The industry is banking on revenue growth as the economy continues to improve
Melbourne, Australia (PRWEB) May 15, 2012
The Foreign Banks industry in Australia is forecast to experience a second year of growth, following several years of decline. The performance of the Foreign Banks industry over the past five years has been limited by the global financial crisis. According to IBISWorld industry analyst Ee Jen Lee, “as many of the banks in the industry are based in Europe, several have been forced to pull back from the Australian market to redirect funds back to their home country”. However, Asian banks have begun to establish subsidiaries in Australia. Foreign banks participating in the Australian financial system suffered greatly in 2008-09 and 2009-10 from the effects of the global financial crisis, particularly in domestic markets where the economic slowdown was more severe than it was in Australia. As a result, their control of the Australian market deteriorated at the hands of national banks, which remained financially strong and continued to lend throughout these turbulent times.
A significant development that further fuelled the national bank dominance within the Australian financial system was the takeover of Bankwest by the Commonwealth Bank in late 2008. This caused a dramatic shift in assets, revenue, establishments, wages and employment. Over the five years through 2011-12, industry revenue is estimated to decline an annualised 2.3%. However, the industry returned to growth in 2010-11. Further growth is forecast for 2011-12, with industry revenue anticipated to increase 7.3% to reach $28.5 billion. As the economy gains traction and stands on its own two feet, the Foreign Banks industry is expected to return to the path of prosperity. IBISWorld forecasts the industry will gradually grow over the next five years, with steady demand for home loans and other forms of credit supporting demand.
The market share concentration of the Foreign Banks industry in Australia is low. There are a large number of participants in this industry, substantially more than the number of national and regional commercial banks. Apart from Bankwest's exit, there have been a relatively stable number of industry participants in the past five years. This has helped prevent further competitive pressures, erosion of market shares and subsequent declines in concentration levels. The four major players are ING Bank, Citigroup, HSBC Bank and Deutsche Australia.
For more information, visit IBISWorld’s Foreign Banks report in Australia industry page.
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IBISWorld industry Report Key Topics
The Foreign Banks industry comprises the banking activities of foreign bank subsidiaries, branches and representative offices in Australia. Foreign banks generate revenue through investments, interest income on loans and advances and fee and commission income.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.