BANK MERGERS

Evening Star, Issue 22261, 12 February 1936, Page 7

BANK MERGERS

AUSTRALIAN INSTITUTIONS QUESTION AGAIN RAISED THE COMPETITION ASPECT. The question of amalgamation among Australian banks was raised by a shareholder at the annual meeting in London of the Union Bank of Australia Limited. He said many shareholders were disappointed with the amount of the dividend, 5 Tier cent. In his opinion there were too many banks in Australia, and he suggested the possibility of amalgamation to reduce competition. The Hon. Edmund W. Parker, chairman of directors, said amalgamation had been considered before, but without result, although there was no reason why the search for a suitable scheme should not be continued. Unfortunately the times had been so bad that the ‘banks had been unable to eayn profits from which they could make larger returns to shareholders. Discussing hank amalgamation, the Melbourne ‘ Argus ’ states that in the last 15 years there has been a gradual reduction in the number of banks trading in Australia, and the Bank of Victoria, the Western Australian Bank, the Australian Bank of Commerce, and the Royal Bank of Australia have ceased to exist. Principal trading banks now number 10, not including the Commonwealth Bank, and they have hundreds of branches in active

competition. There may be some justification 4 for a further reduction by the merging of one, or possibly two, of the smaller banks with larger institutions, but this form of eliminating competition must _be approaching its end in Australia if the community is to have its financial needs ministered to under the best economic conditions. Any proposal for a reduction in the number of Australian banks must not bo allowed to cloud the wider issue of the best banking service at the lowest possible cost. There are six trading banks in Naw Zealand, and it is doubtful whither any mergers in Australia would af'ect New Zealand business. Two of the Now Zealand banks, the Bank of New Zealand and the National Bank of New Zealand Limited, are concerned chiefly with New Zealand business. The overseas banks operating here are the Bank of New South Wales, the Bank of Australasia, the Union Bank of Australia. Limited, and the Commercial Bank of , Australia Limited.