Foreign Banks in Australia - Market Research Report (2013-2028)
Melbourne, Australia
Last Updated: October 2023
ANZSIC K6221bRevenue
$38.8bn
Past 5-Year Growth
Profit
$X.Xbn
Employees
12,336
Businesses
58
Wages
$X.Xbn
Foreign Banks in Australia industry analysis
The Foreign Banks industry includes domestic subsidiaries of foreign banks and branches of foreign banks, all of which have grown over the past few years as soaring interest rates contributed to a sharp revenue rise. The Reserve Bank of Australia (RBA) maintained a relatively low cash rate over much of the past decade – especially in response to the COVID-19 pandemic – to stimulate economic activity. In May 2022, this all changed when inflation rose quickly, leading to the fastest and largest hike cycle on record. The combination of these trends ensured a revenue explosion in 2022-23, especially after a decade of cheap money drove extensive private and corporate borrowing in Australia. Overall, industry revenue is expected to grow at an annualised 9.6% over the five years through 2023-24, to $38.8 billion. This includes anticipated 8.5% growth in the current year as interest rates continue their upward trend, albeit at a slower rate.
Trends and Insights
- A recent interest rate surge has sharply increased Australian foreign banks’ interest revenue. A record cycle of interest rate rises by the RBA has empowered foreign banks to also lift interest charged on existing loans.
- Home and term loan income has exploded as the cash rate rose sharply. As a result, foreign banks have managed to extract far higher interest income on their existing loans.
- Many foreign banks are clustered in Sydney, a financial hub with a built-up network of institutional talent. As foreign banks set up operations in Australia, they seek to access these pre-existing resources.
- Corporate banking is more competitive than retail banking. This trend has fragmented the industry’s market share because foreign banks are more likely than domestic banks to specialise in corporate banking.
Industry Overview
Market size and recent performance (2013-2028)
Industry revenue has grown at a CAGR of 9.6 % over the past five years, to reach an estimated $38.8bn in 2023.
Trends and Insights
Interest revenue exploded in after the RBA went on its fastest ever hiking cycle
- The size of a bank's loan book and the interest rates it charges largely dictate revenue. This dynamic makes cash rate movements are hugely important.
- Additional trends and insights available with purchase
Source: IBISWorld
Industry outlook (2024-2029)
Market size is projected to decline over the next five years.
Trends and Insights
Structurally higher interest rates are expected to affect banking performance over the coming years
- The RBA's historic cash rate hike cycle had a muted effect on Australia's economy. Higher interest rates have proved highly beneficial for banks because it hasn't corresponded with a borrowing downturn.
Biggest companies in the Foreign Banks in Australia
| Company | Market Share (%)
2024 | Revenue ($m)
2024 |
|---|---|---|
ING | 5,620.0 | |
HSBC Australia Holdings | 3,660.0 | |
Rabobank Australia | 1,282.0 |
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 Housing loans, Term loans and Other services. Housing loans is the largest segment of the Foreign Banks in Australia.
Trends and Insights
An unprecedented interest rate surge has sent term loan interest incomes soaring
- Term loans vary by the type of interest arrangement, maturity, securitisation and other characteristics. Large banks in this segment tend to be foreign branch banks that draw funds from their overseas parent.
- More insights available in the full report
Widen you competitive advantage with related industries
Competitors
- Credit Unions and Building Societies in Australia
- National and Regional Commercial Banks in Australia
- Investment Banking and Securities Brokerage in Australia
Complementors
- Funds Management Services in Australia
International industries
- Global Commercial Banks
- Commercial Banking in the US
- Savings Banks & Thrifts in the US
- Private Banking Services in the US
- Commercial Banking in Canada
Table of Contents
About this industry
Industry definition
The industry comprises the banking activities of foreign bank subsidiaries, branches and representative offices in Australia. Foreign banks generate revenue through interest income on loans and advances, and fee and commission income.
What's included in this industry?
Housing loansTerm loansAdditional banking servicesCompanies
INGHSBC Australia HoldingsRabobank AustraliaPurchase this report to view all 4 major companies in this industry.
Related Terms
SECURITISATIONFOREIGN BANK BRANCHESFOREIGN BANK SUBSIDIARIESNEOBANKIndustry Code
ANZSIC 6221 - Foreign Banks 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
A recent interest rate surge has sharply increased Australian foreign banks’ interest revenue. A record cycle of interest rate rises by the RBA has empowered foreign banks to...
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 (2013-2022) and forecast (2023-2028)
- Employees, including historical (2013-2022) and forecast (2023-2028)
- Businesses, including historical (2013-2022) and forecast (2023-2028)
- Profit, including historical (2013-2023)
- 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
Home and term loan income has exploded as the cash rate rose sharply. As a result, foreign banks have managed to extract far higher interest income on their existing loans.
In this chapter
- Products & Services
- Major Markets
Key metrics
- Largest market segment and value in 2023
- Product innovation level
Charts
- Products & services segmentation in 2023
- Major market segmentation in 2023
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
Many foreign banks are clustered in Sydney, a financial hub with a built-up network of institutional talent. As foreign banks set up operations in Australia, they seek to acc...
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 2023
Tables
- Number and share of establishments in each region in 2023
- Number and share of revenue each region accounts for in 2023
- Number and share of wages each region accounts for in 2023
- Number and share of employees in each region in 2023
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
Corporate banking is more competitive than retail banking. This trend has fragmented the industry’s market share because foreign banks are more likely than domestic banks to ...
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 2018-2023
- 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
Foreign banks with large residential lending portfolios have grown substantially since the RBA began hiking the cash rate in 2021-22. Loan interest income has soared, which l...
In this chapter
- Market Share Concentration
- Companies
- Company Spotlights
Charts
- Industry market share by company in 2019 through 2023
- Major companies in the industry, including market share, revenue, profit and profit margin in 2023
- Overview of ING's performance by revenue, market share and profit margin from 2017 through 2023
- Overview of HSBC Australia Holdings's performance by revenue, market share and profit margin from 2017 through 2023
- Overview of Rabobank Australia's performance by revenue, market share and profit margin from 2017 through 2023
- Overview of revenue, market share and profit margin trend for one additional company
Detailed analysis
- Description and key data for ING, and factors influencing its performance in the industry
- Description and key data for HSBC Australia Holdings, and factors influencing its performance in the industry
- Description and key data for Rabobank Australia, 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 cash rate is rising quickly, boosting industry-wide revenue. Although cash rate rises are set to slow in 2023-24, they are still trending upwards, which will lift foreign...
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 (2013-2028)
- Assistance historical data and forecast (2013-2028)
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
A sharp interest expense jump has weighed on profit margins. Despite higher home and term loan revenue, foreign banks have faced a sharp funding cost hike, which eroded indus...
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 2023
- Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2023
- Investment vs. share of economy
Data tables
- Cash Flow & Debt Service Ratios (2013-2028)
- Revenue per Employee (2013-2028)
- Revenue per Enterprise (2013-2028)
- Employees per Establishment (2013-2028)
- Employees per Enterprise (2013-2028)
- Average Wage (2013-2028)
- Wages/Revenue (2013-2028)
- Establishments per Enterprise (2013-2028)
- IVA/Revenue (2013-2028)
- Imports/Demand (2013-2028)
- Exports/Revenue (2013-2028)
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 (2013-2028)
- IVA (2013-2028)
- Establishments (2013-2028)
- Enterprises (2013-2028)
- Employment (2013-2028)
- Exports (2013-2028)
- Imports (2013-2028)
- Wages (2013-2028)
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 Foreign Banks industry in Australia in 2024?
The market size of the Foreign Banks industry in Australia is $38.8bn in 2024.
How many businesses are there in the Foreign Banks in Australia industry in 2023?
There are 58 businesses in the Foreign Banks industry in Australia, which has grown at a CAGR of 1.8 % between 2018 and 2023.
Has the Foreign Banks industry in Australia grown or declined over the past 5 years?
The market size of the Foreign Banks industry in Australia has been growing at a CAGR of 9.6 % between 2018 and 2023.
What is the forecast growth of the Foreign Banks industry in Australia over the next 5 years?
Over the next five years, the Foreign Banks industry in Australia is expected to decline.
What are the biggest companies in the Foreign Banks market in Australia?
The biggest companies operating in the Foreign Banks market in Australia are ING, HSBC Australia Holdings and Rabobank Australia
What does the Foreign Banks in Australia include?
Housing loans and Term loans are part of the Foreign Banks industry.
Which companies have the highest market share in the Foreign Banks in Australia?
The company holding the most market share in Australia is ING.
How competitive is the Foreign Banks industry in Australia?
The level of competition is high and increasing in the Foreign Banks industry in Australia.
