ASB Subordinated Notes Investment Statement 17 March 2014 issuer of ASB Subordinated Notes ASB Bank Limited issuer of CBA Ordinary Shares if ASB Subordinated Notes are Exchanged Commonwealth Bank of Australia ABN 48 123 123 124 Arrangers Commonwealth Bank of Australia Goldman Sachs New Zealand Limited Joint Lead Managers ASB Securities Limited Deutsche Craigs Limited Forsyth Barr Limited Goldman Sachs New Zealand Limited Macquarie Capital (New Zealand) Limited This investment is riskier than a bank deposit. The securities are not call deposits or term deposits with ASB Bank Limited and may not be suitable for many investors. investments in ASB Subordinated Notes are an investment in ASB and may be affected by the ongoing performance, financial position and solvency of ASB. ASB Subordinated Notes may also be affected by the ongoing performance, financial position and solvency of CBA. They are not deposit liabilities or protected accounts of CBA for the purposes of the Australian Banking Act. asb.co.nz i Important Information (The information in this section is required under the Securities Act 1978.) investment decisions are very important. They often have long-term consequences. Read all documents carefully. Ask questions. Seek advice before committing yourself. Choosing an investment When deciding whether to invest, consider carefully the answers to the following questions that can be found on the pages noted below: Page What sort of investment is this? 13 Who is involved in providing it for me? 14 How much do i pay? 15 What are the charges? 15 What returns will i get? 16 What are my risks? 22 Can the investment be altered? 29 How do i cash in my investment? 29 Who do i contact with inquiries about my investment? 30 Is there anyone to whom i can complain if i have problems with the investment? 30 What other information can i obtain about this investment? 31 The Financial Markets Authority regulates conduct in financial markets The Financial Markets Authority regulates conduct in New Zealand’s financial markets. The Financial Markets Authority’s main objective is to promote and facilitate the development of fair, efficient, and transparent financial markets. For more information about investing, go to Financial advisers can help you make investment decisions Using a financial adviser cannot prevent you from losing money, but it should be able to help you make better investment decisions. Financial advisers are regulated by the Financial Markets Authority to varying levels, depending on the type of adviser and the nature of the services they provide. Some financial advisers are only allowed to provide advice on a limited range of products. When seeking or receiving financial advice, you should check: • the type of adviser you are dealing with; • the services the adviser can provide you with; • the products the adviser can advise you on. A financial adviser who provides you with personalised financial adviser services may be required to give you a disclosure statement covering these and other matters. You should ask your adviser about how he or she is paid and any conflicts of interest he or she may have. Financial advisers must have a complaints process in place and they, or the financial services provider they work for, must belong to a dispute resolution scheme if they provide services to retail clients. So if there is a dispute over an investment, you can ask someone independent to resolve it. Most financial advisers, or the financial services provider they work for, must also be registered on the financial service providers register. You can search for information about registered financial service providers at . You can also complain to the Financial Markets Authority if you have concerns about the behaviour of a financial adviser. 1 FMA warning statement This investment is riskier than a bank deposit. These ASB Notes are complex instruments and might not be suitable for many investors. These ASB Notes carry similar risks to shares in ASB but do not have the same opportunity for growth as shares. The risks associated with these ASB Notes could result in the loss of your investment and any associated income. The ASB Notes are not guaranteed by ASB or any other person. If ASB or CBA experiences severe financial difficulty, the ASB Notes may be exchanged for ordinary shares of CBA or written off. You will not have any choice as to whether an exchange or write-off occurs, and you may not have a chance to sell your ASB Notes before the exchange or write-off. The value of the CBA Ordinary Shares that you receive if this occurs is likely to be less than the amount you invest in these ASB Notes. If exchange is required but is not possible, the ASB Notes will be immediately written off in part or in whole and you will lose your investment. The table shows how these ASB Notes would rank upon a winding-up of ASB if exchange does not occur and the ASB Note is not written off. Examples Examples of existing ASB securities Higher ranking/ Higher ranking obligations Secured debt and creditors Secured creditors such as money Earlier priority/ preferred by law held with clearing systems and covered First to be repaid bond programmes Liabilities given preference by law including employee entitlements and taxes Unsubordinated unsecured Deposit accounts, senior bonds and debt trade and general creditors Equal ranking obligations Term subordinated debt None currently Lower ranking obligations Perpetual subordinated and None currently unsecured debt Lower ranking/ Preference shares and other Perpetual Preference Shares issued Later priority/ equally ranked instruments in 2006 Last to be repaid Ordinary shares Ordinary shares in ASB We recommend that you consult an independent financial adviser before deciding whether or not to invest and that you make certain that you are comfortable that this investment is suitable for your needs. Further information about key risks of this investment can be found on pages 22-28 of this investment statement. 2 Important notice No representations other than in this Investment Statement Investment Statement No person is authorised to provide any information or to make This Investment Statement relates to the offer by ASB Bank any representation in connection with the Offer that is not Limited (“ASB”) of subordinated, unsecured debt securities contained in this Investment Statement. Any information or (“ASB Notes”) in New Zealand to raise up to NZ$300 million, representation not contained in this Investment Statement may with the ability to accept oversubscriptions of up to not be relied upon as having been authorised by ASB or CBA. NZ$100 million (“Offer”). In certain circumstances, ASB Notes may be exchanged for ordinary shares (“CBA Ordinary Restrictions on foreign jurisdictions Shares”) issued by Commonwealth Bank of Australia (“CBA”). This Investment Statement only constitutes an offer of ASB Notes in New Zealand. ASB has not taken and will not take any This is an investment statement for the purposes of the action which would permit a public offering of ASB Notes, or Securities Act 1978. It is an important document and should possession or distribution of any offering material, in any be read in its entirety. This Investment Statement is dated country or jurisdiction where action for that purpose is required 17 March 2014. (other than New Zealand). ASB Notes may only be offered for sale or sold in conformity with all applicable laws and regulations Documents relevant to the Offer in any jurisdiction in which they are offered, sold or delivered. The purpose of this Investment Statement is to provide certain Any information memorandum, prospectus, circular, key information that is likely to assist a prudent but non-expert advertisement or other offering material in respect of ASB person to decide whether or not to subscribe for ASB Notes. Notes may only be published, delivered or distributed in or from In addition to this Investment Statement, the following any country or jurisdiction under circumstances which will result documents are relevant to the Offer and can be obtained from in compliance with all applicable laws, regulations and listing www.asb.co.nz/subordinated-notes: rules of any applicable stock exchange. • the Terms of ASB Notes (see the Appendix to this You indemnify ASB Investment Statement); Under the Deed Poll you indemnify ASB in respect of any • the Deed Poll made by ASB (under which ASB Notes loss incurred as a result of you breaching the above are issued); selling restrictions. • the Co-Ordination Agreement between ASB, ASB Holdings Limited and CBA (which contains provisions relating to the Providing personal information Exchange of ASB Notes); and You will be asked to provide personal information to ASB (directly or via its agents) if you apply for ASB Notes. ASB may • the CBA Constitution (which is relevant if ASB Notes are share this information with any other member of the CBA Group Exchanged into CBA Ordinary Shares). for any purpose in connection with ASB Notes, including in Investors should note that other information is available in relation to the issue and holding of CBA Ordinary Shares. ASB’s latest quarterly disclosure statement (which contains ASB’s latest financial statements) and in CBA’s latest annual Governing law financial report lodged with ASIC on 19 August 2013 and profit This Investment Statement and the contracts that arise from the announcement for the half year ended 31 December 2013 acceptance of Applications are governed by New Zealand law. (which contains CBA’s most recent financial statements) lodged with ASIC on 12 February 2014. ASB Notes and the Terms are governed by New Zealand law, other than clauses 4 and 5 of the Terms, which are governed by See Section 2.11 “What other information can I obtain about this the law of New South Wales, Australia.