Find out the story behind each bank and how they came to be.
Ownership of banks and lenders has become more concentrated in recent years. In essence, the big banks own more of the pie than ever before, although an exception to this is ANZ which hasn’t made any significant acquisitions of smaller lenders or competitors.
For consumers looking for a better deal, it may be of concern that many of the alternative lenders are actually owned by the big three banks – Commonwealth Bank, Westpac and NAB – and that the banking goliaths are closing their nets. This matters, because the Australian government's Financial Claims Scheme (FCS), which guarantees the security of your money in banks up to $250,000 per institution, applies to a bank's subsidiaries as well. Without knowing which banks own what, your savings might not be as secure as you might think. In this article, we give you the full scoop on who owns what in Australian banking.
At a glance: Overview of Australian banking ownership
|Commonwealth Bank||Westpac||NAB||Bank of Queensland||Bendigo Bank|
|Bankwest||RAMS||UBank||Virgin Money||Adelaide Bank|
|Aussie (as a major shareholder)||St.George||MLC||Investec Bank||Delphi Bank|
|Colonial First State||BankSA||Bank of New Zealand||Home Building Society Ltd||Rural Bank|
|Bank of Melbourne|
As it happened: The story behind the conquests
National Australia Bank came into being in 1982 from the merging of the National Bank of Australasia and the Commercial Banking Company of Sydney. The following decade was marked by rapid expansion as it swiftly grew around the world, opening and closing offices in the US, Korea, Greece, Malaysia, Great Britain and elsewhere. In 1992 NAB solidified its market share in New Zealand by purchasing the Bank of New Zealand, which controlled about a quarter of the country's banking market at the time.
The next major push in Australia came in 2000 when NAB merged with MLC in a $4.5 billion deal which was then one of the most valuable mergers in corporate history. From there, NAB started focusing more closely on the domestic market and selling off assets overseas. UBank was created by NAB in 2008 as a branchless direct bank to help serve the growing market for online banking services.
In recent years NAB has redoubled efforts to focus on the Australian market, demerging and selling off major assets in the United States and Great Britain. Today, NAB is one of Australia's Big Four banks, with a strong focus on the domestic market but enough overseas reach to serve its customers in an increasingly connected age.
Currently, NAB owns UBank, MLC and Bank of New Zealand among others.
Banks owned by Westpac
Westpac was Australia's first bank, established in 1817 as the Bank of New South Wales. It wasn't known as Westpac (short for Western Pacific) until about 150 years later when it merged with the Commercial Bank of Australia in 1982. The coming decades were marked by tumultuous ups and downs as its ownership of historical branches around the Pacific region was gradually reduced.
Westpac's growth was punctuated in 2008 when it purchased St.George Bank (which at the time owned BankSA) for $19 billion, as well as RAMS Home Loans. Bank of Melbourne was created in the following years, and along with BankSA, it operates as a partially separate brand to more closely serve local customers.
St.George Bank, RAMS, Bank of Melbourne and BankSA are currently among Westpac Banking Corporation's assets. As such, if you're banking with one of these, you can use any ATMs in the network without paying extra fees.
Bendigo and Adelaide Bank
Bendigo Bank, as the name suggests, was created on the goldfields of Victoria in 1858 as a building society. In the following years it grew around Australia, merging with other groups as the country became more closely connected. Its services also grew and it transformed from a building society to a holistic bank with a strong community focus. The Bendigo Building Society (BBS), as it was known at the time, was the first bank in Australia to successfully introduce both Visa credit and debit cards, and in 1995 it was renamed Bendigo Bank to more closely match the wider services on offer.
In the face of challenges unique to rural areas and agricultural businesses, Bendigo Bank and Elders Australia came together to form Rural Bank, with a focus on agribusiness development.
The next significant change came in 2007 when Bank of Queensland made a takeover offer which was refused by Bendigo Bank. Instead, it merged with Adelaide Bank in a $4 billion deal, and in 2008 the company name was officially changed to Bendigo and Adelaide Bank Limited. In 2011 it acquired Bank of Cyprus operations in Australia and renamed it Delphi Bank
In keeping with its origins as a sustainable bank for Australians, in 2014 Bendigo Bank became the first in Australia to turn away from fossil fuel investments, and in 2015 it openly supported the building and funding of a mosque in its home town of Bendigo, with the bank chairman stating that the values of tolerance and inclusiveness were part of Bendigo Bank. As a community bank, Bendigo and Adelaide Bank has shown that it's willing to stand up for its company values.
Bendigo Bank's assets currently include Adelaide Bank, Delphi Bank and Rural Bank.
Commonwealth Bank acquires Bankwest and Colonial First State
Commonwealth Bank is not only one of the largest banks in Australia, it's also one of the single largest companies the country has ever seen, with ownership of well-known brands including Bankwest and Colonial First State. It opened its first branch in Melbourne in 1912 but offered an immediately expanded reach thanks to an agreement with Australia Post that still exists to this day in the form of Bank@Post facilities.
Coming decades saw more mergers as smaller organisations joined forces with Commonwealth Bank to help it become an integral part of Australia's financial landscape and weather the Great Depression, two World Wars and many other challenges. In 1959, Commonwealth Bank had become too large to serve as the nation's central bank as well as a business institution, and the Reserve Bank of Australia was created.
Privatisation continued over the years, until 1991 when both divisions were completely separate. The next big step came in March of 2000 when Commonwealth Bank and Colonial First State announced the intention to merge. This was swiftly completed, and by June both companies were under the same umbrella. In 2008, Commonwealth Bank announced that it had purchased Bankwest from a British banking company.
Beyond Bank is created
Beyond Bank is an organisation of many names, depending on which part of Australia you're located. The most widely known around the country is probably Community CPS Australia, but in parts of South Australia you might know it as Alliance, in New South Wales you may have seen it as Wagga Mutual Union or Companion Credit Union, while its presence in Western Australia goes by United Community Credit Union.
For obvious reasons, it brought all the names together under the title of Beyond Bank. Today it operates as an award-winning community bank, bringing the local focus on which it was built to each state it operates in.
Mergers, acquisitions, renaming and everything else is all part of the banking business. As the world becomes more interconnected, the financial products and companies will inevitably change. The previous century was all about physical growth in order to become the biggest bank with the most customers.
Today you may see the opposite in effect. Bank branches cost money to maintain, and most people prefer to do their banking online or over the phone anyway. Online savings accounts are one example of how the industry responds to these changes. By doing it all online the banks can reduce their overhead costs and offer more competitive rates to customers.
Acquisitions are part of the business, and by comparing all the options, you as a customer can benefit. Switching banks has never been easier and the freedom to walk away is yours.