Aussie Banks now in the Global Top 20

Big Four Australian banks join global elite
By Scott Murdoch
The Australian
January 26, 2009 12:00am
Text size
+ - Print Email Share Add to MySpace Add to Digg Add to del.icio.us Add to Fark Post to Facebook Add to Kwoff What are these? THE crisis in the financial system catapulted all four majors into the ranks of the top 20 global banks for the first time.
As a result Australia's big banks are expect to grab new business opportunities and draw the attention of more international investors, The Australian reported.

Although shares in the Big Four banks have collapsed more than 50 per cent in the past year, with new multi-year lows struck on Friday, they have stood up far better than their UK and US counterparts.

Despite pressure on their funding and bad-loan books, they remain highly profitable while banks overseas seek government handouts, are nationalised or allowed to collapse. In the US alone, the global shake-up means Australia's four largest banks, which have retained their AA rating, are now considered some of the biggest in the world.

The banks believe their newfound status will increase their participation in markets such as foreign exchange trading, where opportunities in the past have been limited because of the presence of bigger global players

The elevation in world rankings has brought extra attention from fund managers, particularly in the US, and the banks expect more share buying from overseas institutions.

Westpac has already experienced an increase in foreign exchange deals, with a sharp surge in the number of $1billion-plus transactions being carried out by the bank's trading desk.

On stock market capitalisation, Westpac is now considered the world's ninth-largest bank, with a worth of $US28.2 billion ($43.2 billion), ahead of Commonwealth Bank at No15, National Australia Bank at No17 and ANZ at No19. Remarkably, all four Australian banks now rank ahead of past giants such as Citigroup and Morgan Stanley in the US, Barclays in Britain and Deutsche Bank in Germany.

There are now only 13 AA-rated banks in the world, compared with 20 when the global financial crisis emerged.

The world's largest bank is now HSBC, the British institution, which is worth four times the average value of an Australian bank, while US banks JPMorgan Chase and Wells Fargo are next according to market capitalisation.

The renewed bout of fear about financial system stability, particularly in Britain, has decimated the value of a number of global institutions. The headline British banks of Lloyds, Halifax Bank of Scotland, Royal Bank of Scotland and Barclays are now worth about half of the Australian banks.

One of the largest casualties among the banks but still afloat is Citigroup, which was once the world's biggest bank but is now worth just $US15 billion and ranks No22.

Westpac head of institutional banking Phil Chronican said the maintenance of the bank's market capitalisation and value compared with its international peers had increased its reputation and knowledge among major institutional investors.

He said Westpac's move to being a stronger counterparty risk holder had brought increased foreign exchange market participation.

"I don't think any of us had been in the top 40 banks until relatively recently," Mr Chronican said.

"With the merger of St George being quite large, we've attracted the attention of our global peers and larger customers. We are finding more and more that we are quoting for large foreign exchange transactions. The customers have large amounts of money to move, more than $1billion in individual transactions. They have become much more frequent for us. We are seen to have counterparty stability."

Mr Chronican said Westpac's foreign exchange business would grow as the bank snared more international deals among fund managers and hedge funds.

"The FX (foreign exchange) business is increasingly profitable because there are fewer banks and the pricing is more competitive and intensive," he said. "One of our strongest improving businesses has been in FX because of the margins and volume."

Bank of America-Merrill Lynch banking analyst Matthew Davison said the Australian banks were now large enough to be seen as serious contenders for overseas expansion, although it was more likely the majors would concentrate on the Australian market.

Bank stocks led a massive fall on the Australian share market on Friday, with NAB hitting its lowest level for almost 12 years after a $1.17, 6.5 per cent slide to $16.94.

Others also hit record lows -- ANZ its worst for nine years at $12.06 and Westpac and the Commonwealth their worst for six years -- on fears about the global economy.

US and British banks, which unlike Australian banks are not protected by a ban on short-sellers, collapsed last week, ahead of a second round of bailouts by the British and incoming US governments.

Read the full story in The Australian.


Maybe Australia has a new export product to sell to the rest of the developed world: How to properly opperate and regulate a bank:D
 
hi all
I think you miss some thing here
because of the size of the market the banks have alot more control of the government or the people they want to talk to the goverment
then the do elsewhere.
this is not a fault of the government or the banks its business
thats why we have answer before questions
how are can we protect deposits
deposits protected before the question
was this just an act of luck
or it came 2hrs before suncorp had to tell apra another act of god.
have a rad and there are lots of acts of god here
they would not work in the us or europe.
so every different.
also we have a very funny way of looking a debt and alot of aust banks if they had to account for debt as say first boston or barclays do they would have told us all there true debt levels
this is not the case with aust banks
so anything that says aust banks are the best
thats ok against what
 
Back
Top