Reduced competition in banking sector ‘bad for business’

The head of the ACCC Graeme Samuel has said he is becoming increasingly concerned with the reduced competition in the banking sector, with recent bank mergers and the Federal Government’s guarantee’s to the big four banks, forcing a number of smaller lenders out of the market.

According to new research, in the first quarter of this year, 90 percent of new bank lending came from just two of the four major banks;  The Commonwealth Bank (with BankWest), accounted for 60 percent, while Westpac, with St George, accounted for 30 percent.

Samuel said they are noticing an “increasing gap between the big four on the one hand, the regional banks on the other,” and there would be “grave concerns about any further significant consolidation that saw the position of the big four banks … relative to the regional banks and the non-bank financial institutions, move any further away.”

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