Concentration of banking ownership and control in Australia

Many Australian borrowers are so disappointed with Australia’s major banks that many have vowed to never borrow from them instead  looking for mortgages from smaller banks and other financial institutions but according to a story at, it seems that people are often still borrowing money indirectly from the big four.

An Abacus survey of 1000 Australians revealed that most Australians are unaware of lenders, banks and mortgage broking companies that are owned as a whole or part by the major banks. Of the people surveyed, only 53% were knowledgeable that St George is owned by Westpac and only 36% knew that Commonwealth Bank owns BankWest.

The main reason why people don’t want to get mortgages from the major banks is because of the major’s refusal to pass on rate cuts by the RBA in full. The value of the major banks, as stated in a report in, is said to be worth more than the entire economy of Singapore’s, as it increased by more than 90 billion last year, or $340 billion altogether. Of all the major bank’s products, it is from home loans that they generate a significant amount  of their income and the lack of borrower awareness that many financial institutions are owned by the big four just adds more money to the major’s pockets.

A story at says that the IMF released a conclusion last year, that Australia has a banking ‘oligopoly’ saying that compared to the other countries in the world; it has one of the most concentrated banking systems.

At the moment we have the following owned outright or controlled:

  • RAMS  – Westpac
  • St George – Westpac
  • Aussie Home Loans – CBA
  • Bankwest – CBA
  • uBank – NAB

Another issue that arises is the potential for conflict of interest that concerns  people who are aware of the hold of the major banks on the other smaller lenders and even mortgage broking companies.

The majors also have their influence in the mortgage broking industry with  NAB holding the most influence by taking control of mortgage broking networks in Plan Australia, FAST and Choice Home Loans and now reselling a white label product under their brand name Advantedge.

When the lender controls the mortgage group and the mortgage products they can then manipulate the commissions.  Of the 13,500 mortgage brokers in Australia, NAB owns the mortgage group that controls 5,500 of them and CBA about 1,000 or more.  As a result the potential for conflicts of interest to arise.  Brokers are by law not allowed to have a conflict of interest when making recommendations to their client.

The wealth management industry is also part of the growing major tentacles like CBA buying the Colonial Group, NAB buying Lend Lease’s MLC businesses, Westpac with BT Financial Group and ANZ holds ING Australia now known as OnePath.

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