TAI claims major bank competition a 'joke'

by Mackenzie McCarty11 Dec 2012

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.




  • by Peter Fast 11/12/2012 10:03:11 AM

    Comments from a left wing organisation. Sensational statements and emotional text. It all adds up to the next target by the left against Australian business. We are seeing more and more comments aimed at the Broking Industry and the major lenders. You will see this ramped up in the future and eventually there will a call to ban commissions to brokers just like the Financial Planning Industry was attacked and destroyed. Industry organisations take note, control of the financial sector is a policy of socialist doctrine.

  • by John Black 11/12/2012 10:46:53 AM

    The Australia Institute is simply stating facts and if true which no doubt they are, then the numbers simply re-enforce the opening statement of competition between the majors being a joke.

  • by Jerry Gibb 11/12/2012 11:29:34 AM

    What I have been saying for a longtime the big banks are having a lend of the consumer and the Government does nothing. We are paying more than we need top for our home laon and that is where I want the government to focus on and not NCCP laws.