Melbourne, Australia (PRWEB) September 03, 2012
The Foreign Banks industry in Australia is on the mend after the financial crisis threw it off course. Although revenue growth from 2010-11 has failed to compensate for the large losses in 2008-09 and 2009-10, the industry has been soldiering on. In fact, the number of foreign banks established in Australia has grown despite the challenging operating environment. According to IBISWorld analyst Ee Jen Lee, “Asian banks are increasingly establishing a presence here as European banks are scaling back”. For many banks, Australia remains a relatively low risk economy, and thus a great opportunity for banks in search of new markets. These banks are taking the opportunity to muscle out weaker European banks. The eurozone crisis has forced many European banks to scale back their operations and reduce lending activities.
Foreign bank subsidiaries, on the other hand, are in for the long haul. HSBC and ING Direct have expanded aggressively. Over the past five years, these retail banks have targeted the home loan market and offered attractive interest rates to draw deposits. “Their growth is being aided by reforms in banking regulation that have sought to increase competition in the retail banking segment,” Lee adds. For example, exit fees have been banned and new bank account switching regulations were enforced from 1 July 2012. Over the five years through 2012-13, industry revenue is estimated to decline at an annualised 8.4%, as weak growth in the past three years has not been sufficient to offset the sharp declines that occurred at the beginning of the five-year period. In 2012-13, revenue is forecast to grow by just 0.7% to $29.5 billion.
As the economy shakes off the weight of the financial crisis, the Foreign Banks industry in Australia is forecast to grow at an annualised 4.0% over the next five years. IBISWorld forecasts relatively weak growth for the period, as the credit boom of 2006-07 is unlikely to be repeated in the next five years. In 2013-14, revenue is forecast to grow in line with home loan and term loans and advances growth. The market share concentration of the Foreign Banks industry is low. The four largest players are ING Bank, Citigroup, HSBC Bank and Deutsche Australia. There are a large number of participants in the industry, substantially more than the number of national and regional commercial banks. Strong growth in revenue over the past five years has ensured market share concentration remained low in the industry.
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.