Overview

Hard cash: Cuts to the cash rate have caused subdivision revenue to contract

IBISWorld’s Finance market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

REPORT SNAPSHOT

Industry Threats & Opportunities

  • Subdivision revenue will primarily depend on the performance of the big four banks
  • Despite declining revenue, subdivision profitability will rise due to record low interest rates
  • The proportion of revenue generated from fees and advisory services is likely to increase

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    Industry Analysis & Industry Trends

    The Finance subdivision has operated in a challenging trading environment over the past five years, with a falling cash rate and declining private capital expenditure weighing on performance. Although residential property prices have increased over the period, other segments of the economy have lagged behind, leading to historic lows in the cash rate. The Reserve Bank of Australia (RBA) has been hesitant to raise the cash rate given Australia's two-speed economy. The cash rate was last increased in November 2010 and has declined consistently since then. This decline has contributed to falling subdivision revenue, as interest revenue derived from the loan portfolios of lenders has fallen...

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    Industry Report - Starting a New Business Chapter

    The Finance subdivision exhibits high barriers to entry. Despite the deregulation of the financial system, barriers to entry for the subdivision have remained high overall, but have declined for some segments. Many financial institutions, particularly the large banks, operate across several different industries, providing banking, financial advice, portfolio management, superannuation and broking services. The big four banks have substantial resources and dominate the markets in which they operate. Additionally, major players in industries such as banking benefit from economies of scale and their cost-to-income ratio is generally lower.

    Funding is one of the biggest barriers to entry. New..

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    Additional Insights for the Finance Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Finance Industry are

  • Having an extensive distribution network
  • Ability to pass on cost increases
  • The size, reputation and degree of globalisation
  • IBISWorld analysts also discuss how external factors such as Cash rate and Residential housing prices in the Finance industry impact industry performance..

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    Industry Products

    What is the Finance Industry?

    The Finance subdivision covers firms providing financial services (excluding insurance and superannuation) in Australia. The most significant industries within the Finance subdivision are domestic banks, foreign banks, building societies and credit unions.

    Industry Products
    Home loans
    Business loans
    Consumer credit
    Industry Activities
    Building society operation
    Financial asset investment service provision
    Credit union operation
    Banking service provision
    Money market dealing
    Non-depository financing

    Table of Contents

    About this Industry
    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry at a Glance
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Industry Performance
    Executive Summary
    Key External Drivers
  • Cash rate
  • Residential housing prices
  • All Ordinaries index
  • Capital expenditure by the private sector
  • Consumer sentiment index

  • Current Performance
  • Domestic banks
  • Demand for credit
  • Further consolidation
  • Chart: Revenue Growth

  • Industry Outlook
  • Domestic banks
  • Demand for credit
  • Further consolidation
  • Table: Finance Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Finance Industry Lifecycle vs The Economy

  • Products & Markets
    Supply Chains
    Key Buying Industries
  • Retail Trade
  • Finance
  • Professional Services
  • Consumers

  • Key Selling Industries
  • Accounting Services
  • Legal Services

  • Products & Services
  • Home loans
  • Consumer credit
  • Business loans
  • Other
  • Chart: Finance Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Retail clients
  • Commercial clients
  • Government clients
  • Chart: Major Market Segmentation for the Finance Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Competitive Landscape
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Interest expense
  • Wages
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Finance

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Finance Industry

  • Industry Globalization
    Major Companies
    Commonwealth Bank of AustraliaWestpac Banking CorporationAustralia and New Zealand Banking Group LimitedNational Australia Bank Limited
  • Table: Commonwealth Bank of Australia - financial performance
  • Table: Westpac Banking Corporation - financial performance
  • Table: Australia and New Zealand Banking Group Limited - financial performance
  • Table: National Australia Bank Limited - financial performance

  • Operating Conditions
    Capital Intensity
  • Chart: Level of Capital Intensity for the Finance Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Key Statistics
    Table: Industry Data for the Finance Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Jargon & Glossary
    Funds Under Management
  • The collective value of assets under the management of an investment or portfolio manager.
  • Loan Loss Provisions
  • A charge for bad and doubtful debts.
  • Net Interest Margin
  • Net interest income as a portion of interest revenue.
  • Why buy this report?

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Finance:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Finance market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Finance, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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