Banks In Australia Overview List Of Top 10 Best Banks

Overview

The banking system in Australia is very reliable and transparent. The banking sector of Australia is sophisticated and competitive, and it has a strong regulatory system. The banks in Australia have a major role in the country’s financial system. They offer traditional services and services like business banking Business BankingBusiness banking refers to a bank or financial institution that focuses solely on businesses and corporate clients, offering products such as business loans, asset management, and electronic fund transfers that are tailored to their specific needs.read more, trading in the financial marketsFinancial MarketsThe term “financial market” refers to the marketplace where activities such as the creation and trading of various financial assets such as bonds, stocks, commodities, currencies, and derivatives take place. It provides a platform for sellers and buyers to interact and trade at a price determined by market forces.read more, stockbroking, and funds management. As per reports by Moody, the Australian banking system is stable because of strong home prices, rising household debt, and moderate growth in wages.

Six major forces shape the Australian banking system, changing demographics, technology, consumer behavior, Asian financial condition, government, and a subdued global economy. These forces play a pivotal role in dissipating traditional value drivers like asset growth and leverage. There are chances of these getting reversed. It leads to a revision of return expectations and future expectations for the industry. The banking system in Australia differs from America. The demarcation line between retail and investment Investment Investments are typically assets bought at present with the expectation of higher returns in the future. Its consumption is foregone now for benefits that investors can reap from it later.read morebanks has blurred down greatly in Australia.

Structure of Banks in Australia

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The Australian banking sector is evolving with time and currently undergoing progressive deregulation Deregulation Deregulation is repealing existing industry-specific regulations in an advanced industrial economy. Removing inefficient laws reduces government control over the industries, allowing businesses to operate more freely in the international market.read moreand privatization. Now, foreign banks are allowed by the government to enter the financial market. In the current scenario, the retail banks in Australia offer several financial services like life and general insurance, stock brokering, and security underwritingUnderwritingThe underwriters take the financial risk of their client in return of a financial fee. Market Makers like financial institution and large banks ensure that there is enough amount of liquidity in the market by ensuring that enough trading volume is there.read more to the retail customers. They also provide corporate and consumer loansConsumer LoansA consumer loan is a type of credit given to a consumer to finance specified set of expenditures. The borrower must pledge a specific asset as collateral for the loan, or it may be unsecured depending on the loan’s monetary value.read more to help both individuals and businesses to flourish. Since the retail banks offer a basket of financial services, it directly completes them with the brokerage firms and the merchant banks. Non – Australian foreign banks are allowed by the government to open and operate as branches to cater to the wholesale market. But in this case, retail banking is only permitted through a locally incorporated subsidiary.

The Reserve Bank of Australia (RBA) is at the head, which decides the monetary policy Monetary PolicyMonetary policy refers to the steps taken by a country’s central bank to control the money supply for economic stability. For example, policymakers manipulate money circulation for increasing employment, GDP, price stability by using tools such as interest rates, reserves, bonds, etc.read more and regulates the payment system. Then, there is the Australian Prudential Regulation Authority (APRA), whose main function is to hold the banks, credit unions, building societies, insurance companies, including general, life, and private health insurance, and the members of the superannuation industry. The Australian Prudential Regulation Authority keeps an eye on the institution whose holdings are nearly $3.7 trillion in assets covering almost 24 million Australian depositors, policyholders, and superannuation fund members.

In Australia, banks require a bank license as per the banking act. Foreign banks also require a permit as they are only allowed to operate through a branch in Australia and via Australian incorporated foreign bank subsidiaries. Banks in Australia can be classified into four major categories. They are:

Nationally operating banks commonly referred to as the major banksState banksRegionally operating banksForeign banks

The major banks or the nationally operating banks have extensive branches and agency networks because they work throughout Australia. The State banks have their operations within each state. The regionally operating banks are those building societies converted into banks and cater to a niche market. The structure of the Australian banking system is oligopolistic. The Australian market is dominated by four major banks, thus lessening completion and making the market oligopolistic.

List of Top 10 Best Banks in Australia

Commonwealth Bank of AustraliaANZNABWestpacBank of QueenslandMacquarie BankBendigo BankAMP Bank LtdSuncorp BankBankwest

In Australia, there are 53 Australian banks, out of which the government owns only 14. Though several small banks are present, four major banks dominate the Australian banking sector- Commonwealth Bank of Australia, Westpac Banking Corporation, Australia and New Zealand Banking Group (ANZ), and National Australia Bank (NAB). All these banks have AA- ratings.

#1. Commonwealth Bank of Australia:

It is a multinational bank in New Zealand, Fiji Islands, Asia, the US, and the UK. This bank was formed in the year 1911 and is headquartered in Sydney. It has more than 11,000 branches, and the number of employees is 42,548 ( Dec 2019). It is the biggest bank in Australia that provides a varied range of services and a basket of financial products. It offers retail, business, institutional banking, and wealth management services.

#2. ANZ:

ANZ bank was formed in 1835 and is known as one of Australia’s best banks that operates in the U.S., Europe, Australia, New Zealand, the Asia-Pacific region, and the Middle East. The bank provides financial services to retail, HNI clients, SMEs, and corporate and commercial customers. It has its headquarters in Melbourne and has nearly 38,479 staff.

#3. NAB:

The merger between the National Bank of Australasia and the Commercial Banking Company of Sydney formed this bank. With headquarters in Docklands, it is present in New Zealand, the U.S., Asia, and Europe.

#4. Westpac:

Westpac was known as the bank of New South Wales and resulted from the mergerMergerMerger refers to a strategic process whereby two or more companies mutually form a new single legal venture. For example, in 2015, ketchup maker H.J. Heinz Co and Kraft Foods Group Inc merged their business to become Kraft Heinz Company, a leading global food and beverage firm.read more between BNSW and the Commercial Bank of Australia. It offers services through its five divisions- Consumer Bank, Business Bank, BT Financial Group, Westpac Institutional Bank, and Westpac NZ.

#5. Bank of Queensland:

This bank has its headquarters in Queensland. It offers only retail banking services.

#6. Macquarie Bank:

This bank’s headquarters in Sydney offers asset management Asset ManagementAsset management is a method of managing funds and investing in both traditional and specialized products in order to generate returns consistent with the investor’s risk tolerance. read more, finance, banking, advisory and risk, and capital solutions.

#7. Bendigo Bank:

A merger between Bendigo Bank and Adelaide Bank formed this bank. It is one of the largest retail banks in Australia.

#8. AMP Bank Ltd.:

AMP Bank Ltd. is based out of Sydney, offering retail banking services like deposits, residential mortgagesMortgagesA mortgage loan is an agreement that gives the lender the right to forfeit the mortgaged property or assets in case of failure to repay the borrowed sum and interest.read more, transaction banking servicesTransaction Banking ServicesTransaction banking is a banking service with a significant role in corporate or banking institutions by enabling the safe flow of money from one country to another, mitigation of risks, cash flow management services, and offering security services for improving relationships between banking institutions, clients and partners.read more, etc. It is one of the leading wealth management firms in Australia and NZ. Its operation is spread over Asia, the Middle East, Europe, and North America

#9. Suncorp Bank:

Suncorp Bank provides general insurance, banking, life insurance, and wealth management services in Australia and NZ. This bank has its headquarters in Brisbane.

#10. Bankwest:

Bankwest started as a rural lender but became a full-fledged trading bank in 1945. With headquarters in Perth, this bank also has offices in Adelaide, Brisbane, Canberra, Melbourne, and Sydney. It offers personal banking, business banking, commercial banking, agri-business finance, etc.

Overview#

Structure of Banks in Australia#

List of Top 10 Best Banks in Australia#

#1. Commonwealth Bank of Australia:#

#2. ANZ:#

#3. NAB:#

#4. Westpac:#

#5. Bank of Queensland:#

#6. Macquarie Bank:#

#7. Bendigo Bank:#

#8. AMP Bank Ltd.:#

#9. Suncorp Bank:#

#10. Bankwest:#

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