Magazine article American Banker

Royal Bank of Canada and Australian Insurer Open Bank

Magazine article American Banker

Royal Bank of Canada and Australian Insurer Open Bank

Article excerpt

Royal Bank of Canada and Australian Insurer Open Bank

MELBOURNE, Australia -- Canada's largest bank, the Royal Bank of Canada, has combined with a local partner to form a new force in Australian banking. On Feb. 26, in a joint venture with the National Mutual Life Association of Australasia Ltd., it launched a new bank, the National Mutual Royal Bank Ltd. It will be owned equally by the two partners. National Mutual is Australia's second largest life insurer.

Mr. Bill Gurry, managing director of the new bank, said that the National Mutual Royal Bank would begin business with group assets of $3.5 billion, a savings bank with 46 branches, a corporate and international banking network, a major investment bank, Capel Court, and a finance company, Mercantile Credits. (All monetary figures in this article are in Australian dollars.)

With an extensive network of savings bank branches in the state of Victoria, and sub-branches and corporate offices in capital cities all over mainland Ausralia, the new bank will initially have group capital of $50 million.

Before the establishment of the new bank, National Mutual was already the second largest financial group in Australia, excluding the four major trading banks, and it brings to the joint venture the resources and client bases of the National Mutual Building Society. The transition of the building society to a savings bank will contribute to the new bank, assets of more than $450 million, and a client base of more than 80,000 accounts.

It is this client base that forms, in effect, an established retail banking network for the new bank, and in this respect the Royal Bank of Canada is the first North American bank to tap Australia's retail banking market through such an established retail bank branch structure. So far, the other North American banks, Citibank and Chase-AMP, have confined their bank branches to state capitals and relied on shared electronic fund transfer arrangements for wider access to the retail market. …

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