Commonwealth Bank of Australia
From Wikipedia, the free encyclopedia
| Commonwealth Bank of Australia | |
 |
|
| Type | Public (ASX:CBA) |
|---|---|
| Founded | As a government bank (1911)
As a public company (1991) |
| Headquarters |  Sydney, Australia |
| Key people | Ralph Norris, CEO & Managing Director and Dr John Schubert, Chairman |
| Industry | Finance and Insurance |
| Products | Comprehensive and integrated range of financial products and services |
| Revenue |  $28.564 billion AUD (2006) |
| Subsidiaries | ASB Bank, Colonial First State Investments Limited, Sovereign Group Limited, CommSec and CommInsure |
| Slogan | Every days a new day |
| Website | www.commbank.com.au |
The Commonwealth Bank of Australia (ASX: CBA), is the 2nd largest financial institution in Australia and number 41st in the world (according to Fortune Global 500) [5] with businesses in New Zealand, Asia and the United Kingdom. Commonwealth Bank provides a variety of financial services including retail, business and institutional banking, funds management, superannuation, insurance, investment and broking services. Commonly referred to as the Commonwealth Bank (or Commbank), it was founded in 1911 by the Australian Government. The bank was listed on the Australian Stock Exchange in 1991 and was fully privatised in 1996. The Commonwealth Bank is now the fifth largest Australian public listed company on the Australian Stock Exchange. Commonwealth Bank of Australia brands include Colonial First State Investments Limited, ASB Bank (New Zealand), CommSec and CommInsure.
Contents |
[edit] History
[edit] Foundation and Early History (1911-1941)
The Commonwealth Bank of Australia was founded by an Australian Act of Parliament in 1911 called Commonwealth Bank Act. Bank Nationalisation was the policy of the Andrew Fisher Labor Government. In a rare move for the time, the bank was to have both savings and general bank business. The bank was also the first bank in Australia to receive a Federal Government guarantee. The bank's earliest and most strenuous proponent was the flamboyant American-Australian Labor politician, King O'Malley, and its first Governor was Sir Denison Miller.
The first branch (the Melbourne branch) of the bank opened on July 15, 1912. In an agreement with Australia Post that exists to this day, the bank also traded through post office agencies. In 1912 it merged with the state savings bank in Tasmania and by 1913 it had branches in all six states.
In 1916 the bank moved its head office to Sydney. It also followed the Australian army into New Guinea where it opened a branch in Rabaul and agencies elsewhere.
In 1920, the bank assumed the responsibility for the issue of Australian bank notes from the Department of Treasury, the beginning of its acquisition of central bank powers.
In 1920, the Commonwealth Bank merged with the state savings bank in Queensland.
In 1931 the government transferred to the bank the savings bank business of the Government Savings Bank of New South Wales (est. 1871) and the current account and fixed deposit business of the Rural Bank Department. The bank also acquired the State Savings Bank of Western Australia (est. 1863).
[edit] Central Bank (1920-1960)
The bank's role in central banking expanded gradually after 1920. In 1931, the bank board came into conflict with the Labor government of James Scullin. The bank's chairman Robert Gibson refused to expand credit in response to the Great Depression (as had been proposed by Treasurer Edward Theodore) unless the government cut pensions, which Scullin refused to do. Conflict surrounding this issue led to the fall of the government, and to demands from Labor for reform of the bank and more direct government control over monetary policy.
In 1942, the CBC suspended its operations in Papua New Guinea as the Japanese Army captured many of the towns in which it operated, and bombed Port Moresby. The bank resumed operations later, possibly in 1944.
The Commonwealth Bank received almost all central bank powers in emergency legislation passed during World War II and at the end of the war it used this power to begin a dramatic expansion of the economy. This was also the aim of the Government at the time, which colossally expanded immigration programmes. To respond to this, the bank established a Migrant Information Service. Predictably, the bank also expanded during this period, in just five years it opened hundreds of branches throughout Australia and in 1951 the bank established a branch in the Solomon Islands.
In 1958 and 1959, there was a controversy concerning the dual function of the bank as the central bank on the one hand and a general bank on the other. As a result of this, the bank was split, giving the reserve bank function to the Reserve Bank of Australia and the general bank function to the Commonwealth Banking Corporation.
From 1958 to 1976 the Commonwealth Bank operated savings bank agencies in the New Hebrides.
[edit] Diversification (1960-1983)
A new Commonwealth Development Bank was established in 1960 and during the 1970s the bank diversified its business into areas like insurance and travel. It established a finance company, the Commonwealth Bank Finance Corporation in 1974. The bank also became more heavily involved in foreign currency trading and international banking in general.
The bank actively supported the introduction of decimal currency in the years leading up to 1966 and, like most banks, it gradually converted its paper records onto a new computer-based system. The bank created the first credit card in Australia in 1974 when it established Bankcard. In later years the bank began offering Mastercards (1984) and Visa (1993) cards as well.
In 1974, as Papua New Guinea approached independence, the bank formally handed over its PNG operations to the newly created and government-owned Papua New Guinea Banking Corporation (PNGBC). The bank retained a restricted branch in Port Moresby that it finally closed in 1982.
In 1981 the bank transferred its operations in the Solomon Islands to the National Bank of Solomon Islands, which operated a joint venture (51-49, Commonwealth and Government of the Solomon Islands).
[edit] Deregulation (1983-1990)
[edit] Privatisation and the Colonial (1990-2001)
In 1989 the bank acquired 75% of ASB Bank in New Zealand.
In 1991 the bank acquired the State Bank of Victoria (est. 1842). Between 1991 and 1996 the Australian government fully privatised the bank.
In 1994 Commonwealth sold its shares in the National Bank of Solomon Islands to Bank of Hawaii.
On 10 March 2000, the Commonwealth Bank and Colonial First State Investments Limited announced their intention to merge, with seven Commonwealth Bank shares being offered for twenty Colonial Shares. The merger received final approval from the Supreme Court of Victoria on 31 May 2000 and was completed on 13 June 2000. This brought into the fold Colonial’s stake in Colonial National Bank, the former National Bank of Fiji. The bank also acquired the remaining 25% of ASB Bank.
[edit] The bank today (2000+)
Commonwealth Bank was awarded Bank of the Decade in November 1999 and also named Best Bank at the Australian Banking and Finance Awards for the years 1996, 2000 & 2002.
Banking opportunities in Asia saw the Bank acquire part ownership of Indonesian Bank (PT Bank) and establish strategic cooperation agreements with Chinese Banks Jinan City and Hangzhou City Commercial Banks. Recently, a representative office was established in Bangalore, India.
[edit] Environmental concerns
In 2002, the Commonwealth Bank came under fire by the Wilderness Society for its 16% stake in the controversial woodchipping company Gunns Limited, which is involved in the logging of old growth forests. The Commonwealth Bank has retorted that it does not itself hold any direct investment in Gunns Limited, but instead has invested in Gunns through its funds management businesses, on its behalf.[1] The Wilderness Society claims the Commonwealth Bank is the second biggest shareholder in Gunns, and at a Gunns shareholder general meeting in August 2003, the Commonwealth Bank has used its shareholder voting rights to vote against a resolution which would have stopped the company from destroying old growth forests[2].
Commonwealth also owns an 8.2% share in the Hazelwood power station[3], the most polluting power station[4] in Australia and the industrialised world.
[edit] Community Supports & Sponsorships
Commonwealth Bank’s national sport sponsorships include the Commonwealth Bank Trophy and the Netball Development Fund, the Commonwealth Bank Cricket Academy (Australian Cricket Academy), and Australian Women’s Cricket. Commonwealth Banks will sponsor Australia's one day international annual tri-series tournament from 06/07 to 08/09 cricket season.It is also a long-term sponsor of the Australian of the Year Awards.
Commonwealth Bank is also helps raising funds for medical research. Each year, with the Bank's support, the Breast Cancer Institute of Australia has produces the Australian Women's Health Diary, with all funds raised benefiting the organization. Sales of the diary have raised almost $3 million for the Cancer Institute of Australia with the Bank and it’s staff contributing more than $800,000.
Over the past three years the Bank contributed more than $158,000 to the Children’s Cancer Institute Australia by supporting their national fundraising and awareness campaign. The Bank is now working with Children’s Cancer Institute Australia to support their education and schools fundraising program.
Other organizations that the Bank supports includes Prostate Cancer Foundation of Australia, Australian Chamber Orchestra (ACO), Tasmanian Symphony Orchestra (TSO), Queensland Opera Company, Country Arts South Australia, Opera Australia, Council on the Ageing (COTA, NSW) (since 2001), and Wesley Mission (since 1997).
[edit] See also
- Reserve Bank of Australia
- State Bank of Victoria
- State Bank of New South Wales
- Australian Cricket Academy
- Commonwealth Bank Trophy
- ASB Bank
- List of Australian companies
[edit] References
- ^ Commonwealth Bank position on Gunns Limited, 9 October 2002. Accessed: 30 October 2006. [1]
- ^ The Wilderness Society: National Day of Action against the Commonwealth Bank. 29 Oct 2003. Accessed: 30 October 2006. [2]
- ^ Environment Australia: Corporate profile of Hazelwood power station. Accessed: 30 October 2006. [3]
- ^ WWF: Hazelwood tops international list of dirty power stations, 13 Jul 2005. [4]
[edit] External links
- Commonwealth Bank - Official site
- ASB Bank - ASB's official site
- Colonial First State Investments Limited
- CommInsure
- CommSec
- Commonwealth Bank Group ephemera digitised and held by the National Library of Australia
