Submission to the Financial System Inquiry List of tables

Chapters

Table 2.1: Australian Economic Indicators

Table 4.1: Table 4.1: APRA's Assessment of Systemic Importance

Table 4.2: The Major Banks

Table 4.3: Australian-owned Banks' Foreign Claims

Table 4.4: Systemic Importance of FMIs Operating in Australia

Table 5.1: Forms of Finance Used by Small Businesses(a)

Table 8.1: Non-cash Retail Payments

Table 8.2: Selected Non-cash Payments By Country

Table 8.3: Selected Interchange Fees on a $100 Credit Card Transaction(a)

Table 2.1: Australian Economic Indicators
Quarterly
1980s 1990s 2000s
GDP Growth Mean 0.8 0.8 0.8
Standard deviation 1.0 0.8 0.5
Unemployment rate Mean 7.6 8.8 5.5
Standard deviation 1.4 1.4 0.8

Source: ABS
Table 4.1: APRA's Assessment of Systemic Importance
Selected measure Share of system total
Size(a) Resident assets
 		 Four majors: 16–23 per cent
5th largest: 2 per cent
Interconnectedness(a) Loans and advances to
financial corporations		 Four majors: 15–25 per cent
5th largest: 4 per cent
Deposits from financial
corporations		 Four majors: 16–22 per cent
5th largest: 6 per cent
Securities outstanding
 		 Four majors: 14–19 per cent
5th largest: 3 per cent
Substitutability(a) Loans and advances
 		 Four majors: 16–25 per cent
5th largest: 2 per cent
Loans and advances to households and non-financial corporates Four majors: 16–25 per cent
5th largest: 2 per cent
Complexity(b) Risk-weighted assets for
traded market risk		 Four majors and Macquarie: 14–30 per cent
6th largest: 1 per cent

(a) Data are on a resident, domestic books basis and include Australian-owned banks, foreign-owned bank subsidiaries, and foreign-owned bank branches
(b) Data are on a consolidated basis; foreign-owned bank branches do not hold capital in Australia so are not included

Sources: APRA; banks' financial disclosures
Table 4.2: The Major Banks
Consolidated, as at end of 2013 financial year
ANZ CBA NAB WBC
Total assets ($b) 703 754 808 697
Ranking among international banks by total assets, at end 2012 42 39 37 40
Deposits to liabilities (per cent) 56 57 48 59
Loans to total assets (per cent) 67 74 51 77
Housing loans to total loans (per cent) 54 67 70 68
Trading assets and securities to total assets (per cent) 17 17 15 15
Cost-to-income ratio (per cent) 46 44 45 42
Return on equity (per cent) 15 18 12 15
Risk-weighted assets to total assets (per cent) 51 45 50 45
Tier 1 capital ratio (per cent of risk-weighted assets) 10.4 10.2 10.4 10.7

Sources: The Banker; banks' annual and Pillar 3 reports
Table 4.3: Australian-owned Banks' Foreign Claims
Consolidated global operations, immediate borrower basis, end September 2013
Level Share of consolidated
assets		 Share of foreign
claims
$ billion Per cent Per cent
New Zealand 298 9.0 39
United Kingdom 140 4.3 19
Asian region 142 4.3 19
United States 89 2.7 12
Other countries 86 2.6 11
Total 756 22.9 100

Sources: APRA; RBA
Table 4.4: Systemic Importance of FMIs Operating in Australia
Description of Activity Size (Values Cleared/Settled, Daily)(a) Substitutes Interconnectedness (Number of participants)(b)
Payment Systems
RITS Settlement of high value payments (including for retail payment systems and other FMIs) $167 billion No substitute provider 85 participants (71 banks, 14 non-banks), of which 24 settle indirectly
CLS Settlement of foreign exchange transactions $253 billion (AUD settlements) No substitute provider 63 settlement members (including four Australian banks). Other entities access indirectly
Central Counterparties
ASX Clear Clearing of cash equities and equity-related derivatives Cash equities: $4.2 billion traded value Equity options: $118 million traded value/$3.1 billion underlying. No substitute provider 37 active direct participants (including Australian/foreign banks, brokers)
ASX Clear (Futures) Clearing of ASX 24 exchange-traded derivatives and AUD OTC interest rate derivatives $195 billion for five major listed financial contracts(c) No substitute provider for ASX-24 derivatives LCH.Clearnet Ltd for OTC derivatives 19 direct participants (including Australian/foreign banks). Large number of indirect participants for listed derivatives
LCH.Clearnet Ltd Clearing of OTC interest rate derivatives $15 billion notional value ASX Clear (Futures) 88 direct participants internationally (including two Australian banks)
Securities Settlement Facilities
ASX Settlement Settlement of cash equities $8.5 billion(d) No substitute provider 80 direct participants (including Australian/ foreign banks, brokers)
Austraclear Settlement of OTC trades in debt securities, AUD payments $39 billion for securities trades $11 billion for payment-only transactions No substitute provider 829 participants (including financial institutions and corporates); some access indirectly

(a) Average for year ended 31 December 2013; OTC derivatives data for April 2013.
(b) As at 31 December 2013.
(c) Data for exchange-traded derivatives only; OTC derivatives clearing service first used September 2013.
(d) Includes settlement of off-market trades.

Sources: ASX; Bloomberg; LCH.Clearnet Limited; RBA
Table 5.1: Forms of Finance Used by Small Businesses(a)
2012
Finance product Share of respondents
Credit card 73
Secured bank loan 41
Overdraft 40
Lease 36
Hire purchase 24
Family or friends 23
Chattel mortgage 20
Unsecured Bank loan 17
Vendor financing 8
Debtor financing 3
International trade financing 2
Inventory financing 1
Other 2
None 13

(a) The CPA Australia Asia-Pacific Small Business Survey is an annual survey conducted in six markets of businesses with fewer than 20 employees; for Australia, around 500 businesses are surveyed each year

Source: CPA Australia (2012)
Table 8.1: Non-cash Retail Payments
2013 1997–2013
Per cent of total Average annual growth, per cent
Number Value Number Value
Direct entry 30.2 87.4 9.1 15.1
Direct debits 9.6 37.8 12.4 17.0
Direct credits 20.7 49.6 8.0 13.9
Debit cards 40.5 1.3 11.7 11.9
Credit/charge cards 22.9 1.7 10.8 12.4
BPAY 4.1 1.8 33.7(a) 45.8(a)
Cheques 2.3 7.8 −8.3 −8.8
Total 100.0 100.0 8.3 5.3

(a) Average annual growth since 1998.

Sources: APCA; BPAY; RBA
Table 8.2: Selected Non-cash Payments By Country
Number of payments per capita
Australia Canada France United Kingdom United States
1997 2012 1997 2012 1997 2012 1997 2012 1997 2012
Card Payments 52 210 65 216 39 130 45(a) 167(a) 63 248
– Debit cards 31 132 33 126 na na 25 129 15 165
– Credit cards(b) 20 78 32 90 na na 19 32 48 84
Cheques 42 10 58 22 82 43 52 13 174 58
Credit Transfers 28 72(c) 13 28 31 47 28 58 9 28
Debit Transfers 7 32 11 20 24 54 27 54 5 42
Total 128 324 147 286 175 275 152 293 251 376

(a) Includes charge debit cards
(b) Includes charge cards
(c) Includes BPAY

Sources: ABS; BIS; RBA
Table 8.3: Selected Interchange Fees on a $100 Credit Card Transaction(a)
Average for MasterCard and Visa, January 2014
Australia(b)  United States
Rate for most-preferred merchants (applies to all their transactions)(c) 0.21 1.20
Typical rate for non-preferred merchants (applies to transactions on non-premium cards) 0.30 1.76
Rate for non-preferred merchants on transactions using highest-level of premium/rewards card(d) 2.00 3.20

(a) Local currency
(b) Excludes GST
(c) Lowest rate applicable to ‘strategic merchants’ (Australia) or supermarkets (US)
(d) ‘Standard’ interchange rates in the US

Sources: MasterCard, Visa