APRA Report: Australia's Big Four Banks Continue to Dominate Amidst Reforms
Banking reforms introduced in late 2010 by the federal government appear to have made little difference as giant banks continue to hold sway in the mortgage market, capturing much of the share in the home loan market pie.
According to the latest figures released by the Australian Prudential Regulation Authority (APRA), the country's so-called Big Four - namely Australia-New Zealand Banking Group (ANZ), Commonwealth Bank of Australia (CBA), National Australia Bank (NAB) and Westpac - still dominated home loans with 86.7 percent of shares.
APRA's new data also revealed that the four major banks accounted for a total of $926 billion worth of home loans, leaving the rest of the accumulated $1.07 trillion Australian mortgages in 2011 for smaller lenders to fight out for themselves.
Despite spirited efforts by Federal Treasurer Wayne Swan to radically alter the local banking environment, nothing much have changed, according to the new APRA figures, with the major lenders' 87.3 percent dominance in 2010 shedding only a dent of shares.
Less than a year after Swan ordered Australian banks to scrap their prohibitive exit fees on mortgage loans, APRA said that the Big Four actually increased their home loans by $61 billion, with CBA securing the top post of the lucrative market.
Commonwealth Bank, the APRA report said, has attracted some $305 billion worth of home loans in 2011 to come out as the best performing bank in the segment while Westpac settled for second place with its $283 billion of total home loan shares.
The biggest gainer of the year, APRA said, is NAB, with the bank edging ANZ last year on the account of its total home loans of $176 billion in 2011 while the latter fell short when it recorded only $161 billion worth of home loans on its book.
The numbers came out more than 12 months after the Australian government decided to step in as banking customers decried the apparent industry manipulation practiced by the country's major banks.
Unleashing what he called then as broad reform packages aimed at the banking sector, Swan rolled out new measures that would establish another force in the banking industry, by trying to prop up credit unions as 'mutual banks'.
Swan was then quoted by The Herald Sun as asserting that the industry reforms were meant "to empower consumers to get a better deal, to help smaller lenders put more competitive pressure on the big banks and to secure our financial system."
The whole package, Swan stressed, should spawn a banking environment that "continue to provide a sustainable flow of credit to households and businesses."