Paradise lost? British banks in Australia
Many of the largest banks in the world today operate on a global basis. Foreign direct investment in financial services has increased markedly since the Second World War. This resurgence in multinational banking is attributed to many interconnected factors. 1 However, multinational banking has a long pedigree. 2 Many foreign banks, the majority of whom were domiciled in the United Kingdom, operated in the developing regions of the world from the 1830s onwards. The spread of British foreign banks has been well documented. However, for the most part, the process of outward expansion has been described rather than explained. 3
This chapter focuses on the experiences of those British banks who entered Australia in the second and third quarters of the nineteenth century and whose sole survivor still plays a prominent part in its banking. These nine banks formed a significant part of the broader sweep of the imperial and foreign banks that connected many parts of the developing world with the United IGngdom. The coming of the Anglo-Australian banks, or Anglos as they were commonly known in the Antipodes, raises a number of interesting questions concerning their motives, and their performance relative to the locally-domiciled banks with whom they competed. What prompted them to come and to stay? Did the British banks have any particular competences that were superior to those of the local banks? Did the foreign and local banks compete in the same markets? Was the performance of British banks, whether measured in terms of market share or financial returns on their capital and assets, superior, worse or no better than the indigenous banks? Why was there a hiatus of over 100 years between the commencement of business by the Bank of Queensland in 1863 and the next influx by British financial institutions into Australia?