Interesting times: Out of cycle interest rate hikes have supported industry revenue growth

The Foreign Banks industry has reversed its fortunes over the past five years. Following a decline in the cash rate to historic lows in August 2016, out of cycle interest rate hikes by most banks have since supported industry growth. This has been as a result of overall higher funding costs for the banking sector. Growing investment from overseas and the rising globalisation of businesses has further contributed to industry growth over the period. Overall, industry revenue is expected to rise at an annualised 1.5% over the five years through 2018-19, to total $19.2 billion. This includes a projected rise of 4.8% over the current year, driven by rising interest rates and the increasing presence of foreign banks in the local market...read more.

Industry Statistics & Market Size
Revenue
$19bn
Annual Growth 14-19
1.5%
Forecast Growth 19-24
Profit
Employment
13,267
Businesses
50

Industry Threats & Opportunities

  • Growing investment from overseas and rising globalisation of businesses has boosted the industry
  • Foreign banks are at a disadvantage compared with local banks due to lending regulations
  • Rising competition from domestic banks and neobanks has the potential to limit industry growth
  • Industry Report - Industry Locations Chapter

    Business locations in the Foreign Banks industry are made up by bank branches and headquarters, as this represents the reach and geographic distribution of their operations. However, a large number of foreign banks have only set up back-office operations in Australia, with business conducted by phone or through online platforms. Sydney is Australia's finance capital and has been of growing significance as a regional financial hub in the Asia-Pacific region. As a result, New South Wales accounts for most of the industry establishments.The banks are generally located close to major markets, which is primarily made up of the corporate and financial intermediaries market. Unl...purchase to read more.

    Additional Insights for the Foreign Banks Industry

    IBISWorld has determined the most important Key Success Factors for the Foreign Banks are:

  • Superior financial management and debt management
  • Ability to raise revenue from additional sources
  • Membership of joint marketing/distribution operations
  • IBISWorld analysts also discuss how external factors such as Cash rate and Business confidence index in the Foreign Banks industry impact industry performance..

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    What's in this report

    What is the Foreign Banks Industry?

    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.

    Industry Products
  • Housing loans
  • Term loans
  • Industry Activities
  • Development bank operation
  • Savings bank operation
  • Trading bank operation
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Cash rate
  • Business confidence index
  • Household consumption expenditure
  • Total capital expenditure
  • Residential property yields

  • Current Performance
  • Revenue and assets
  • Profitability improves
  • Foreign bank restrictions
  • Emerging Asian operators
  • Chart: Revenue Growth

  • Industry Outlook
  • Banking sector
  • Increasing competition
  • Operational changes
  • Table: Foreign Banks Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Foreign Banks Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Construction
  • Consumers

  • Key Selling Industries
  • Accounting Services
  • Finance
  • Legal Services

  • Products & Services
  • Other
  • Term loans
  • Housing loans
  • Chart: Foreign Banks Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Corporate clients
  • Private clients
  • Other markets
  • Chart: Major Market Segmentation for the Foreign Banks Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Interest expenses
  • Wages
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Foreign Banks

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Foreign Banks Industry

  • Industry Globalization
    ING Bank (Australia) Limited, Citigroup Pty Limited, HSBC Australia Holdings Pty Limited,
  • Table: ING Bank (Australia) Limited - financial performance
  • Table: Citigroup Pty Limited - financial performance
  • Table: HSBC Australia Holdings Pty Limited - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Foreign Banks Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Foreign Banks Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)
  • Total Assets (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Foreign Bank Branches
  • Banks that are licensed to conduct banking business in Australia through branches, but with a restriction on accepting retail deposits.
  • Foreign Bank Subsidiaries
  • Locally incorporated companies that have a licence to collect retail deposits of less than $250,000.
  • Neobank
  • A technology-driven bank that is established and operated digitally, without a traditional branch network.
  • Securitisation
  • The act of producing investment securities from cashflows from specific assets.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Foreign Banks market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Foreign Banks:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Foreign Banks market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Foreign Banks, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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