What are the 5 major banks in Australia?

Summary

  • The Banking system provides much needed stability and robustness to an economy in uncertain times.
  • Australian banks remained resilient even during the pandemic due to their high liquidity reserves.
  • The top 5 banking institutions in Australia are Commonwealth Bank, NAB, ANZ Bank, Westpac and Macquarie Bank.

The banking system is the backbone of any country’s financial system strength. Modern banks are not only providers of credit and reserved of cash but are also associated with financial trading, stockbroking, insurance, and funds management.

Australia is home to banks that provide a unique mix of traditional banking functions and contemporary trading and insurance facilities. With over 80 banks as a part of its banking structure, Australia has a robust financial sector. During the pandemic, the performance of Australian banks is a testament to the same as these institutions maintained sufficient liquidity even in trying times.

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During the initial stages of a pandemic-induced global crisis, RBA governor Philip Lowe stated that the country owed a great deal of credit to the financial sector for keeping its head above water. Some of the biggest banks in the Australian financial sector are the following:

Commonwealth Bank (ASX: CBA)

With branches across Asia, Europe and North America, Commonwealth bank is a household name in the country. Founded in the early 1900s, the bank has outgrown the tag of a general banking services provider to become a booming business with over 800,000 shareholders.

For the March 2021 quarter, the bank reported an unaudited NPAT of AU$2.4 billion, which was 24% higher than the pandemic riddled March quarter of 2020. Despite the widespread economic slowdown, CBA reported a strong balance sheet during the quarter, with a customer deposit funding ratio of 75%.

                       

What are the 5 major banks in Australia?

 

Over the last year, Commonwealth shares have shown an unwavering upward movement, reaching a 6-month high in mid-June. The uptick came after CBA announced the sale of its Australian general insurance business. Shareholders of CBA have not been disappointed despite the hard-hitting ill-effects of Covid-19 over the economy. The bank’s large market cap of AU$184 billion certainly adds to the credibility factor.

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National Australia Bank (ASX: NAB)

Touted as one of the largest Australian banks, NAB serves more than 12.7 million clients across Australia. The bank provides a diversified range of financial products including retail, business, institutional banking, and wealth management products.

Touted as one of the largest Australian banks, NAB serves more than 12.7 million clients across Australia. The bank provides a diversified range of financial products, including retail, business, institutional banking, and wealth management products. 

In terms of assets, deposits, and market capitalization NAB tops the list of Australian banks. During the six months ending 31 March 2021, the company reported cash earnings of AU$3,343 million, with a statutory profit AU$3,208 million. This was followed by an update on the bank’s interim dividend to 60 cents per share. 

NAB has been urged by other banking institutions to not lend towards environmentally harmful operations, including oil and gas projects. In response, the bank has stated that it would adopt a more conscious after reviewing current funded projects.

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Australia New Zealand Bank (ASX: ANZ)

The ANZ bank provides banking services to customers across Australia and New Zealand, with Australia being its biggest market with approximately 6 million retail and commercial customers. The bank is a pioneer in terms of the internet banking facilities provided by it.

For the half year ending 31 March 2021, ANZ reported a profit before tax of AU$4,376 million, with total cash profit of AU$2,982 million. As of 31 March, 2021, ANZ held net tangible assets attributable to ordinary shareholders worth AU$58.5 billion.

ANZ bank also reported that it is expected to enjoy a larger customer base once the new trade deal between the UK and Australia is signed. The free trade deal would see some tariffs being lifted or lessened, creating opportunities for Australian businesses.

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Westpac Banking Corporation (ASX: WBC)

One of the oldest banking institutions in Australia, Westpac has gained the utmost trust of the Australian population over the years. The bank has five divisions to provide banking services: consumer bank, business bank, BT financial group, Westpac institutional bank, and Westpac New Zealand.

The bank aims to help fellow Australians succeed in the business through its portfolio of financial services brands. Westpac caters to a broad range of customers in risk management, customer remediation, simplification of technological solutions and optimization of returns..

For the first half of 2021, WBC’s net profit was up 189% over the previous year’s first half, at AU$3,443 million. Additionally, cash earnings during the period amounted to AU$3,537 million. Amid these promising figures, Westpac announced an interim dividend of 58 cents per share.

Macquarie Bank (ASX: MQG)

Founded in 1969, Macquarie has positioned itself as the largest investment bank in Australia. The wide-ranging services provided by the bank include asset management, financial advisory, and risk and capital solutions across debt, commodity and equity markets.

The firm has made its mark in the field of mergers and acquisitions and is constantly releasing lucrative rewards for its shareholders. The high margins and profits have made the bank known frequently in the media as the “Millionaire Factory”. Macquarie has obtained a steady inflow of borrowers, higher by 25% in April this year and 33% in total over the last year. The bank’s stock market performance has also been robust over the past few months.

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The banking system is the backbone of any country’s financial system strength. Modern banks are not only providers of credit and reserved of cash but are also associated with financial trading, stockbroking, insurance, and funds management.

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