The next big bank merger will be happening soon, and the new players in the market will have to compete with each other.
Community banks will need to compete against each other to attract funding.
Key points:The Reserve Bank is set to announce a major new banking merger to make up for the loss of Commonwealth fundingCommunity banks are one of the key players in Australia’s financial system and the Reserve Bank says the banking system is the best in the worldCommunity banks, also known as community savings banks, offer a range of financial services including credit cards, credit cards for small businesses, cash deposits, checking accounts, home loans and mortgage lending.
They also offer mortgage lending and consumer lending services, with many banks also providing mortgages to consumers.
Community banking, the largest branch network, accounts for about 10 per cent of the banking sector, but accounts for up to a quarter of total retail lending.
Community lending, which is also known to the banking industry as credit lending, is a way for small business owners to borrow money to finance their businesses.
Community bank loans typically range from $5,000 to $30,000, and can be made from a small business loan or a bank deposit.
“These savings banks provide a range for consumers,” Reserve Bank Governor Simon Crean said in a statement on Tuesday.
Mr Crean was speaking at the Commonwealth Bank Summit, which also featured the Reserve’s new CEO, Peter Fitzpatrick.”
The Reserve is committed to supporting the industry as it moves towards a new banking model, and we will continue to support community banks in their endeavours to make a positive impact in our economy.”
Mr Crean was speaking at the Commonwealth Bank Summit, which also featured the Reserve’s new CEO, Peter Fitzpatrick.
The Reserve announced the merger in March with the aim of creating a new bank that would provide community banks with a new, more competitive and less regulated market.
“The merged bank will operate independently from the existing bank, with the existing banking structure set to remain unchanged, the Reserve said.”
We are confident that our community bank and credit union model will provide the best banking options to Australian consumers,” Mr Crean continued.”
But in the context of a new financial market and as we look to create more sustainable funding models, we will be introducing a new and improved model of the bank.
“The merger will involve the merging of three key banks into a single bank, known as the Reservebank, that will focus on two main areas: community banking and the provision of banking services to consumers, including mortgage lending, credit card lending, consumer lending and business lending.
It is understood the new bank will be managed by the Reserve, which has been in control of the three main community banks, and will have more independence than the other three banks.
The two main banking groups that will continue under the new banking structure are the Commonwealth and the National Community Bank.”
The new Reservebank will be a highly-focussed and professional regulator that will have a significant influence over the industry,” Mr Fitzpatrick said in his announcement.
The merged Bank will operate under the Financial Services Commission and will also have the power to levy capital requirements, such as a 3 per cent fee on deposits.
The bank will have the same capital requirements as the Commonwealth, the National and the Community banks.
Community financial institutions will still have the ability to access Commonwealth funding, and be eligible for Commonwealth lending, but the new Reserve will have greater discretion.”
Community banking is a vibrant and growing sector in Australia, with an estimated 4.2 million Australians using it every week, and is the second largest community financial institution after the Reserve.””
However, they are not eligible for all Commonwealth financial assistance and, unlike other banks, are not subject to the Reserve policy of capital adequacy, which aims to ensure that all banks have enough resources to meet the needs of their customers.”
“Community banking is a vibrant and growing sector in Australia, with an estimated 4.2 million Australians using it every week, and is the second largest community financial institution after the Reserve.”
Community banking has grown significantly in recent years, with almost 40,000 people signing up to lend to the organisation in 2015.
The Australian Bankers Association (ABA) said community banking was “on the rise” and its members were keen to see more people signing-up.
“There are now over 5 million members of a number of Australian community banking groups and more than 20,000 in total, with about 70 per cent being women,” ABA chief executive Michelle Williams said.
The ABA said the merger would “support the growth of Australian financial services, particularly for small and medium-sized businesses”.
“We look forward to working with the Reserve to develop a new model for banking services and to create the financial infrastructure for a thriving community banking sector,” Ms Williams said in the statement.