Big Four (banking)
Big Four is the colloquial name for the four main banks in several countries, where the banking industry is dominated by just four institutions and where the phrase has gained currency.
Australia/New Zealand
In Australia, the "big four banks" refers to the four largest banks[1] by market share, who between them hold 80% of the home loan markets in the country. In 2012, their combined total asset is A$2.66 trillion, which is about 200% of Australian GDP in 2011. These are:
- National Australia Bank
- Commonwealth Bank (CBA) (government owned until 1996)
- Westpac
- Australia and New Zealand Banking Group, or ANZ
A longstanding policy of the federal government in Australia has been to maintain this status quo, called the "four pillars policy". The policy has been maintained through the Global Recession of 2008–09, as Westpac acquired St.George Bank and the Commonwealth Bank acquired Bankwest, reinforcing the special status of the "big four".
Being New Zealand's closest neighbour, with very close ties culturally and economically, has helped Australia dominate the banking sector there. Often referred to collectively as the 'big banks'[2][3][4] or the 'big Aussie banks', the "Big Four" Australian banks also dominate the New Zealand banking sector in the form of:
- Australia and New Zealand Banking Group, or ANZ, also comprising the former business of The National Bank.
- ASB Bank, formerly Auckland Savings Bank, wholly owned by the Commonwealth Bank
- The Bank of New Zealand (BNZ), wholly owned by the National Australia Bank
- Westpac, formerly known as WestpacTrust after a merger with the Trust Bank.
Together they hold over 90% of gross loans and advances in New Zealand [5] as well as close to 90% of all mortgages.[6]
These four subsidiaries are massively profitable and in some cases even outperform the Australian parent company.[7] The extent to which they dominate the banking sector can be seen in profits: In the 2012/2013 financial year, the largest of the Big Banks, ANZ New Zealand, made a profit of NZ$1.37 billion. The smallest, BNZ, made a profit of NZ$695 million.[2] State-owned Kiwibank, community trust-owned TSB Bank, SBS Bank (formerly Southland Building Society) and Heartland Bank, the next four largest banks by profit, made NZ$97 million,[8] NZ$73.5 million,[9] NZ$14 million[10] and NZ$7 million (albeit with an underlying result of about NZ$30 million) respectively.[11] In other words, the profit of New Zealand's next four largest banks (after the Big Four) is equal to less than 30% of the smallest of the Big Four, BNZ.
China
During the 1920s, the term “Big Four” applied to the Four Northern Banks of the Republic of China (i.e. the four most capitalized commercial banks in Northern China).[12] These were the Yien Yieh Commercial Bank, the Kincheng Banking Corporation, the Continental Bank and The China & South Sea Bank. These were contrasted with the Three Southern Banks of Southern China.
By 1949, the Big Four banks were the Bank of China, the Bank of Communications, the Central Bank of China and the Farmers Bank of China. All four were state-owned banks. These four, together with Central Trust of China, Postal Savings and Remittance Bureau of China, Central Cooperative Treasury of China, were called the "Four Banks, Two Bureaus, One Treasury" or "四行两局一库".[13]
Currently, in the People's Republic of China, the Big Four commercial banks ("四大商业银行") are:
- Bank of China
- China Construction Bank
- Industrial and Commercial Bank of China
- Agricultural Bank of China
and have been described as such in the western press. All four are state-controlled banks with commercial banking operations.
Ireland
In Ireland, the term "big four" applies to the four largest banks by market capitalisation.[14][15] These all operate in both the Republic of Ireland and Northern Ireland, and have a wider international presence.[16]
- Bank of Ireland
- Allied Irish Banks (operates as First Trust Bank in Northern Ireland[17])
- National Irish Bank (operated as Northern Bank in Northern Ireland[18]) - Irish Branch of Danske Bank since 2007.
- Ulster Bank - Subsidiary of The Royal Bank of Scotland Group since 2000/2001.
With the recent announcement that Danske Bank are to reduce their operations in the Republic of Ireland, many in the industry have argued that KBC Bank Ireland have replaced them as part of the Big Four Banks.[citation needed]
South Africa
In South Africa, the "big four" are:[19]
- Standard Bank (Not related to Standard Chartered Bank)
- FirstRand Bank (operators of First National Bank)
- Nedbank - owned by Old Mutual.
- Absa Group - majority owned by Barclays since 2005; remainder owned by the public.
Sweden
In Sweden, the "big four" are:[20]
United Kingdom
In relation to the United Kingdom, the phrase "big four banks" is currently used to refer to the four largest UK-based banking groups, being:
During most of the 20th century, the phrase "big four banks" was used to refer to the four largest UK clearing banks (institutions which clear bankers' cheques), which in
England and Wales were:
- Barclays Bank (part of Barclays);
- Midland Bank (now HSBC Bank and part of HSBC);
- Lloyds Bank (part of Lloyds Banking Group); and
- National Westminster Bank ("NatWest") (now part of The Royal Bank of Scotland Group).
Scotland were:
- The Royal Bank of Scotland ("RBS") (now part of The Royal Bank of Scotland Group);
- Bank of Scotland (part of Lloyds Banking Group);
- Clydesdale Bank (part of National Australia Group); and
- TSB (part of Lloyds Banking Group).
United States
In the United States, the "big four" banks hold 39% of all U.S. customer deposits (as of 2009), and consist of:[24][25]
- JPMorgan Chase (headquartered in New York City, bank chartered in Columbus, Ohio)
- Bank of America (headquartered and bank chartered in Charlotte)
- Citigroup (headquartered in New York City, bank chartered in Sioux Falls, SD)
- Wells Fargo (headquartered in San Francisco, bank chartered in Sioux Falls, SD)
From a purely retail banking perspective, U.S. Bancorp (headquarters in Minneapolis, MN/bank charter Cincinnati, Ohio) and PNC Financial Services (headquarters in Pittsburgh, PA/bank charter Wilmington, DE) both have significantly more branches than Citibank, the retail banking arm of Citigroup.[26] However, Citibank still has significantly more assets than U.S. Bancorp and PNC.[27]
See also
- Big Five (banks), Canada
References
- ^ "Big four banks lower fixed rates - ABC News (Australian Broadcasting Corporation)"
- ^ a b "NZ's big banks record $3.5b profit - Business - NZ Herald News",
- ^ http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10742977
- ^ http://www.stuff.co.nz/taranaki-daily-news/business/7932338/Big-Four-banks-New-Zealand-profit-up-20-per-cent-this-year
- ^ http://www.kpmg.com/NZ/en/IssuesAndInsights/ArticlesPublications/FIPS-quarterly/Documents/KPMG-FIPS-Quarterly-June-2013.pdf
- ^ http://www.interest.co.nz/news/58613/kiwibank-has-largest-mortgage-market-share-percentage-growth-2011-anz-nz-adds-most-volume
- ^ http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10745478
- ^ http://www.stuff.co.nz/business/industries/9094228/Kiwibank-lifts-profit-as-customer-base-expands
- ^ http://www.radionz.co.nz/news/business/136518/tsb-profit-rises-despite-mortgage-market-competition
- ^ http://www.radionz.co.nz/news/business/138649/sbs-bank-lifts-annual-net-profit-nearly-22-percent
- ^ http://www.radionz.co.nz/news/business/217905/heartland-sees-core-growth
- ^ Four Northern Banks
- ^ Yao Sui: Chinese Finance History, High Education Publisher in 2007, Beijing. (in Chinese: 《中国金融史》，姚遂主编，高等教育出版社，2007年版)
- ^ "Anglo Irish Bank Corporation (Executive Summary)". SME Financial. Retrieved 2012-01-17 "...The only banks with higher market capitalisation were Allied Irish Banks (AIB) and Bank of Ireland, both with strong retail and commercial presences. Ulster Bank and National Irish Bank are the other members of the ‘Big Four’ retail and commercial banks, both owned by overseas parents and not listed on the Irish Stock Exchange".
{{cite web}}: Check date values in:|accessdate=(help) - ^ Hardiman, Cyril (12 February 2005). "'Big Four' Northern banks face probe on pricing and competition claims". Irish Independent. Retrieved 2012-01-22.
- ^ "Cross-Border Personal Banking in Ireland" (PDF). Centre for Cross-Border Studies. Retrieved 2012-01-22.
- ^ "AIB's First Trust refunds £350,000 to customers over fee error". TheJournal.ie. Retrieved 2012-01-17.
- ^ "Northern Bank to close four branches". BBC News. 16 January 2012. Retrieved 17 January 2012.
- ^ "Banks and foreign exchange in SA". SouthAfrica.info. Brand South Africa. Retrieved 28 June 2012.
- ^ Östlund, Carl-Viggo. "Kunderna gisslan hos storbankerna (The customers held hostage by the big banks) (swedish)". Aftonbladet.se.
- ^ "UK banks prepare for inevitable shake-up - sources". Reuters. 1 September 2011. Retrieved 17 September 2011.
- ^ "UK to prioritise taxpayers as bank shake-up looms". Reuters. 10 April 2011. Retrieved 17 September 2011.
- ^ The Big Four by D Rogers
- ^ "Citigroup posts 4th straight loss; Merrill loss widens". USA Today. Associated Press. October 16, 2008. Retrieved December 17, 2009.
- ^ Temple, James (November 18, 2008). "Bay Area job losses likely in Citigroup layoffs". The San Francisco Chronicle. Archived from the original on 5 December 2009. Retrieved December 17, 2009.
{{cite news}}: Unknown parameter|coauthors=ignored (|author=suggested) (help); Unknown parameter|deadurl=ignored (|url-status=suggested) (help) - ^ Banks Ranked by Number of Branches
- ^ Banks Ranked by Total Assets