porter’s five forces followed by PESTLE model to observe how the competitiveness of the Australian Financial environment and macroeconomics factors have changed within the industrial structure (Thomas 2007).
PESTLE Model Political-Legal
Conservative supervisory of APRA, which approached more intensive than the Basel II minimum requirement, has assisted Australian Financial Institutions to have minimum impact during the 2008 GFC period (RBA 2014). Moreover, Four Pillar Policy which prevents mergers between Australian’s big four banks to main competitive financial environment at low risk had also shielded the Australian Banking System from the worst of 2008 GFC (Durie and Gluyas 2009). Consequently, Australia’s strong and dynamic financial policies have favoured sustainable growth even in the hard time to former government owned incumbent CBA to withstand attack from aggressive competitors under a well-regulated financial environment (Brisden 2012).
Economical
During the pre GFC time, RBA’s interest rate has increased from 5.50% in 2000 to 7% in 2008 (RBA 2014). These inclining rates have favored big four banks during the crisis period since the high interest rates increased the bank’s deposit and helped Australian Banks to fund their debt in the hard time (Kerr 2011). Beltratti and Stulz (2009) also stated that the larger banks within strict regulations with more deposit financing at the end of 2006 had significant high return during the GFC. Therefore, during the crisis, the effect of GFC on Australian Financial Institutions were considerably low compare to other developed economies and CBA had also came through the economic turmoil with strong gain in deposit share by delivering $4.72 billion full-year net profit in 2008 (Leyden 2009). This has clearly showed that favorable Australian economical scape has favored CBA to retain premium share over competitors in post and pre GFC periods.
Technology
Eyers (2014) stated that Fintech (Financial Technology) scene is expanding rapidly in world financial centers. Financial Technologies are also challenging existing business models of financial institution since non-traditional players in Australian financial sectors are leveraging new innovation to deliver flexible services to consumers in a more convenient way (Wade 2014). However, CBA is operating efficiently in the dynamic technological environment. This is because, CBA has set its strategy to capitalize on the difference between its three big rivals by injecting $1.1 billion upgrade to its core banking system and invest $300 million a year in the high-tech modernization program (Smith 2012). So, this has clearly clarified that technology is one of the factors that lead CBA in a dynamic business environment to stay two to three years ahead of competitors (Faherty 2013).
Porter’s five forces
Next, Porter’s 5 forces will be used to determine the financial industry’s profitability, which influence over the success of CBA in Australian financial market. The threat of new entrants
Nowadays, the digitalized financial system appears to be reaching maturity and every major big four banks are utilizing different channels of entrants to capture the market share (Eyers 2014). Consequently, there is a high threat from competitors in financial market beyond APRA’s highly regulated financial systems since potential competitors from overseas and domestic (e.g woolworths/Coles) could have used technologies to offer virtual and physical financial services in Australian Financial Market (Eyers 2014). Since then, this could eventually challenge the growth of CBA’s physical banking in the long run. However, CBA is still a major incumbent in a financial industry, which captures majority of market share with strong domestic presence in Australia (CBA 2014).
Bargaining power of customers
In Australian Financial industry, there is a high bargaining power of customers since Australian major big banks have brought similar financial packages with competitive rates to expand their market share in a concentrated market. As Australian market is favoring customers to bargain on the best rate, CBA has dynamically influenced the bargaining power of the market by offering an aggressive rate at low risk to itself for such customers by dropping its five years fixed home loan rate to record-low 4.99% in 2014(Yeates 2014).
Rivalry among existing competitors Todays, the financial market in Australia appeared to be reaching maturity. Mason (2014) stated that financial industry in Australia has developed at compound annual growth rate of 13% over the past decade and ranked among the most profitable banks in the developed world (Australian Trade Commission 2011). Nevertheless, Australian Financial industry is considered as Red Ocean since big four banks could potentially face more mortgage competition each other for the concentrated market share (Janda 2014). Thus, if market leader CBA failed to maintain its current competitiveness in an aggressive market, the market share could be missed out and it will be given away to competitors.
Section 2.2: Internal Analysis
Strategic Resources
Harrison (2014) stated that combination of tangibles and intangible assets of which control by the CBA could be identified as key resources to execute its strategic capabilities. Resources include teamwork among managers and Past/Present Chief executive officers, firm’s reputation among customers and its strong balance sheet has helped CBA to attain premium share price over competitors. The possession of CBA’s strategic resources ahead of competitors has favored its long-term survival and alleviated its competitive advantage. The strategic resources of the CBA will be demonstrated by using the value Chain framework.
Value Chain Analysis
Primary activities
Operation Efficiency
Smith (2012) stated that CBA appears to be ahead of competitors in its IT development strategy and this has induced CBA to attain not only cost and operational efficiency but also improve customer satisfaction. As a result, due to its new modernization in core banking system with best in class online banking platforms, CBA has attained the biggest improvement in its customer satisfaction score out of big fours and achieved Money magazine’s best innovative awards in 2014(News 2014). Moreover, CBA’s strong shareholder with a resilient balance sheet has also empowered full funded acquisition from internal and external stakeholders (Letts 2014). CBA’s significant balance sheet growth with high earning assets and deposit has empowered organic capital growth and investor’s confidence in investment. Therefore, it is assumed that strong financial strength with high profit return has amplified CBA to stay ahead rivals and trades its shares at premium over their domestic competitors.
Outbound Activities
CBA’s strong acquisitions with Aussie Home loan and concrete financial brokers network have improved its home loan supply to the new customers in the financial market (Elsworth 2014). Moreover, CBA’s 1000 plus extensive branch network in Australia with highly efficient technology platform has also aided CBA to gain solid netbank customer loyalty bases in Australia (CBA 2014).
Marketing
CBA (2014) stated that CBA is the most recognized brand in Australian financial services industry. It’s strong heritage that evolved over 100 years has also reflected that CBA is the most reputable financial services organization among big four banks in Australia. Australia’s first bank with relatively strong commitment in social supports to the community has strengthen the customer loyalty base from the senior citizens who has been the CBA customers since their childhood to new generation Y (Ferguson 2014). This halo effect and generation-to-generation word of mouth marketing technique with high exit cost has made CBA to retain more customers than other competitors in Australian financial industry.
Supporting activities
Firm Infrastructure
CBA’s landmark core banking system which worth 1.1 billion dollar and strong branch infrastructure has supported CBA’s outbound activities to capture majority of market share through Australia (Smith 2012).
Human Resources Management and Technology Development
CBA’s highly experienced executives with unique banking system which remained ahead of competitors has helped CBA to cut operation cost by letting it operates with highly efficient technology (CBA 2012).
Next, Teamwork among managers and the board executive’s members also takes an important role in the growth of CBA in the pre and post GFC periods. The Chairman of CBA also stated that the CEO does not only do the decisions of the operations. Instead detail strategy and scripts are worked together and set from globally qualified board with the external advice from independent facilitators (Kitney 2014). This low hierarchical top-down decision-making culture has favored past/presents CEOs to make right decisions at the right time to achieve sustained position over others in the financial
industry.
Procurement
CBA’s broad acquisitions with insurance and home loan subsidiary companies have enabled it to access potential resources to supply broad options to customer at less risk (Johnston 2012). CBA’s ability to cut fixed interest rate to maintain its dominant share of the property market in Australian is because of the favourable changes in global money market, which made cheaper for CBA to raise its long-term fund (Maley 2014).
Section 3: Global Expansion Regional Expansion Strategy
CBA regional expansion strategy in Asia-Pacific Region has generated more than 50% of revenue from asset management in 2012 (Narev 2012). Instead of focusing its revenue generation from wholesales banking; CBA has secured its regional expansion strategy based on low risk asset management and Retail banking by partnering with major financial key players in Asia Pacific regions (CBA 2012). However, other big three competitors are overlooking on lucrative high risk wholesales banking in overseas market which are sensitive to changes in the global monetary and interest rate environment (Bennet 2014). Since Narev has realised that it is hard for local banks to predict global economy and interest rate, he has decided CBA to operates at minimum risk with sustainable growth in Asia-Pacific region by avoiding the high risk wholesales banking activities in an unstable global business environment (Bennet 2014). Subsequently, CBA’s low operation risk and its sustainable organic regional growth strategy are assumed to improve investor’s confidence, and lead CBA stock price to attain premium over competitors (CBA 2014).
Section 4: Ethical Capitalism
Ethical and Social Implication
Due to the controversial practise of financial advisers in 2006, CBA has come under public investigation for its immoral wealth management practises and this has severely damaged the credibility of the institution in 2014 (Eyers 2014). However, the scandal does not impact the premium share price of the CBA as the public expected (Yeates 2014). This is because majority CBA’s corporate decisions are assumed to be based on Utilitarianism ethical practise since its overall business decisions are resulting positive consequences for stakeholders with minimum negative impacts. For example, CBA’s strategic decision over its competitive interest rate has captured majority of the Australian mortgage market share and this has reduced the risk of stakeholder’s return in a competitive financial market in 2014 (Yeates 2014).
Nonetheless, CBA could be deemed as an ethical participant in Australian Economy in the long run by sticking to Utilitarianism theory. According to the theory, CBA should always minimise the financial risk of the stakeholders while maintaining its profit optimisation objective within the ethical custom of Australia to maintain its sustainable growth in the long run (Quiggin 2007).
Section 5: Strategic Decision about Asset Management Business
5.1 First Mover Advantage (Rosenzweig’s third field decision)
According to the Internal and External business environment analysis, CBA’s strategic decisions are assumed to follow Rosenzweig’s third field decision of “Placing Competitive bets ” in their asset management business( Rosenzweig 2013). According to Rosenzweig’s third field decision, Narev realised that all of its competitors are trying to do the same as CBA in a red ocean business environment (Mcmahon 2012). Thus, Narev has taken a first mover advantage based on its incumbent potency of cost effectiveness and technology efficiency over its competitors (Mcmahon 2012). This first mover advantages has favoured CBA to attain maximum profit and stay ahead of its competitors in pre and post GFC periods. For example, Curren cited that the success of the CBA’s core banking modernisation program has given CBA a 2 to 3 years sustainable strategic first mover advantage with its incumbent potency and this change in Australian banking landscape has led CBA to attain premium price share over competitors (SAP AG 2013).
Section 6: Recommendation and Conclusion
In order to attain premium share price in the long run, it is recommended that CEO should keep maintain CBA’s current key success factors and strategic resources from its value chain to stay ahead of competitors. Then, CBA’s board of management decisions should also relentlessly dynamic to attain first mover advantage. In order to do so, CBA should continuously analyze its opportunity for the business model innovation via value chain and improve their current modernization program in the technology sector to attain dynamic capabilities in the red ocean business environment. Additionally, with regards to market expansion, CBA’s corporate parent should have more cohesion with its subsidiary businesses units (ie. Aussie Home loan and Colonial first state) and work collectively with them to perform better than they would as stand-alone financial entities in the future. These subsidiary business units will eventually helps CBA to attain synergies and enables Narev and his associates to identify opportunities that competitors will not see in the competitive financial industry (Johnson et al. 2012).
In conclusion, in order to maximize stakeholders confident in their investment in CBA , CBA’s management should not only maximize its economic objective but also consider its responsible business decision making practice to reduce the stakeholder risk in the long run.
Reference
Australian Trade Commission 2009, Australian Financial Industry, Canberra ,viewed 13 Sep 2014,< file:///Users/Kelvin/Downloads/Australias-Banking-Industry.pdf>
Bennet, M. 2014, ‘ANZ ‘ahead of schedule’ in Asia’, Australian Business Review, 24 July, viewed 13 August 2014, < http://www.theaustralian.com.au/business/anz-ahead-of-schedule-in-asia/story-e6frg8zx-1226999243818>
Bennet, M. 2014, ‘ANZ says election will brighten outlook, posts $1.6bn Q3 cash profit’, Australian Business Review, 16 August, viewed 13 August 2014, < http://www.theaustralian.com.au/business/companies/anz-optimistic-on-outlook/story-fn91v9q3-1226698195140>
Beltratti, A and Stulz, M. R. 2003, ‘Why did some banks perform better during the credit crisis? A cross-country study of the impact of government and regulation’, Working Paper, no. 15180, National Bureau of Economic Research.
Brisden, C. 2012, ‘Four Pillars policy our shield against crisis’, Australian, 03 March, viewed 13 October 2014, <http://www.theaustralian.com.au/business/latest/four-pillars-our-shield/story-e6frg90f-1111119012308>
Commonwealth Bank. 2014, Commonwealth Bank Overview, Commonwealth Bank, Sydney, viewed 24 October 2014,
< https://www.commbank.com.au/about-us/our-company/overview.html>
Commonwealth Bank. 2014, Our Brand, Commonwealth Bank, Sydney, viewed 24 October 2014,
< https://www.commbank.com.au/about-us/our-company/our-brand.html>
Commonwealth Bank of Australia 2012, Commonwealth Bank of Australia delivers a good result in an uncertain environment, media release, viewed 17 September 2014, < https://www.commbank.com.au/about-us/news/media-releases/2012/120815-commonwealth-bank-of-australia-delivers-a-good-result-in-an-uncertain-environment.html>
Commonwealth Bank of Australia 2014, Highlights of 2014 Result, media release, viewed 17 September 2014,< https://www.commbank.com.au/about-us/news/media-releases/2014/investment-in-long-term-strategic-priorities-drives-earnings-growth.html>
Commonwealth Bank of Australia 2012, Commonwealth Bank announces partnership with China Union Pay, media release, viewed 17 September 2014,< https://www.commbank.com.au/about-us/news/media-releases/2012/120702-commonwealth-bank-announces-partnership-with-china-unionpay.html>
Durie, J. and Gluyas, R. 2009, 'Four pillars' keeps banks safe: IMF’, Australian, 26 Sep, viewed 13 October 2014, < http://www.theaustralian.com.au/news/latest-news/four-pillars-keeps-banks-safe-imf/story-fn3dxiwe-1226481430456>
Elsworth, S. 2014, ‘Mortgage brokers are being rewarded with bigger commissions with warnings it could affect their objectivity’, Australian Financial Review, 30 Sep, viewed 13 October 2014, <http://www.news.com.au/finance/money/mortgage-brokers-are-being-rewarded-with-bigger-commissions-with-warnings-it-could-affect-their-objectivity/story-e6frfmci-1227073197079>
Eyers, J. 2014, ‘Technological renaissance gives rise to regulatory inquiry’, Sydney Morning Herald, 21 March, viewed 13 August 2014, < http://www.smh.com.au/business/technological-renaissance-gives-rise-to-regulatory-inquiry-20140320-355tf.html>
Eyers, J. 2014, ‘How Sydney can become a global fintech hub’, Business Review, 7 Oct, viewed 13 October 2014, < http://www.brw.com.au/p/tech-gadgets/how_sydney_can_become_global_fintech_pDYbRScHNklAZ5h7PLn8BM>
Ferguson, A. 2014, ‘Misconduct claims widen in CBA's planning scandal’, Sydney Morning Herald, 14 June, viewed 13 October 2014, < http://www.smh.com.au/business/misconduct-claims-widen-in-cbas-planning-scandal-20140613-3a2wn.html>
Faherty, A. 2013, CBA has 'two year lead' on rivals, Asia Pacific Banking and Finance, Sydney, viewed 24 October 2014, <http://www.australianbankingfinance.com/technology/cba-has--two-year-lead--on-rivals/>
Harrison, G. 2014, Integrated Business Applications (BUSS3500), The University of Sydney, Sydney, 18 August, viewed 14 September 2014, < https://blackboard.econ.usyd.edu.au/webapps/portal/frameset.jsp?tab_tab_group_id=_2_1&url=%2Fwebapps%2Fblackboard%2Fexecute%2Flauncher%3Ftype%3DCourse%26id%3D_332528_1%26url%3D>
Johnson, E. 2012, ‘CBA takes control of Aussie Home Loans’ , Sydney Morning Herald, 18 December, viewed 13 August 2014, < http://www.smh.com.au/business/banking-and-finance/cba-takes-control-of-aussie-home-loans-20121218-2bka6.html>
Janda, M. 2014, ‘Five-year fixed mortgage rates plummet as bank competition heats up’, Australian Broadcasting Corporation, 25 July, viewed 13 August 2014, < http://www.abc.net.au/news/2014-07-23/commonwealth-bank-fixed-loan-cut-implies-low-rate-outlook/5618428>
AAP. 2014, ‘CBA sparks fixed rate loan war’, SBS, 23 July, viewed 13 August 2014, < http://www.sbs.com.au/news/article/2014/07/23/cba-sparks-fixed-rate-loan-war >
Johnson, G., Whittington, R and Scholes, K. 2012, Fundamental of Strategy, Pearson Press, England.
Kerr, C. 2011, ‘GFC bank guarantee scaled back to $250,000’, Australian, 12 Sep, viewed 13 October 2014, < http://www.theaustralian.com.au/national-affairs/gfc-bank-guarantee-scaled-back-to-250000/story-fn59niix-1226134304195>
Kitney, D. 2014, ‘David Turner’s modest mantra breeds CBA’s success’, Australian, 17 May, viewed 13 October 2014, <http://www.theaustralian.com.au/business/financial-services/david-turners-modest-mantra-breeds-cbas-success/story-fn91wd6x-1226920731018>
Leyden , F. 2009, ‘Commonwealth Bank $4.72b profit despite global financial crisis’, Courier Mail, 13 August, viewed 13 August 2014, <http://www.couriermail.com.au/business/commonwealth-bank-472b-profit-despite-global-financial-crisis/story-e6freqmx-1225760794197>
Letts, S. 2014, ‘Capital punishment ... what's worrying the banks?,’ Australian Financial Review, 29 May, viewed 13 August 2014, <http://www.abc.net.au/news/2014-08-15/capital-punishment--whats-worrying-the-banks/5674182>
Mcmahon, S. 2012, ‘Streamlining helps CBA fight the transaction tide’, Herald Sun, 29 May, viewed 13 October 2014, <http://www.heraldsun.com.au/business/streamlining-helps-cba-fight-the-transaction-tide/story-fn7j19iv-1226370389275>
Maley, K. 2014, ‘Is this as good as it gets for Commonwealth Bank? ‘, Australian Financial Review, 13 Aug, viewed 13 October 2014, < http://www.afr.com/p/business/financial_services/is_this_as_good_as_it_gets_for_commonwealth_T5VYITe4o4nmcSl0Rg8ECN>
Mason, M. 2014, ‘Australia's Big 4 banks are global unknowns’, Sydney Morning Herald, 3 Feb, viewed 13 October 2014, <http://www.smh.com.au/business/banking-and-finance/australias-big-4-banks-are-global-unknowns-20140203-31win.html#ixzz3FkDKZY7l>
News. 2014, ‘Mozo People’s Choice Awards shows record satisfaction for big four banks’, News, 29 Sep, viewed 13 October 2014, <http://www.news.com.au/finance/business/mozo-peoples-choice-awards-shows-record-satisfaction-for-big-four-banks/story-fnkjidjt-1227073564126>
Narev, I. 2012, Group Strategy Update, The Commonwealth Bank of Australia, Sydney, 19 April, viewed 14 September 2014, <https://www.commbank.com.au/about-us/shareholders/pdfs/2012-asx/Commonwealth_Bank_Group_Strategy_Update_19_April_2012.pdf>
Quiggin. J. 2003, ‘Risk and Social Democracy’, Australian Public Policy Program Working Paper, no. P07#2, The University of Queensland.
Rosenzweig.P, 2013, ‘What Makes Strategic Decisions Different’, Harvard Business Review, November, pp.89-93 ,viewed 17 September 2014,< http://ereserve.library.usyd.edu.au.ezproxy1.library.usyd.edu.au/fisher/RosenzweigWhatMakes2013.pdf>
Reserve Bank of Australia. 2014, The Regulatory Response to the Global Financial Crisis, Reserve Bank of Australia, Canberra, viewed 24 October 2014, <http://www.rba.gov.au/publications/submissions/fin-sys-inquiry-201403/reg-res-global.html>
Reserve Bank of Australia. 2014, Historical Data, Reserve Bank of Australia, Canberra, viewed 24 October 2014, < http://www.rba.gov.au/statistics/historical-data.html#interest-rates>
Rose, S. 2014, ‘CBA confident in ability to beat tech start-ups’, Financial Review, 28 July, viewed 13 October 2014, <http://www.afr.com/p/technology/cba_confident_in_ability_to_beat_l1RspfZeWbgNKiEOibzvRL>
SAP AG. 2013, Commonwealth Bank of Australia: Building Lasting, Real-Time Value for Customers, SAP Business Transformation Studies, Sydney, viewed 14 September 2014, <http://www.sap.com/bin/sapcom/en_us/downloadasset.2013-10-oct-07-16.commonwealth-bank-of-australia-pdf.html>
Smith, P. 2012, ‘Analysts challenge CBA to hold tech lead’, Australian Financial Review, 29 May, viewed 13 August 2014, <http://www.afr.com/p/technology/analysts_challenge_cba_to_hold_tech_AlyFzSL1mYNGNTJpONijwL>
Shapiro, J. 2014, ‘Capital cascade demands outlets’, Financial Review, 12 Feb, viewed 13 October 2014, <http://www.afr.com/p/capital_cascade_demands_outlets_4M6tPvbpy4I5cggRauGRzK>
Shapiro, J. 2014, ‘Three of the big four slash mortgage rates’, Financial Review, 23 July, viewed 13 October 2014, <http://www.afr.com/p/business/financial_services/three_of_the_big_four_slash_mortgage_69WNYefVNNoSbWVeuxI2MO>
Smith, P. 2012, ‘CBA ‘streets ahead’ of rivals on tech’, Financial Review, 28 May, viewed 13 August 2014, <http://www.afr.com/p/technology/cba_streets_ahead_of_rivals_on_tech_5FdXcvouP2qNRNSNdAyCWM>
Thomas , H. 2007 , ’An analysis of the environment and competitive dynamics of management education’, Journal of Management Development, Vol. 26 Iss: 1, pp.9 – 21 ,viewed 13 October 2014.
Wade, M. 2014, ‘Sydney struggling to keep up as technology challenges financial services industry’, Sydney Morning Herald, 7 Oct, viewed 13 October 2014, <http://www.smh.com.au/nsw/sydney-struggling-to-keep-up-as-technology-challenges-financial-services-industry-20141006-10qoza.html#ixzz3H7ro1sBS>
Yeates, C. 2014, ‘Mortgage war erupts as Commonwealth Bank, NAB, Westpac cut fixed rates’, Sydney Morning Herald, 23 July, viewed 13 August 2014, <http://www.smh.com.au/business/banking-and-finance/mortgage-war-erupts-as-commonwealth-bank-nab-westpac-cut-fixed-rates-20140723-zw1qd.html>
Yeates, C. 2014, ‘CBA reports $8.68b record profit despite planning scandal’, Sydney Morning Herald, 13 August, viewed 13 October 2014, <http://www.smh.com.au/business/banking-and-finance/cba-reports-868b-record-profit-despite-planning-scandal-20140813-103foe.html#ixzz3H7JBMhyh>
Commonwealth Bank Business Report 2014
Table of Contents
Section 1: Executive Summary4
Section 2: Environmental Analysis5
2.1 External Analysis
2.1.1 PESTLE model
2.1.2 Porter’s five forces
2.2 Internal Analysis 2.2.1 Strategic Resources 2.2.2 Value Chain Analysis
Section 3: Global Expansion11 3.1 Regional Expansion Strategy
Section 4: Ethical Capitalism11 4.1 Ethical and Social Implication
Section 5: Strategic Decision about Asset Management12
5.1 First Mover Advantage
Section 6: Recommendation and Conclusion13
Reference List13
Section 1: Executive summary
CBA has put record profit of $8.68 billion dollar although the company is facing Royal Commission inquiry with regard to Financial Planning scandal (Yeates 2014). At present, CBA is a dominant leader in the retail-banking sector across the Australian financial services industry with premium price trade due to its largest customer base in Australia with its disruptive technology (Rose 2014). However, it is important for CBA to invest in service improvements and innovation to maintain its current market leadership position.
Therefore to …show more content…
identify the success factor behind CBA, it is important to assess Australian Financial industry as a whole to examine the attractive features of Australian Banking sector and the internal strength of CBA to clarify its competitive advantages and capabilities.
Industrial life cycle
Australian Financial industry has exhibited the characteristics of shakeout stage lifecycle stages (Shapiro 2014). In shake out stage cycle, competition and price-war between financial institutions have intensified since big four banks are imposing discounts on variable interest rates available to a broader range of borrowers and lowering their fixed rates on mortgage offers (AAP 2014). Since then, services offered by big four banks become difficult to differentiate each other and this has helped the customers to broaden their option to have selective acquisition with the major banks. Further analysis will explain CBA’s clients and competitors power change due to industry evolution and its regional expansion strategy. Then, the further report will analyze the reason behind CBA to attain premium stock price over competitors and its ethical implication in financial industry .
Section 2: Environmental Analysis
External Analysis
To analyze the external industrial environment that lead CBA to stay ahead of competitors, overall Australian Financial industry will need to be analyzed in term of Porter’s five forces followed by PESTLE model to observe how the competitiveness of the Australian Financial environment and macroeconomics factors have changed within the industrial structure (Thomas 2007).
PESTLE Model Political-Legal
Conservative supervisory of APRA, which approached more intensive than the Basel II minimum requirement, has assisted Australian Financial Institutions to have minimum impact during the 2008 GFC period (RBA 2014). Moreover, Four Pillar Policy which prevents mergers between Australian’s big four banks to main competitive financial environment at low risk had also shielded the Australian Banking System from the worst of 2008 GFC (Durie and Gluyas 2009). Consequently, Australia’s strong and dynamic financial policies have favoured sustainable growth even in the hard time to former government owned incumbent CBA to withstand attack from aggressive competitors under a well-regulated financial environment (Brisden 2012).
Economical
During the pre GFC time, RBA’s interest rate has increased from 5.50% in 2000 to 7% in 2008 (RBA 2014). These inclining rates have favored big four banks during the crisis period since the high interest rates increased the bank’s deposit and helped Australian Banks to fund their debt in the hard time (Kerr 2011). Beltratti and Stulz (2009) also stated that the larger banks within strict regulations with more deposit financing at the end of 2006 had significant high return during the GFC. Therefore, during the crisis, the effect of GFC on Australian Financial Institutions were considerably low compare to other developed economies and CBA had also came through the economic turmoil with strong gain in deposit share by delivering $4.72 billion full-year net profit in 2008 (Leyden 2009). This has clearly showed that favorable Australian economical scape has favored CBA to retain premium share over competitors in post and pre GFC periods.
Technology
Eyers (2014) stated that Fintech (Financial Technology) scene is expanding rapidly in world financial centers. Financial Technologies are also challenging existing business models of financial institution since non-traditional players in Australian financial sectors are leveraging new innovation to deliver flexible services to consumers in a more convenient way (Wade 2014). However, CBA is operating efficiently in the dynamic technological environment. This is because, CBA has set its strategy to capitalize on the difference between its three big rivals by injecting $1.1 billion upgrade to its core banking system and invest $300 million a year in the high-tech modernization program (Smith 2012). So, this has clearly clarified that technology is one of the factors that lead CBA in a dynamic business environment to stay two to three years ahead of competitors (Faherty 2013).
Porter’s five forces
Next, Porter’s 5 forces will be used to determine the financial industry’s profitability, which influence over the success of CBA in Australian financial market. The threat of new entrants
Nowadays, the digitalized financial system appears to be reaching maturity and every major big four banks are utilizing different channels of entrants to capture the market share (Eyers 2014). Consequently, there is a high threat from competitors in financial market beyond APRA’s highly regulated financial systems since potential competitors from overseas and domestic (e.g woolworths/Coles) could have used technologies to offer virtual and physical financial services in Australian Financial Market (Eyers 2014). Since then, this could eventually challenge the growth of CBA’s physical banking in the long run. However, CBA is still a major incumbent in a financial industry, which captures majority of market share with strong domestic presence in Australia (CBA 2014).
Bargaining power of customers
In Australian Financial industry, there is a high bargaining power of customers since Australian major big banks have brought similar financial packages with competitive rates to expand their market share in a concentrated market. As Australian market is favoring customers to bargain on the best rate, CBA has dynamically influenced the bargaining power of the market by offering an aggressive rate at low risk to itself for such customers by dropping its five years fixed home loan rate to record-low 4.99% in 2014(Yeates 2014).
Rivalry among existing competitors Todays, the financial market in Australia appeared to be reaching maturity. Mason (2014) stated that financial industry in Australia has developed at compound annual growth rate of 13% over the past decade and ranked among the most profitable banks in the developed world (Australian Trade Commission 2011). Nevertheless, Australian Financial industry is considered as Red Ocean since big four banks could potentially face more mortgage competition each other for the concentrated market share (Janda 2014). Thus, if market leader CBA failed to maintain its current competitiveness in an aggressive market, the market share could be missed out and it will be given away to competitors.
Section 2.2: Internal Analysis
Strategic Resources
Harrison (2014) stated that combination of tangibles and intangible assets of which control by the CBA could be identified as key resources to execute its strategic capabilities. Resources include teamwork among managers and Past/Present Chief executive officers, firm’s reputation among customers and its strong balance sheet has helped CBA to attain premium share price over competitors. The possession of CBA’s strategic resources ahead of competitors has favored its long-term survival and alleviated its competitive advantage. The strategic resources of the CBA will be demonstrated by using the value Chain framework.
Value Chain Analysis
Primary activities
Operation Efficiency
Smith (2012) stated that CBA appears to be ahead of competitors in its IT development strategy and this has induced CBA to attain not only cost and operational efficiency but also improve customer satisfaction. As a result, due to its new modernization in core banking system with best in class online banking platforms, CBA has attained the biggest improvement in its customer satisfaction score out of big fours and achieved Money magazine’s best innovative awards in 2014(News 2014). Moreover, CBA’s strong shareholder with a resilient balance sheet has also empowered full funded acquisition from internal and external stakeholders (Letts 2014). CBA’s significant balance sheet growth with high earning assets and deposit has empowered organic capital growth and investor’s confidence in investment. Therefore, it is assumed that strong financial strength with high profit return has amplified CBA to stay ahead rivals and trades its shares at premium over their domestic competitors.
Outbound Activities
CBA’s strong acquisitions with Aussie Home loan and concrete financial brokers network have improved its home loan supply to the new customers in the financial market (Elsworth 2014). Moreover, CBA’s 1000 plus extensive branch network in Australia with highly efficient technology platform has also aided CBA to gain solid netbank customer loyalty bases in Australia (CBA 2014).
Marketing
CBA (2014) stated that CBA is the most recognized brand in Australian financial services industry. It’s strong heritage that evolved over 100 years has also reflected that CBA is the most reputable financial services organization among big four banks in Australia. Australia’s first bank with relatively strong commitment in social supports to the community has strengthen the customer loyalty base from the senior citizens who has been the CBA customers since their childhood to new generation Y (Ferguson 2014). This halo effect and generation-to-generation word of mouth marketing technique with high exit cost has made CBA to retain more customers than other competitors in Australian financial industry.
Supporting activities
Firm Infrastructure
CBA’s landmark core banking system which worth 1.1 billion dollar and strong branch infrastructure has supported CBA’s outbound activities to capture majority of market share through Australia (Smith 2012).
Human Resources Management and Technology Development
CBA’s highly experienced executives with unique banking system which remained ahead of competitors has helped CBA to cut operation cost by letting it operates with highly efficient technology (CBA 2012).
Next, Teamwork among managers and the board executive’s members also takes an important role in the growth of CBA in the pre and post GFC periods. The Chairman of CBA also stated that the CEO does not only do the decisions of the operations. Instead detail strategy and scripts are worked together and set from globally qualified board with the external advice from independent facilitators (Kitney 2014). This low hierarchical top-down decision-making culture has favored past/presents CEOs to make right decisions at the right time to achieve sustained position over others in the financial
industry.
Procurement
CBA’s broad acquisitions with insurance and home loan subsidiary companies have enabled it to access potential resources to supply broad options to customer at less risk (Johnston 2012). CBA’s ability to cut fixed interest rate to maintain its dominant share of the property market in Australian is because of the favourable changes in global money market, which made cheaper for CBA to raise its long-term fund (Maley 2014).
Section 3: Global Expansion Regional Expansion Strategy
CBA regional expansion strategy in Asia-Pacific Region has generated more than 50% of revenue from asset management in 2012 (Narev 2012). Instead of focusing its revenue generation from wholesales banking; CBA has secured its regional expansion strategy based on low risk asset management and Retail banking by partnering with major financial key players in Asia Pacific regions (CBA 2012). However, other big three competitors are overlooking on lucrative high risk wholesales banking in overseas market which are sensitive to changes in the global monetary and interest rate environment (Bennet 2014). Since Narev has realised that it is hard for local banks to predict global economy and interest rate, he has decided CBA to operates at minimum risk with sustainable growth in Asia-Pacific region by avoiding the high risk wholesales banking activities in an unstable global business environment (Bennet 2014). Subsequently, CBA’s low operation risk and its sustainable organic regional growth strategy are assumed to improve investor’s confidence, and lead CBA stock price to attain premium over competitors (CBA 2014).
Section 4: Ethical Capitalism
Ethical and Social Implication
Due to the controversial practise of financial advisers in 2006, CBA has come under public investigation for its immoral wealth management practises and this has severely damaged the credibility of the institution in 2014 (Eyers 2014). However, the scandal does not impact the premium share price of the CBA as the public expected (Yeates 2014). This is because majority CBA’s corporate decisions are assumed to be based on Utilitarianism ethical practise since its overall business decisions are resulting positive consequences for stakeholders with minimum negative impacts. For example, CBA’s strategic decision over its competitive interest rate has captured majority of the Australian mortgage market share and this has reduced the risk of stakeholder’s return in a competitive financial market in 2014 (Yeates 2014).
Nonetheless, CBA could be deemed as an ethical participant in Australian Economy in the long run by sticking to Utilitarianism theory. According to the theory, CBA should always minimise the financial risk of the stakeholders while maintaining its profit optimisation objective within the ethical custom of Australia to maintain its sustainable growth in the long run (Quiggin 2007).
Section 5: Strategic Decision about Asset Management Business
5.1 First Mover Advantage (Rosenzweig’s third field decision)
According to the Internal and External business environment analysis, CBA’s strategic decisions are assumed to follow Rosenzweig’s third field decision of “Placing Competitive bets ” in their asset management business( Rosenzweig 2013). According to Rosenzweig’s third field decision, Narev realised that all of its competitors are trying to do the same as CBA in a red ocean business environment (Mcmahon 2012). Thus, Narev has taken a first mover advantage based on its incumbent potency of cost effectiveness and technology efficiency over its competitors (Mcmahon 2012). This first mover advantages has favoured CBA to attain maximum profit and stay ahead of its competitors in pre and post GFC periods. For example, Curren cited that the success of the CBA’s core banking modernisation program has given CBA a 2 to 3 years sustainable strategic first mover advantage with its incumbent potency and this change in Australian banking landscape has led CBA to attain premium price share over competitors (SAP AG 2013).
Section 6: Recommendation and Conclusion
In order to attain premium share price in the long run, it is recommended that CEO should keep maintain CBA’s current key success factors and strategic resources from its value chain to stay ahead of competitors. Then, CBA’s board of management decisions should also relentlessly dynamic to attain first mover advantage. In order to do so, CBA should continuously analyze its opportunity for the business model innovation via value chain and improve their current modernization program in the technology sector to attain dynamic capabilities in the red ocean business environment. Additionally, with regards to market expansion, CBA’s corporate parent should have more cohesion with its subsidiary businesses units (ie. Aussie Home loan and Colonial first state) and work collectively with them to perform better than they would as stand-alone financial entities in the future. These subsidiary business units will eventually helps CBA to attain synergies and enables Narev and his associates to identify opportunities that competitors will not see in the competitive financial industry (Johnson et al. 2012).
In conclusion, in order to maximize stakeholders confident in their investment in CBA , CBA’s management should not only maximize its economic objective but also consider its responsible business decision making practice to reduce the stakeholder risk in the long run.
Reference
Australian Trade Commission 2009, Australian Financial Industry, Canberra ,viewed 13 Sep 2014,< file:///Users/Kelvin/Downloads/Australias-Banking-Industry.pdf>
Bennet, M. 2014, ‘ANZ ‘ahead of schedule’ in Asia’, Australian Business Review, 24 July, viewed 13 August 2014, < http://www.theaustralian.com.au/business/anz-ahead-of-schedule-in-asia/story-e6frg8zx-1226999243818>
Bennet, M. 2014, ‘ANZ says election will brighten outlook, posts $1.6bn Q3 cash profit’, Australian Business Review, 16 August, viewed 13 August 2014, < http://www.theaustralian.com.au/business/companies/anz-optimistic-on-outlook/story-fn91v9q3-1226698195140>
Beltratti, A and Stulz, M. R. 2003, ‘Why did some banks perform better during the credit crisis? A cross-country study of the impact of government and regulation’, Working Paper, no. 15180, National Bureau of Economic Research.
Brisden, C. 2012, ‘Four Pillars policy our shield against crisis’, Australian, 03 March, viewed 13 October 2014, <http://www.theaustralian.com.au/business/latest/four-pillars-our-shield/story-e6frg90f-1111119012308>
Commonwealth Bank. 2014, Commonwealth Bank Overview, Commonwealth Bank, Sydney, viewed 24 October 2014,
< https://www.commbank.com.au/about-us/our-company/overview.html>
Commonwealth Bank. 2014, Our Brand, Commonwealth Bank, Sydney, viewed 24 October 2014,
< https://www.commbank.com.au/about-us/our-company/our-brand.html>
Commonwealth Bank of Australia 2012, Commonwealth Bank of Australia delivers a good result in an uncertain environment, media release, viewed 17 September 2014, < https://www.commbank.com.au/about-us/news/media-releases/2012/120815-commonwealth-bank-of-australia-delivers-a-good-result-in-an-uncertain-environment.html>
Commonwealth Bank of Australia 2014, Highlights of 2014 Result, media release, viewed 17 September 2014,< https://www.commbank.com.au/about-us/news/media-releases/2014/investment-in-long-term-strategic-priorities-drives-earnings-growth.html>
Commonwealth Bank of Australia 2012, Commonwealth Bank announces partnership with China Union Pay, media release, viewed 17 September 2014,< https://www.commbank.com.au/about-us/news/media-releases/2012/120702-commonwealth-bank-announces-partnership-with-china-unionpay.html>
Durie, J. and Gluyas, R. 2009, 'Four pillars' keeps banks safe: IMF’, Australian, 26 Sep, viewed 13 October 2014, < http://www.theaustralian.com.au/news/latest-news/four-pillars-keeps-banks-safe-imf/story-fn3dxiwe-1226481430456>
Elsworth, S. 2014, ‘Mortgage brokers are being rewarded with bigger commissions with warnings it could affect their objectivity’, Australian Financial Review, 30 Sep, viewed 13 October 2014, <http://www.news.com.au/finance/money/mortgage-brokers-are-being-rewarded-with-bigger-commissions-with-warnings-it-could-affect-their-objectivity/story-e6frfmci-1227073197079>
Eyers, J. 2014, ‘Technological renaissance gives rise to regulatory inquiry’, Sydney Morning Herald, 21 March, viewed 13 August 2014, < http://www.smh.com.au/business/technological-renaissance-gives-rise-to-regulatory-inquiry-20140320-355tf.html>
Eyers, J. 2014, ‘How Sydney can become a global fintech hub’, Business Review, 7 Oct, viewed 13 October 2014, < http://www.brw.com.au/p/tech-gadgets/how_sydney_can_become_global_fintech_pDYbRScHNklAZ5h7PLn8BM>
Ferguson, A. 2014, ‘Misconduct claims widen in CBA's planning scandal’, Sydney Morning Herald, 14 June, viewed 13 October 2014, < http://www.smh.com.au/business/misconduct-claims-widen-in-cbas-planning-scandal-20140613-3a2wn.html>
Faherty, A. 2013, CBA has 'two year lead' on rivals, Asia Pacific Banking and Finance, Sydney, viewed 24 October 2014, <http://www.australianbankingfinance.com/technology/cba-has--two-year-lead--on-rivals/>
Harrison, G. 2014, Integrated Business Applications (BUSS3500), The University of Sydney, Sydney, 18 August, viewed 14 September 2014, < https://blackboard.econ.usyd.edu.au/webapps/portal/frameset.jsp?tab_tab_group_id=_2_1&url=%2Fwebapps%2Fblackboard%2Fexecute%2Flauncher%3Ftype%3DCourse%26id%3D_332528_1%26url%3D>
Johnson, E. 2012, ‘CBA takes control of Aussie Home Loans’ , Sydney Morning Herald, 18 December, viewed 13 August 2014, < http://www.smh.com.au/business/banking-and-finance/cba-takes-control-of-aussie-home-loans-20121218-2bka6.html>
Janda, M. 2014, ‘Five-year fixed mortgage rates plummet as bank competition heats up’, Australian Broadcasting Corporation, 25 July, viewed 13 August 2014, < http://www.abc.net.au/news/2014-07-23/commonwealth-bank-fixed-loan-cut-implies-low-rate-outlook/5618428>
AAP. 2014, ‘CBA sparks fixed rate loan war’, SBS, 23 July, viewed 13 August 2014, < http://www.sbs.com.au/news/article/2014/07/23/cba-sparks-fixed-rate-loan-war >
Johnson, G., Whittington, R and Scholes, K. 2012, Fundamental of Strategy, Pearson Press, England.
Kerr, C. 2011, ‘GFC bank guarantee scaled back to $250,000’, Australian, 12 Sep, viewed 13 October 2014, < http://www.theaustralian.com.au/national-affairs/gfc-bank-guarantee-scaled-back-to-250000/story-fn59niix-1226134304195>
Kitney, D. 2014, ‘David Turner’s modest mantra breeds CBA’s success’, Australian, 17 May, viewed 13 October 2014, <http://www.theaustralian.com.au/business/financial-services/david-turners-modest-mantra-breeds-cbas-success/story-fn91wd6x-1226920731018>
Leyden , F. 2009, ‘Commonwealth Bank $4.72b profit despite global financial crisis’, Courier Mail, 13 August, viewed 13 August 2014, <http://www.couriermail.com.au/business/commonwealth-bank-472b-profit-despite-global-financial-crisis/story-e6freqmx-1225760794197>
Letts, S. 2014, ‘Capital punishment ... what's worrying the banks?,’ Australian Financial Review, 29 May, viewed 13 August 2014, <http://www.abc.net.au/news/2014-08-15/capital-punishment--whats-worrying-the-banks/5674182>
Mcmahon, S. 2012, ‘Streamlining helps CBA fight the transaction tide’, Herald Sun, 29 May, viewed 13 October 2014, <http://www.heraldsun.com.au/business/streamlining-helps-cba-fight-the-transaction-tide/story-fn7j19iv-1226370389275>
Maley, K. 2014, ‘Is this as good as it gets for Commonwealth Bank? ‘, Australian Financial Review, 13 Aug, viewed 13 October 2014, < http://www.afr.com/p/business/financial_services/is_this_as_good_as_it_gets_for_commonwealth_T5VYITe4o4nmcSl0Rg8ECN>
Mason, M. 2014, ‘Australia's Big 4 banks are global unknowns’, Sydney Morning Herald, 3 Feb, viewed 13 October 2014, <http://www.smh.com.au/business/banking-and-finance/australias-big-4-banks-are-global-unknowns-20140203-31win.html#ixzz3FkDKZY7l>
News. 2014, ‘Mozo People’s Choice Awards shows record satisfaction for big four banks’, News, 29 Sep, viewed 13 October 2014, <http://www.news.com.au/finance/business/mozo-peoples-choice-awards-shows-record-satisfaction-for-big-four-banks/story-fnkjidjt-1227073564126>
Narev, I. 2012, Group Strategy Update, The Commonwealth Bank of Australia, Sydney, 19 April, viewed 14 September 2014, <https://www.commbank.com.au/about-us/shareholders/pdfs/2012-asx/Commonwealth_Bank_Group_Strategy_Update_19_April_2012.pdf>
Quiggin. J. 2003, ‘Risk and Social Democracy’, Australian Public Policy Program Working Paper, no. P07#2, The University of Queensland.
Rosenzweig.P, 2013, ‘What Makes Strategic Decisions Different’, Harvard Business Review, November, pp.89-93 ,viewed 17 September 2014,< http://ereserve.library.usyd.edu.au.ezproxy1.library.usyd.edu.au/fisher/RosenzweigWhatMakes2013.pdf>
Reserve Bank of Australia. 2014, The Regulatory Response to the Global Financial Crisis, Reserve Bank of Australia, Canberra, viewed 24 October 2014, <http://www.rba.gov.au/publications/submissions/fin-sys-inquiry-201403/reg-res-global.html>
Reserve Bank of Australia. 2014, Historical Data, Reserve Bank of Australia, Canberra, viewed 24 October 2014, < http://www.rba.gov.au/statistics/historical-data.html#interest-rates>
Rose, S. 2014, ‘CBA confident in ability to beat tech start-ups’, Financial Review, 28 July, viewed 13 October 2014, <http://www.afr.com/p/technology/cba_confident_in_ability_to_beat_l1RspfZeWbgNKiEOibzvRL>
SAP AG. 2013, Commonwealth Bank of Australia: Building Lasting, Real-Time Value for Customers, SAP Business Transformation Studies, Sydney, viewed 14 September 2014, <http://www.sap.com/bin/sapcom/en_us/downloadasset.2013-10-oct-07-16.commonwealth-bank-of-australia-pdf.html>
Smith, P. 2012, ‘Analysts challenge CBA to hold tech lead’, Australian Financial Review, 29 May, viewed 13 August 2014, <http://www.afr.com/p/technology/analysts_challenge_cba_to_hold_tech_AlyFzSL1mYNGNTJpONijwL>
Shapiro, J. 2014, ‘Capital cascade demands outlets’, Financial Review, 12 Feb, viewed 13 October 2014, <http://www.afr.com/p/capital_cascade_demands_outlets_4M6tPvbpy4I5cggRauGRzK>
Shapiro, J. 2014, ‘Three of the big four slash mortgage rates’, Financial Review, 23 July, viewed 13 October 2014, <http://www.afr.com/p/business/financial_services/three_of_the_big_four_slash_mortgage_69WNYefVNNoSbWVeuxI2MO>
Smith, P. 2012, ‘CBA ‘streets ahead’ of rivals on tech’, Financial Review, 28 May, viewed 13 August 2014, <http://www.afr.com/p/technology/cba_streets_ahead_of_rivals_on_tech_5FdXcvouP2qNRNSNdAyCWM>
Thomas , H. 2007 , ’An analysis of the environment and competitive dynamics of management education’, Journal of Management Development, Vol. 26 Iss: 1, pp.9 – 21 ,viewed 13 October 2014.
Wade, M. 2014, ‘Sydney struggling to keep up as technology challenges financial services industry’, Sydney Morning Herald, 7 Oct, viewed 13 October 2014, <http://www.smh.com.au/nsw/sydney-struggling-to-keep-up-as-technology-challenges-financial-services-industry-20141006-10qoza.html#ixzz3H7ro1sBS>
Yeates, C. 2014, ‘Mortgage war erupts as Commonwealth Bank, NAB, Westpac cut fixed rates’, Sydney Morning Herald, 23 July, viewed 13 August 2014, <http://www.smh.com.au/business/banking-and-finance/mortgage-war-erupts-as-commonwealth-bank-nab-westpac-cut-fixed-rates-20140723-zw1qd.html>
Yeates, C. 2014, ‘CBA reports $8.68b record profit despite planning scandal’, Sydney Morning Herald, 13 August, viewed 13 October 2014, <http://www.smh.com.au/business/banking-and-finance/cba-reports-868b-record-profit-despite-planning-scandal-20140813-103foe.html#ixzz3H7JBMhyh>