WHEN THE CHAMPAGNE STOPPED FLOWING
The champagne may have flowed prematurely when, 16 months ago, 16 foreign banks were invited to apply by the Australian Government for full banking status.
What seemed then a heaven-sent opportunity to get into a vibrant, resource-rich continent where members of the cosy oligopoly of domestic banks were among the world’s most profitable, has turned into a costly, highly competitive struggle.
“The new banks are definitely funding it harder than they expected,” said the head of one of them, Bill Gurry, chief executive of National Mutual Royal Bank.
Paul Espie, managing director of another newcomer, Bank of America Australia, concurred: “The new entrants are now more cautious, as the costs have been higher than anticipated and the revenue softer.”
And Rob Ferguson, managing director of Bankers Trust Australia, which opened in March, said: “At the time invitations were announced, all the banks were enthusiastic to do things here.
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