Australian Government Withdraws Bank Guarantees

It looks like easy times are over for banks in Australia, as the federal government announced it is withdrawing its wholesale guarantee and deposit support, which should generate healthy competition among the major banks concerning financial services offered.

That should also force the banks to start searching for and developing a variety of ways to generate revenue.

The four major banks in Australia enjoyed a period of reduced competition, allowing them to increase market share in deposits, mortgages, credit cards and small-business loans.

What the major banks are looking at is the lucrative wealth management sector, where there is huge potential in, which many not be repeated for a long time. The winner of that sweepstakes could emerge as the top banking dog in Australia going forward.

Banks have been preparing for this opportunity over the last couple of years by increasing their capital base to be ready to grow in the sector through strategic acquisitions.