What bank is affiliated with Bankwest?

Who owns who?

The issue of bank ownership has hit the headlines with the recent announcement that industry super fund-owned ME Bank is being purchased by Bank of Queensland (BoQ). ME will join Virgin Money Australia as part of the BoQ stable of brands.

It follows the news that NAB, which already owns online bank UBank, has extended its line-up to include neobank 86 400.

And don't be fooled by those cute green dragons of St George Bank, or the hometown feel of Bank SA. Both are owned by Westpac - as is Bank of Melbourne, BT and RAMS.

The Commonwealth Bank certainly doesn't operate in isolation. It owns Bankwest plus Aussie Home Loans, and in late 2020 CommBank announced a merger between Aussie and online home loan platform Lendi.

Australia's fifth-largest bank - Bendigo Bank, owns several brands including Adelaide Bank, UpBank, and Delphi Bank.

Does it matter that your bank is bedfellows with another?

There is a potential downside to holding accounts with banks that are subsidiaries of the same major brand.

The Federal Government's Financial Claims Scheme (FCS) protects deposits of up to $250,000 per account, per licensed bank. When two banks share the same licence, deposits over $250,000 are not protected.

Let's say for example, that you have $250,000 in savings with St George Bank, and a further $200,000 in a Westpac account. As St George is owned by Westpac, the two share a single banking licence. So only $250,000 of your money is covered by the FCS - not the combined sum of $450,000.

The situation would be different if you held $250,000 in St George, and $200,000 with, say, NAB. As they operate under separate financial licenses, the full $450,000 is covered by the FCS.

Is bigger better?

A more pressing issue for consumers can be competition. Australia has one of the most concentrated banking sectors in the world. As the Banking Royal Commission noted, the four major banks hold three-quarters (76%) of assets held in authorised deposit-taking institutions (ADIs), despite making up just 2.7% of the nation's ADIs.

That sort of market clout doesn't always result in a better deal for consumers. On the contrary, smaller banks often have to work hard to grow market share. As a guide, Mozo's 2021 National Savings Report found the average ongoing at-call savings rate across the big four banks is a meagre 0.18%, well below the market-leading rate of 1.35% with ING.

Fortunately, Australians still have plenty of choice in financial institutions, with options spanning credit unions, customer-owned banks and a decent selection of non-bank lenders.

And it seems more of us are voting with our feet to support the lesser-known brands - and secure good value. The latest AFG Index shows the four major banks and their associated brands currently account for 58% of the home loan market, down from almost 80% in 2013.

Taking a stance on your choice of bank may be an important personal issue. But don't overlook the goal of getting the best possible deal on the products that are right for you.

This information on bank ownership is based on FCS data provided by the institutions themselves. While it may not be a complete list, or might not be up to date, it can be a useful way of checking whether your deposits are covered by the FCS with specific banks.

Does it matter if my bank is owned by another bank?

For consumers looking for a better deal, it may be of concern that many of the alternative lenders are actually owned by the big three banks – Commonwealth Bank, Westpac and NAB. This matters, because the Australian government's Financial Claims Scheme (FCS), which guarantees the security of your money in banks up to $250,000 per institution, applies to a bank's subsidiaries as well. Without knowing which banks own what, your savings might not be as secure as you might think.

For example, let's say you had $250,000 in a savings account with ubank and another $250,000 in a savings account with NAB. Because ubank is owned by NAB, these two banks share the one banking licence. This means that the Australian government will only guarantee your deposit up to $250,000 with both ubank and NAB, not the full $500,000 you have deposited.

However, because ubank and Westpac are operating under different licences, if you had your $500,000 split between these two banks instead the full amount would be covered under the scheme.

Benefits of your bank being owned by another bank

There are some benefits to your bank being owned by a larger bank too. You usually get access to the larger banks ATM network all over the world, which is convenient and can also save you money in fees.

For example, St.George, BankSA, RAMS and Bank of Melbourne are all owned by Westpac. Westpac has the largest global ATM network with more 50,000 ATMs around the globe. If you're a customer of one of these smaller banks, you'll also get fee-free access to Westpac's huge ATM network.

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