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The Australian banks emerged from the credit crisis with their reputations more or less in tact, unlike many of their international peers.

Australia's banking system has been ranked as one of the safest in the world by S&P, the credit rating agency.

The performance of banks has been an integral part of an economy's overall success in many countries. Their problems, with poor quality loans and dubious behaviour has also severely impacted the economic health of many countries.

Australia has been able to enjoy reasonably steady economic growth over the last 6 or 7 years, in part, because Australian banks were less imprudent with their lending practices. However, recent competition in the residential mortgage market has caused the regulator, the Australian Prudential Regulation Authority (APRA), to increase its monitoring of banks' housing lending. Whilst it notes that the level of what is called 'low-doc' lending (i.e. the borrower has to provide less paperwork in the way of credit history and evidence of ability to repay) remains very low, at less than one percent of loan approvals, there has been strong investor activity in the housing market. This has led the regulator to wonder whether lending practices are conservative enough for the current combination of strong house price growth, low interest rates and high levels of household debt.

APRA also notes that the amount of money banks have had to set aside for bad debts has also fallen recently and, for 2014 as a whole, it is expected to hit historically low levels. This has helped maintain returns on equity well above those in many other developed economies.

Overall, the Australian banking system has performed well, especially when set in a global context.

Where to find your new bank

australian-bank-branches-across-statesSource: APRA ADI Points of Presence June 2014

 

Australia's banking system is dominated by four major banks, though there are a number of regional and smaller organisations.

  • Commonwealth Bank
  • Westpac
  • National Australia Bank
  • Australia & New Zealand Banking Group

These form the cornerstone of the banking system, designed to ensure a strong degree of competition which is a long-standing government policy.

In fact, in the last few years, the government has enacted a series of reforms designed to increase competition and help Australians make better decisions about how to manage their money. What products do they offer and what do you need to know to choose your new bank?

All the main banks in Australia are very focused on offering services and products aimed at helping migrants make a smooth transition into their new home.

Here's the Emigration Store guide to banks in Australia.

australia-largest-banks-tableSource: FT Markets Data

 

Commonwealth Bank

Commonwealth Bank - Moving to Australia

Background

Founded in 1911 by the government, and for many years acting as the de-facto central bank, the Commonwealth bank (CBA) was fully privatised by the government in 1996. Having listed on the Australian Stock Exchange in 1991, it is now one of the largest companies listed Australia.

The bank offers an account opening service available in the UK. They estimate it takes around 10 minutes and that they will contact you within 48 business hours (is that 6 working days or do they mean 2 days – not sure!).

Once you arrive in Australia you will have to visit the branch that you have nominated to identify yourself.

Current Account

There are a variety of accounts which have combinations of debit card, electronic banking, internet banking and unlimited transactions. Most accounts have a monthly fee.

Credit Card

Commonwealth Bank offer a credit card as part of your application for a bank account. As you may expect, there are certain conditions including having a minimum income and having been granted a certain type of visa.

It should also be noted that, depending on your financial circumstances, your credit limit will vary, as will the annual fee.

Loan

Like a credit card application, if you income, employment and visa qualifications meet the required criteria, it is possible to apply for a loan. It can either be secured (on a car) or unsecured (fixed rate or variable rate).

Typically you can borrow between A$5k – A$50k with a length of up to seven years.

Financial Planning / Other Products

If you feel that you would benefit from advice on variety of matters such as UK pension transfer, moving money abroad or more general advice about the Australian financial system, wealth management, investments or insurance you can receive advice in the UK as well as in Australia.

 {newslinks 1,5,75,Important Australia Links}

Westpac Banking Corp

Westpac - Set up your banking before you arrive

Background

The origins of Westpac stretch back to 1817 when Australia's first bank, the Bank of New South Wales was established in Sydney. It became the Westpac Banking Corporation in 1982.

Today it forms part of Australia's 'big-four' banks with nearly 12 million customers and it is in the top five of companies by market capitalisation on the Australian Securities Exchange. Throughout its history it has been helping migrants settle into their new life 'down under' and today the bank likes to think of themselves as 'Australia's First Bank for Migrants'.

They have a history of actively seeking out migrants and have dedicated migrant teams throughout the world, including in the UK, India, Hong Kong and Singapore amongst other locations.

Current Account

Setting up a bank account before moving abroad can be a vital part of making your move as smooth as possible. Westpac will help you set up an account before you leave for Australia and will give you 12 months to complete the identification process (funds can't be accessed until this is complete).

There are two ways of doing this:

i) within six weeks of your arrival in Australia you will need to present your passport, provide your new residential address, proof of your visa and evidence that you arrived in Australia in the previous six weeks (after six weeks you will need to provide at least two forms of ID such as a birth certificate and passport).

ii) before departure, you can visit one of Westpac's offshore offices (in London for example) where a Westpac 'certifier' will examine the various documentation required to very or certify that you are the person opening the account.

If an identity check isn't completed within 12 months, the account will be frozen, including any assets, until a check is carried out.

There are various ways of accessing your account including Branch, ATM, Telephone, Online and Mobile app.

Westpac's standard account 'Choice' incurs no withdrawal fees at ATM's, no monthly service charge if you deposit at least A$2,000 monthly but A$5 a month if you don't (expats get the first 12 months free even with no monthly deposit).

Credit Card

There are a variety of choices for Credit Cards varying by low rates, rewards and annual fees. As there are 11 different credit card products, deciding which one is for you may prove a little tricky but the typical purchase interest rate is 19.99% per annum and annual fees range from A$75 to A$395 a year.

Loan

There are several different loan products, with amounts ranging from A$4,000 up to A$75,000 or A$100,000 for a car loan. A typical, unsecured personal loan currently has an interest rate of 14.69% per annum, a set-up fee of A$150 and a A$10 service fee monthly.

Financial Planning / Other Products

All the larger banks offer a wide range of different products and Westpac is no different. It offers home loans, investment advice, superannuation (basically your own fund that employers pay into over your working life) advice, financial planning, transferring pensions and insurance.

 

National Australia Bank

NAB - Migrant Banking

Background

National Australia Bank (NAB) can trace it roots back to 1858 and has grown through a number of acquisitions. You may not know that in 1987 it bought Clydesdale Bank in the UK and Yorkshire bank in 1990.

Nationally in Australia, it has over 3,400 ATM's and offers a full range of banking and wealth management solutions.

With dedicated migrant banking teams in its domestic market in Australia and New Zealand, as well as the UK, India, Hong Kong and Singapore, NAB is able to help you set up a bank account before you leave for Australia.

Current account

National Australia's standard account, the Classic Banking account, has no fees (either for the account or should you go overdrawn), a Visa debit card and multiple ways to access the account (Branch, ATM, Telephone, Internet and Mobile/Tablet App). Setting up the account generally takes between 2-5 working days. In 2008 NAB set up its own branchless direct bank known as UBank to help drive its policy of attracting new retail customers.

You can set up your accounts on a 'read-only' basis outside Australia but can only make withdrawals and payments after your arrival in Australia.

Credit Card

National Australia Bank has a range of different credit cards based on the rate you pay, the fee you pay or the desired reward partner. As an indication, the Low Fee card has an interest rate for purchases of around 19.5% and an annual fee of A$30. A Premium card (roughly equivalent to a Gold/Platinum card in the UK) has the same interest rate and an annual fee of A$90.

You don't need to be an Australian citizen to apply.

Loan

Personal Loans are available for amounts ranging from A$5,000 to A$55,000. They can be used for a range of purposes such as buying a car or consolidating other debts. You can apply online (it takes around 15 minutes) if you are an existing customer but the process will take longer if you don't bank with NAB.

There are fixed rate and variable rate options and an application fee of A$150. There are monthly Loan Service fees of around A$10 a month and late payment fees of A$35. These fees can make taking out a loan for relatively small amounts very expensive.

Financial Planning / Other Products

Along with the traditional products such as bank accounts, credit cards and loans, NAB also offers a wide range of other products including Insurance, Investments, Mortgages and Financial Planning.

Australia & New Zealand Banking Group

ANZ - Moving to Australia

Background

The Australia & New Zealand Banking Group (ANZ) was founded, under Royal Charter, in London in 1835 as the Bank of Australasia. After a series of mergers and acquisitions, it took on its current name in 1970. It wasn't until 1976 that the corporate headquarters were moved from the UK to Australia. It maintains a branch in London.

In Australia it has over 800 branches and over 2,300 cash points.

Current account

Setting up a bank account before you arrive in Australia is one important step to ensure that your move goes as smoothly as possible. Having almost immediate access to your money on arrival will be vital in those first few weeks as you endeavour to build your new life.

ANZ offers you a dedicated UK-based relationship advisor who will guide you through the process and open your account as well. They will also transfer money. Usually it takes 5 working days to set up and you can be set up with internet banking before you leave.

The standard ANZ account has a debit card, a A$5 monthly account service fee (waived if you deposit A$2,000 a month or meet their other eligibility criteria) and fees if you go overdrawn.

Credit Card

ANZ has a range of credit cards with Low Rates, Low Fees or Rewards.

A typical Low Fee card has a purchase interest rate of 19.74%, and a A$30 annual fee.
A typical Low Rate card has a purchase interest rate of 13.49% and a A$58 annual fee.
A typical rewards card has, alongside the reward points, a purchase interest rate of 18.79%, and a A$89 annual fee.

Loan

Personal loans are available with amounts from A$5,000 up to no maximum amount and loan terms up to 7 years. A typical interest rate is 14.09% per year with a Loan Approval fee of A$150 and a Loan Administration Charge of A$30, charged every 3 months.

Financial Planning / Other Products

Along with the traditional products such as bank accounts, credit cards and loans, ANZ also offers a wide range of other products including Insurance, Investments, Mortgages and Financial Planning.

Where To Live In Australia?