Total assets of Australia's biggest banks – Australia and New Zealand Banking Group (ANZ), Commonwealth Bank of Australia, National Australia Bank and Westpac – have all increased since 2017, despite a contraction in 2019.
The largest lender in the country by Tier 1 capital, Commonwealth Bank Group, went from $751bn in total assets in 2017 to reach $821bn at the end of 2021. Westpac’s total assets grew from $666bn to $673bn over the same period.
The four banks experienced a decrease in total assets in 2019, but the figure has continued to rise over the two years.
ANZ, the fourth largest bank by Tier 1 capital, is set to grow in asset size. In July, the lender agreed to a A$4.9bn ($3.3bn) deal to acquire insurer Suncorp’s banking arm and expand its presence in the state of Queensland. The acquisition will be the country’s biggest banking deal in more than a decade and will give the lender access to a market that has been growing faster than other parts of Australia.
Following the deal’s completion, expected for 2023, the banking sector in the country is set to become even more concentrated. The national competition regulator in Australia has often complained about the concentration in the Australian banking sector.
Any mergers between the big four banks, accounting for almost 80% of total bank assets, is out of question given the ‘Four Pillars’ policy, first articulated in 1990 by the government to maintain the separation of the four largest banks. However, the market might expect greater pressure for industry consolidation among the smaller banks.
