Banks/Banking in Australia
Australian banking industry in times gone by was strictly regulated. In 1980s also establishing a foreign branch in Australia was virtually impossible; consequently Australia in comparison to Hong Kong or United States had very few banks. Moreover, the existing banks in Australia were categorized as saving and trading banks.
The savings banks gave no interest to its depositors, besides their lending activities were limited to offering mortgages. However, their trading banks were merchant banks that did not offer services to common public.
Owing to these bank regulatory restrictions, various other non-bank financial institutions emerged such as the credit union and the building society.
These institutions had less stringent regulations and offered high rates of interest, but their range of services was restricted. Originally, the Commonwealth Bank of Australia performed the role of central bank and later due to some discomfort with other banks in Australia; the central bank function was handed over Reserve Bank of Australia.
The major banks in Australia currently are Australia and New Zealand Banking Group with market capitalization $44.4 billion, National Australia Bank with $49.0 billion, Commonwealth Bank of Australia with $63.2 billion and Westpac Banking Corporation with $62.8 billion.
The government here prevents merging between these four top banks. In fact, these four banks in Australia are among the world’s top 12 banks.
Some of the other Australian-owned Banks are AMP Bank Limited, Bank of Queensland Limited, Bendigo and Adelaide Bank Limited, Macquarie Bank Limited, and many more. However, the competitors to the giant four banks are Bank of Queensland, Bendigo Bank and Suncorp-Metway. In addition to this, there are many smaller regional banks with traditional regional base and are expanding broadly.
There are foreign subsidiary banks, but only few offer retail banking namely, Bank of Cyprus Australia Ltd, HSBC Bank Australia, Citibank Australia and Laiki Bank. However, banking in Australia with foreign banks has significant presence. The other foreign subsidiary banks include Arab Bank, ING Bank, Investec Bank, Rabobank, and more.
Conversely, the banking in Australia is controlled by the APRA, Australian Prudential Regulatory Authority. They regulate the financial industry, besides superannuation companies and insurance. The statistics of banks are available on the APRA website and in the Reserve Bank Bulletin of Australia.