“Market Cap $114.55 B As of May 2014
At a Glance
- Industry: Major Banks
- Founded: 1911
- Country: Australia
- CEO: Ian Narev
- Website: www.commbank.com.au
- Employees: 44,969
- Sales: $41.48 B
- Headquarters: Sydney
#49 Global 2000
- #215 in Sales
- #64 in Profit
- #44 in Assets
- #56 in Market value
Commonwealth Bank of Australia provides banking and financial services. The company provides range of banking and financial products and services to retail, small business, corporate and institutional clients. It provides financial services, including retail banking, premium banking, business banking, institutional banking, funds management, superannuation, insurance, investment and share broking products and services. The company operates its business under six segments: Retail Banking Services, Business and Private Banking, Institutional Banking and Markets, New Zealand, Bankwest and Other Divisions. The Retail Banking Services segment includes the origination of home loan, consumer finance and retail deposit products and the sales and servicing of all retail bank customers. In addition, commission is received for the distribution of business and wealth management products through the retail distribution network. The Business and Private Banking segment provides specialized banking services to relationship managed business and agribusiness customers, private banking to high net worth individuals and margin lending and trading through CommSec. In addition, commission is received for the distribution of retail banking products through the Business and Private Banking network. The Institutional Banking and Markets segment services the company’s major corporate, institutional and government clients, creating customized solutions based on specific needs, industry trends and market conditions. The Total Capital Solutions offering includes debt and equity capital rising, financial and commodities risk management and transactional banking capabilities. The New Zealand segment includes the banking, funds management and insurance businesses operating in New Zealand excluding the international business of Institutional Banking and Markets. The Bankwest segment is a full service bank active in all domestic market segments, with lending diversified between the business, rural, housing and personal markets, including a full range of deposit products. The Other Divisions segment includes international financial services Asia incorporates the Asian retail and SME banking operations, investments in Chinese and Vietnamese retail banks, the joint venture Chinese life insurance business and the life insurance operations in Indonesia. Commonwealth Bank of Australia was founded in 1911 and is headquartered in Sydney, Australia.“
“Commonwealth Bank History
Foundation and early history (1911–1941)
The Commonwealth Bank of Australia was founded by the Commonwealth Bank Act on 22 December 1911, introduced by the Andrew Fisher Labor Government, which favoured bank nationalisation. In a rare move for the time, the bank was to have both savings and general bank business. The bank was also the first bank in Australia to receive a Federal Government guarantee. The bank’s earliest and most strenuous proponent was the flamboyant American-Australian Labor politician, King O’Malley, and its first Governor was SirDenison Miller.
The bank opened its first branch in Melbourne on 15 July 1912.In an agreement with Australia Post that exists to this day, the bank also traded through post office agencies. In 1912, it merged with the state savings bank in Tasmania, and by 1913 it had branches in all six states.
In 1916, the bank moved its head office to Sydney. It also followed the Australian army into New Guinea, where it opened a branch inRabaul and agencies elsewhere.
In 1920, the bank took over from the Department of the Treasury the responsibility for the issue of Australian bank notes, the beginning of its acquisition of central bank powers.
In 1920, the Commonwealth Bank merged with the state savings bank in Queensland.
In 1931, the government transferred to the bank the savings bank business of the Government Savings Bank of New South Wales (est. 1871), and the current account and fixed deposit business of the Rural Bank Department. The bank also acquired the State Savings Bank of Western Australia (est. 1863).
Central Bank (1920–1960)
The bank’s role in central banking expanded gradually after 1920. In 1931, the bank board came into conflict with the Laborgovernment of James Scullin. The bank’s chairman Robert Gibson refused to expand credit in response to the Great Depression (as had been proposed by Treasurer Edward Theodore) unless the government cut pensions, which Scullin refused to do. Conflict surrounding this issue led to the fall of the government, and to demands from Labor for reform of the bank and more direct government control over monetary policy.
In 1942, the Commonwealth Banking Corporation (CBC) suspended its operations in Papua New Guinea as the Japanese Army captured many of the towns in which it operated, and bombed Port Moresby. The bank resumed operations later, possibly in 1944.
The bank had many branches across Papua New Guinea including Port Moresby, Boroko, Rabaul, Lae, Wau, Bulolo, Goroka, Kavieng, Madang, Mount Hagen, Kundiawa, Popondetta and Wewak. On Bougainville there was Kieta, Panguna, Arawa and early on a part-time sub branch at Loloho. The bank maintained those facilities to support trade, local business, government and small savers.
The Commonwealth Bank received almost all central bank powers in emergency legislation passed during World War II and at the end of the war it used this power to begin a dramatic expansion of the economy. This was also the aim of the government at the time, which attempted to compel the Australian states to conduct their banking with the Commonwealth under the Banking Act 1945 (Cth), but the High Court in Melbourne Corporation v Commonwealth (1947) 74 CLR 31, blocked this move. The government also colossally expanded immigration programmes. To respond to this, the bank established a Migrant Information Service (later known as the Australian Financial & Migrant Information Service, or AFMIS). The bank expanded during this period. In just five years it opened hundreds of branches throughout Australia and in 1951 it established a branch in the Solomon Islands.
In 1958 and 1959, there was a controversy concerning the dual function of the bank as the central bank on the one hand and a commercial bank on the other. As a result of this, the government split the bank, giving the central bank function to the Reserve Bank of Australia, with the Commonwealth Banking Corporation (CBC) retaining its commercial banking functions. These commercial functions were exercised by the CBCs constituent banks, the Commonwealth Trading Bank of Australia (CTB), the Commonwealth Savings Bank of Australia (CSB) and the newly formed Commonwealth Development Bank (CDB).
From 1958 to 1976 the Commonwealth Bank operated savings bank agencies in the New Hebrides.
A new Commonwealth Development Bank was established in 1960 and during the 1970s the bank diversified its business into areas like insurance and travel. It established a finance company, CBFC in 1974. The bank also became more heavily involved in foreign currency trading and international banking in general.
The bank actively supported the introduction of decimal currency in the years leading up to 1966 and, like most banks, it gradually converted its paper records onto a new computer-based system. The bank created the first credit card in Australia in 1974 when it established Bankcard. In later years the bank began offering MasterCards (1984) andVisa (1993) cards as well.
In 1974, as Papua New Guinea approached independence, the bank formally handed over its PNG operations to the newly created and government-owned Papua New Guinea Banking Corporation (PNGBC). The bank retained a restricted branch in Port Moresby that it finally closed in 1982.
In 1981 the bank transferred its operations in the Solomon Islands to the National Bank of Solomon Islands, which operated as a joint venture (51-49, Commonwealth and Government of the Solomon Islands).
In 1989 the bank acquired 75% of ASB Bank in New Zealand.
In 1991 the bank acquired the failing Victorian Government-owned State Bank of Victoria (est. 1842).
Privatisation and the Colonial merger (1990–2000)
Between 1991 and 1996 the Australian government fully privatised the Commonwealth Bank. The first share offer in 1991 was valued at $1,292 million, the second in 1993 for $1,700 million and the third was sold for $5,000 million in 1996. It is a public company, but one of the few such companies in Australia whose official name does not end in ‘Limited’.
In 1994 Commonwealth sold its shares in National Bank of Solomon Islands to Bank of Hawaii.
In 1994, Commonwealth took a 50% share in PT Bank International Indonesia.
On 10 March 2000, the Commonwealth Bank and Colonial Limited announced their intention to merge, with seven Commonwealth Bank shares being offered for twenty Colonial Shares. The merger received final approval from the Supreme Court of Victoria on 31 May 2000 and was completed on 13 June 2000. This brought into the fold Colonial’s stake inColonial National Bank, the former National Bank of Fiji. The bank also acquired the remaining 25% of ASB Bank.
Banking opportunities in Asia saw the Bank in 2000 acquire full ownership of PT Bank International Indonesia and rename it (PT Bank Commonwealth). This bank now has over 16 branches and has opened several FX shops to cater to Commonwealth Bank clients who are tourists in Bali.
The bank today (2001–present)
In 2005, the bank established strategic co-operation agreements with two Chinese banks, Jinan City Commercial Bank and Hangzhou City Commercial Bank; it took an 11% stake in Jinan City, and a 19.9% stake in Hangzhuo. Commonwealth also established a representative office in Bangalore, India.
On 27 January 2006, the bank acquired the remaining 49% stake in Colonial National Bank (Fiji)
At the beginning of 2008, Commonwealth Bank opened a branch in Ho Chi Minh City (Saigon). Then in October, Commonwealth announced that it had purchased Bankwest andSt Andrew’s Insurances from their parent company HBOS plc for A$2.1 billion. The acquisition is scheduled to be completed in early 2009, subject to regulatory approval. Lastly, on 24 December, Commonwealth announced that it had, in joint partnership with Aussie Home Loans, purchased Wizard Home Loans.As part of the deal, the Commonwealth Bank will acquire Wizard mortgages up to the value of A$4 billion. The Commonwealth Bank currently owns a 33% stake in Aussie. Commonwealth Bank held about 30 percent of the loan business of financial advisory company Storm Financial when it collapsed in January 2009.
In December 2009, Commonwealth sold Colonial National Bank to Bank of South Pacific.
The bank transferred their ATM service desk from HP Enterprise Services in Adelaide to ITS (Armaguard) in Sydney from March 2012. The bank will change from NCR andDiebold ATMs to Wincor Nixdorf ATMs over the coming years.
The bank is the only financial services organisation to appear in the Dream Employers’ top 20 list of preferred employers for 2010 and 2011.”
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “TheImaginationGroup“