The idea that the major banks are distinct competitive entities is a “joke,” according to The Australia Institute.
A new report issued by the research centre says over 53% of each of the big four is owned by the same small number of institutional shareholders.
The largest of these, HSBC Custody Nominees, owns 16.7% of the major banks’ shares, while JP Morgan Nominees Australia Ltd owns 13.6% - and National Nominees Ltd (a wholly owned subsidiary of NAB) owns 10.7%.
Senior research fellow, David Richardson, examined the top 20 shareholders of each of the major banks and says the degree of common ownership “seriously challenges” the idea that there are four independent banks.
“The big four banks make up more than $1,460 profit from every man, woman and child in Australia. They argue that these profits flow largely to mums and dads with superannuation, but our analysis calculates that the average superannuant gets just $142 per annum.”
Richardson says the major shareholders own a big slice of all the big banks and that the last thing any of them seem to want is genuine price competition.
“Australia’s big four banks already make up four of the eight most profitable banks in the world. Our analysis of the concentration of ownership raises serious concerns about the potential for them to boost profits further by acting as a monopoly.”
Richardson says the last time the official cash rate was 3%, back in 2009, the average mortgage rate with the major banks was 5.8%. Today, those rates stand at:
CBA: 6.4%, Westpac: 6.51%, NAB: 6.38% and ANZ yet to announce.