This background paper provides information about the range of Australian banking industry participants, the relative market share of those participants, the size of the Australian banking industry, the range of products offered and the profitability of the sector. This paper has been prepared (and charts have been constructed) using publicly available information.
This paper illustrates the following key points:
(a) Authorised Deposit-taking Institutions (ADIs) collectively hold around 55 per cent of the total assets of Australian financial institutions (as at the September quarter 2017), making up the largest part of the Australian financial system;
(b) There has been a decline in the number of ADIs operating in Australia, largely as a result of the decrease in the number of credit unions following consolidation activity. Credit unions and building societies have also rebranded themselves as mutual banks, resulting in an increase in the number of domestic banks operating in Australia;
(c) The major banks hold approximately three-quarters of total assets held by ADIs in Australia;
(d) ADIs hold $4.6 trillion in assets, around two-and-a-half times the size of Australia’s $1.8 trillion nominal economy. Financial and insurance services is the largest contributor to real industry gross value added; and
(e) Banks provide a wide range of products and services to Australian consumers and businesses. In particular, bank lending is a key source of external financing for SMEs and agricultural businesses in Australia.