Finance in Australia - Market Research Report (2014-2029)
Melbourne, Australia
Last Updated: May 2024
ANZSIC K6200Revenue
$422.9bn
Past 5-Year Growth
Profit
$XXX.Xbn
Employees
242k
Businesses
61,032
Wages
$XX.Xbn
Finance in Australia industry analysis
The Finance sector's operating environment was previously characterised by record-low interest rates. Nonetheless, high inflation prompted the Reserve Bank of Australia (RBA) to hike the cash rate from May 2022 onwards. This shift allowed financial institutions to impose higher charges on loans, propelling their revenue. Banks managed to raise interest rates quicker than funding costs in the first half of 2022-23, boosting net interest margins. The introduction of the Term Funding Facility (TFF) also provided financial institutions with access to cost-effective funding, contributing to their profit margin in recent years.
Trends and Insights
- To effectively compete with fintech firms and neobanks, financial institutions are investing heavily in digital offerings, RegTech and cybersecurity. This digital transformation aims to enhance customer experiences, cater to dynamic customer needs and safeguard sensitive information.
- Despite economic instability causing a temporary slowdown in the business loan sector, demand shows signs of recovery. Thanks to the robust job market and substantial business investments, banks have experienced significant growth in their business lending portfolios this past year.
- New South Wales and Victoria are home to the nation’s four largest banks. The level of financial activity and client businesses in Melbourne and Sydney make both states attractive bases of operations.
- Fintech platforms offer solutions like peer-to-peer lending and challenge traditional banking. Despite offering cost savings and speed, these platforms carry higher credit risk and lack regulatory protections offered by traditional banks.
Industry Overview
Market size and recent performance (2014-2029)
Industry revenue has grown at a CAGR of 4.0 % over the past five years, to reach an estimated $422.9bn in 2024.
Trends and Insights
Intense competition from neobanks and mutual banks are threatening the Big Four's status quo
- The four major banks' subdivision market share has fallen slightly in recent years as they have faced heightened competition from smaller lenders, non-bank lenders and other disruptors in the mortgage market.
- Additional trends and insights available with purchase
Source: IBISWorld
Industry outlook (2024-2029)
Market size is projected to grow over the next five years.
Trends and Insights
Big Four will accelerate tech investments to counter neobanks and fintech firms
- Investments in technology within the industry are set to escalate and will be crucial in managing expenses. Partnerships with technology providers will also become more prevalent. Collaborations can foster the development of tech-forward solutions and applications that can enhance customer convenience, reduce operational costs and boost efficiency.
Biggest companies in the Finance in Australia
| Company | Market Share (%)
2024 | Revenue ($m)
2024 |
|---|---|---|
NAB | 49,170.2 | |
Commonwealth Bank of Australia | 45,023.7 | |
Westpac | 43,910.5 |
To view the market share and analysis for all 4 top companies in this industry, view purchase options.
Products & Services Segmentation
Source: IBISWorld
Industry revenue is measured across several distinct product and services lines, including Home loans, Business loans and Consumer credit. Home loans is the largest segment of the Finance in Australia.
Trends and Insights
Government initiatives have spurred demand for home loans
- Home loans are issued to homebuyers, and the loans can be split between owner-occupiers and investors. These loans are regularly secured against the purchased dwelling and may possess various features to suit different needs.
- More insights available in the full report
Widen you competitive advantage with related industries
Competitors
- There are no industries to display.
Complementors
- Credit Unions and Building Societies in Australia
- Non-Depository Financing in Australia
- Money Market Dealers in Australia
- National and Regional Commercial Banks in Australia
International industries
- Global Commercial Banks
- Commercial Banking in the US
- Banking in New Zealand
- Banks in the UK
Table of Contents
About this industry
Industry definition
The Finance subdivision covers firms that provide banking, finance and investment trust services in Australia. The most significant industries in the Finance subdivision are domestic banks, foreign banks, non-depository financiers and financial asset investors.
What's included in this industry?
Home loansBusiness LoansConsumer credit loanDeposits, transaction accounts and trustsCompanies
NABCommonwealth Bank of AustraliaWestpacPurchase this report to view all 4 major companies in this industry.
Related Terms
TERM FUNDING FACILITYFUNDS UNDER MANAGEMENTLOAN LOSS PROVISIONSNET INTEREST MARGINMUTUAL BANKSIndustry Code
ANZSIC 62 - Finance in Australia
Performance
Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.
Analyst insights
To effectively compete with fintech firms and neobanks, financial institutions are investing heavily in digital offerings, RegTech and cybersecurity. This digital transformat...
In this chapter (4)
- Current Performance
- Outlook
- Volatility
- Life Cycle
Key metrics
- Annual Revenue, Recent Growth, Forecast, Revenue Volatility
- Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
- Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
- Total Profit, Profit Margin, Profit per Business
Charts
- Revenue, including historical (2014-2023) and forecast (2024-2029)
- Employees, including historical (2014-2023) and forecast (2024-2029)
- Businesses, including historical (2014-2023) and forecast (2024-2029)
- Profit, including historical (2014-2024)
- Industry Volatility vs. Revenue Growth
- Industry Life Cycle
Detailed analysis
- Trends in supply, demand and current events that are driving current industry performance
- Expected trends, economic factors and ongoing events that drive the industry's outlook
- Key success factors for businesses to overcome volatility
- How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.
Products and Markets
Learn about an industry's products and services, markets and trends in international trade.
Analyst insight
Despite economic instability causing a temporary slowdown in the business loan sector, demand shows signs of recovery. Thanks to the robust job market and substantial busines...
In this chapter
- Products & Services
- Major Markets
Key metrics
- Largest market segment and value in 2024
- Product innovation level
Charts
- Products & services segmentation in 2024
- Major market segmentation in 2024
Detailed analysis
- Trends impacting the recent performance of the industry's various segments
- Innovations in the industry's product or service offering, specialization or delivery method
- Key factors that successful businesses consider in their offerings
- Buying segments and key trends influencing demand for industry products and services
Geographic Breakdown
Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.
Analyst insights
New South Wales and Victoria are home to the nation’s four largest banks. The level of financial activity and client businesses in Melbourne and Sydney make both states attra...
In this chapter (1)
- Business Locations
Charts
- Share of revenue, establishment, wages and employment in each region
- Share of population compared to establishments in each region in 2024
Tables
- Number and share of establishments in each region in 2024
- Number and share of revenue each region accounts for in 2024
- Number and share of wages each region accounts for in 2024
- Number and share of employees in each region in 2024
Detailed analysis
- Geographic spread of the industry across Asia Pacific, and trends associated with changes in the business landscape
- Key success factors for businesses to use location to their advantage
Competitive Forces
Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.
Analyst insights
Fintech platforms offer solutions like peer-to-peer lending and challenge traditional banking. Despite offering cost savings and speed, these platforms carry higher credit ri...
In this chapter (4)
- Concentration
- Barriers to Entry
- Substitutes
- Buyer & Supplier Analysis
Key metrics
- Industry concentration level
- Industry competition level and trend
- Barriers to entry level and trend
- Substitutes level and trend
- Buyer power level and trend
- Supplier power level and trend
Charts
- Market share concentration among the top 4 suppliers from 2019-2024
- Supply chain including upstream supplying industries and downstream buying industries, flow chart
Detailed analysis
- Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
- Key success factors for businesses to manage the competitive environment of the industry.
- Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
- Key success factors for potential entrants to overcome barriers to entry.
- Competitive threats from potential substitutes for the industry’s own products and services.
- Key success factors for how successful businesses can compete with substitutes.
- Advantages that buyers have to keep favorable purchasing conditions.
- Advantages that suppliers have to maintain favorable selling conditions.
- Key success factors for how businesses can navigate buyer and supplier power.
Companies
Learn about the performance of the top companies in the industry.
Analyst insights
The Big Four banks are expanding their digital offerings, as demonstrated by initiatives like ANZ Plus, Unloan and UBank. This strategic move seeks to combat competition from...
In this chapter
- Market Share Concentration
- Companies
- Company Spotlights
Charts
- Industry market share by company in 2020 through 2024
- Major companies in the industry, including market share, revenue, profit and profit margin in 2024
- Overview of NAB's performance by revenue, market share and profit margin from 2018 through 2024
- Overview of Commonwealth Bank of Australia's performance by revenue, market share and profit margin from 2018 through 2024
- Overview of Westpac's performance by revenue, market share and profit margin from 2018 through 2024
- Overview of revenue, market share and profit margin trend for one additional company
Detailed analysis
- Description and key data for NAB, and factors influencing its performance in the industry
- Description and key data for Commonwealth Bank of Australia, and factors influencing its performance in the industry
- Description and key data for Westpac, and factors influencing its performance in the industry
- Description, key data and performance trends for one additional company
External Environment
Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.
Analyst insights
The banking royal commission shook up the sector and had several flow-on effects. The commission's findings led to the Federal Government adopting several recommendations to ...
In this chapter
- External Drivers
- Regulation & Policy
- Assistance
Key metrics
- Regulation & policy level and trend
- Assistance level and trend
Charts
- Regulation & Policy historical data and forecast (2014-2029)
- Assistance historical data and forecast (2014-2029)
Detailed analysis
- Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
- Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
- Key governmental and non-governmental groups or policies that may provide some relief for industry operators.
Financial Benchmarks
View average costs for industry operators and compare financial data against an industry's financial benchmarks over time.
Analyst insights
Financial institutions are experiencing higher profit margins thanks to cash rate hikes. The higher cash rate has enabled lenders to lift their lending rates faster than thei...
In this chapter
- Cost Structure
- Financial Ratios
- Key Ratios
Key metrics
- Profit margin, and how it compares to the sector-wide margin
- Average wages, and how it compares to the sector-wide average wage
- Largest cost component as a percentage of revenue
- Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio
Charts
- Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
- Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2024
- Investment vs. share of economy
Data tables
- Cash Flow & Debt Service Ratios (2014-2029)
- Revenue per Employee (2014-2029)
- Revenue per Enterprise (2014-2029)
- Employees per Establishment (2014-2029)
- Employees per Enterprise (2014-2029)
- Average Wage (2014-2029)
- Wages/Revenue (2014-2029)
- Establishments per Enterprise (2014-2029)
- IVA/Revenue (2014-2029)
- Imports/Demand (2014-2029)
- Exports/Revenue (2014-2029)
Detailed analysis
- Trends in the cost component for industry operators and their impact on industry costs and profitability
Key Statistics
Industry Data
Data Tables
Including values and annual change:
- Revenue (2014-2029)
- IVA (2014-2029)
- Establishments (2014-2029)
- Enterprises (2014-2029)
- Employment (2014-2029)
- Exports (2014-2029)
- Imports (2014-2029)
- Wages (2014-2029)
Methodology
How are IBISWorld reports created?
IBISWorld has been a leading provider of trusted industry research for over 50 years to the most successful companies worldwide. With offices in Australia, the United States, the United Kingdom, Germany and China, we are proud to have local teams of analysts that conduct research, data analysis and forecasting to produce data-driven industry reports.
Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.
IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.
What data sources do IBISWorld analysts use?
Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.
Key data sources in Australia include:
- Australian Bureau of Statistics
- Australian Taxation Office
- Australian Securities & Investments Commission
Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.
These sources include:
- Industry and trade associations
- Industry federations or regulators
- Major industry players annual or quarterly filings
Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.
How does IBISWorld forecast its data?
IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.
IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools. We are proud to be the keystone source of industry information for thousands of companies across the world.
Learn more about our methodology and data sourcing on the Help Center.
Frequently Asked Questions
Unlock comprehensive answers and precise data upon purchase. View purchase options.
What is the market size of the Finance industry in Australia in 2024?
The market size of the Finance industry in Australia is $422.9bn in 2024.
How many businesses are there in the Finance in Australia industry in 2024?
There are 61,032 businesses in the Finance industry in Australia, which has grown at a CAGR of 5.3 % between 2019 and 2024.
Has the Finance industry in Australia grown or declined over the past 5 years?
The market size of the Finance industry in Australia has been growing at a CAGR of 4.0 % between 2019 and 2024.
What is the forecast growth of the Finance industry in Australia over the next 5 years?
Over the next five years, the Finance industry in Australia is expected to grow.
What are the biggest companies in the Finance market in Australia?
The biggest companies operating in the Finance market in Australia are NAB, Commonwealth Bank of Australia and Westpac
What does the Finance in Australia include?
Home loans and Business Loans are part of the Finance industry.
Which companies have the highest market share in the Finance in Australia?
The company holding the most market share in Australia is NAB.
How competitive is the Finance industry in Australia?
The level of competition is high and increasing in the Finance industry in Australia.
