Tuesday, May 26, 2009

Bigger slice of less competitive pie

According to a report just released, two mergers in Australia's banking sector may be reshaping the home loans market. The report shows the merged entities Westpac and St George and that of the Commonwealth Bank and BankWest claimed a whopping 85 per cent share of new mortgages written in the first quarter of 2009.

The banking industry review by Brandmanagement – a market research firm specialising in the finance sector – shows $22.7 billion of the $26.6 billion growth in mortgage books by the big four banks (ANZ, CBA, NAB and Westpac) in the March quarter was achieved by CommBank/BankWest ($15 billion growth) and Westpac/St George ($7.7 billion), as reported by The Australian Newspaper.

The Australian Competition & Consumer Commission chair, Graeme Samuel said advice from other regulators in late 2008, at the height of the global financial crisis, to allow the merger of Commonwealth Bank and BankWest was followed only reluctantly. Mr Samuel said yesterday that the approval the commission had given to the merger between CommBank and BankWest was "not one we had been very happy about." But given the crisis in the international banking sector and on advice from the RBA and APRA "we felt we had no choice", he said.

(this article can be found at Business Spectator)

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