The chief of one of few remaining second tier banks has warned that the big banks’ dominance of the local market is increasing as the second tier of regional banks dwindles.
In a market update yesterday Suncorp acting CEO Chris Skilton warned that the remaining second tier banks were being sidelined into “large sophisticated building societies”, The Australian Financial Review reported.
After the acquisitions of Bankwest and St George by CBA and Westpac and the favour of the government’s wholesale funding guarantee tipping firmly in the direction of the big banks, the competitive edge of the second tier has largely been eroded.
Mr Skilton said it was impossible for banks like Suncorp to provide adequate competition to the majors.
“If Graeme Samuel [ACCC chairman] thinks that the regional banks are going to keep the big bastards honest then he’ll need to rethink that. It’s a bit like saying the corner shop is going to keep Woolworths honest in terms of pricing power,” he said.
Mr Skilton’s warnings come off the back of a report which revealed that just under three quarters of residential lending was held by the major banks in March this year. According to Core Data, the big banks, including Bankwest and St George, have control of 72.2 per cent of residential lending.
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