Australia has a thriving and successful financial services market. It has benefited in recent years by strong regulation and supervision by the Australian Prudential Regulatory Authority and, as a consequence, has been relatively untouched by the recent global financial markets.

Many of the banks that operate there are domestically owned and have expanded overseas. The major ones include Australia and New Zealand Banking Group, Westpac Banking Group and the Commonwealth Bank of Australia. Some of the others are less well known but have expanded their investment activities in the past year to take advantage of global weaknesses. One such is Macquarie Bank. In all, there are around 15 banks operating around Australia with the majority having their head office in either Sydney or Melbourne.

As may be expected in a modern thriving western culture, there are a number of foreign owned banks operating in Australia. These include big names such as HSBC, ING Bank, Citigroup, Ivestec and Rabobank. Most have their head office in Sydney.

Many other banks operate their presence in Australia as a branch rather than as a separately registered company. This means that although there is supervision by and reporting to, the Australian Prudential Regulatory Authority, the principal regulator remains that of the parent company in their home jurisdiction. The list of such banks is long but reflects the global nature of banking in a modern free trade, open capitalist society.

The domestic market is dominated by four of the home grown banks. These are Australia and New Zealand Banking Group, National Australia Bank, Westpac Banking Corporation and Commonwealth Bank of Australia. Due to long standing unwritten policy, these four can never merge enabling a base level of competitive pressure in the market.

The largest bank, as at the end of July 2009 and measured by market capitalisation, was Commonwealth Bank (AU$63.2bn). Fractionally behind was Westpac (AU$62.8bn) with National Australia third (AU$49bn) and Australia and New Zealand Bank fourth (AU$44.4bn).

Commonwealth Bank has around 7.7 million customers and operates through 1,011 branches with 3,350 ATM’s. Westpac has 10 million customers and 1,200 branches and operates 2,800 ATM’s. It is Australia’s largest provider of home loans. National Australia is the worlds 17th largest bank and operates 1,714 branches and 2,939 ATM’s

Main competitors to these big four are Bank of Queensland, Suncorp-Metway and Bendigo Bank. These form a strong second division with strong regional presence.

Very few foreign banks have a retail financial services presence. Most operate in the capital markets and corporate sector to facilitate business interests between countries. Of the few that do have retail banking operations, Bank of Cyprus Australia, Laiki Bank and Citibank Australia have the most branches.

As a testament to the strength of Australian Banking, Australia and New Zealand Bank was named the leading most sustainable bank in the world in the 2008. This is the second year in succession that ANZ has won the accolade when it shared the title with Westpac.

The Australian economy is starting to recover from the recession at a fast pace and recent forecasts have estimated a GDP growth of 3.5% for 2010. Stronger commodity prices and an end to the long running drought will help power Australian Banks profits.