Union Bank of Australia
The Union Bank of Australia Limited was an Australian commercial bank with British roots. It worked in Australia and New Zealand and merged with the Bank of Australasia in 1951 to form Australia and New Zealand Bank (ANZ).
history
Australia
The Union Bank of Australia was founded in London on July 7, 1837 under the Royal Charter as a colonial bank for Australia. Originally founded as Union Bank of Australasia , the name had to be changed to Union Bank of Australia just three days later due to possible confusion with the Bank of Australasia . The addition Limited came later. The background to the creation of the bank is a bit confused. However, it is considered certain that the businessman Philip Oakden , who worked in the colony of Australia , obtained the money to set up the bank in England , was involved in the founding of the bank and that Henry Jennings got into trouble in October 1836 because of a conflict with the Bank of Australasia Tamar Bank , as the basis for the establishment of the bank. Jennings Tamar Bank itself was founded in 1834 as a result of the separation of a branch of the Bank of Van Diemen's Land in Launceston . Seen in this way, the Union Bank of Australia's roots could almost be traced back to 1834. The bank's first branch was thus established in Launceston, which at the time was still part of New South Wales .
The economic crisis of the 1840s in Australia gave the Union Bank of Australia the opportunity to grow and take over competitors. In 1840, Bathurst Bank , founded in 1835, was taken over, followed by Archer Gilles & Co. , founded in 1840 , which had to cease operations in 1844. With the acquisitions, Union Bank was able to present itself as a stable and successful bank, more than doubling its deposits between 1842 and 1849 to over £ 412,000 . Starting with the gold rush in Victoria in July 1851 , the bank grew even more, and above all faster. So, for example, grew from October 1851 to October 1852 in just one year in the balance sheet of the Bank's branch in Melbourne , the liabilities of 280,888 £ to £ 1,538,741.
Between 1860 and 1875, the long boom in the economy, the Union Bank of Australia had to contend with strong competition . A lot of bank start-ups made the business difficult, but only two banks managed to expand their business activities to all of Australia with the exception of Western Australia . That was the Union Bank of Australia and the Bank of Australasia. In order to grow and gain market share , Australian banks opened branches regardless of their needs. In 1880, HG Turner, General Manager of the Commercial Bank of Australia criticized the fact that in Victoria with 326 bank branches there would be 2760 inhabitants per branch, whereas in England there would be 12,000 inhabitants per branch. In some places and districts there were up to 7 branches, where one or two branches would have been enough.
1880, after a long construction boom, 2/3 of all contracted in Victoria were loans on mortgages secured on land. When the situation came to a head at the end of the 1880s, the first financial crash that followed, 1891–1892, hit mainly the housing and finance companies that had emerged in the real estate boom of the 1880s. Between 1891 and 1993, 54 of them ceased business activities, 32 of them for good. Because bank customers tried to withdraw their deposits as quickly as possible, 26 banks had to temporarily close their doors between July 24, 1891 and June 8, 1892. But when the Commercial Bank of Australia closed for 30 days from April 5th, panic was triggered in the financial market. Twelve more banks followed with closings in quick succession, the Union Bank of Australia was not among them. The bank weathered the crisis quite well, especially since every new difficulty faced by another bank led to an increase in customer deposits.
The financial crisis led u. a. to the fact that the bank limited its liability in 1880 and eventually changed its name to Union Bank of Australia Limited . In 1892 the Union Bank of Australia took over the Bank of South Australia, which was founded in 1836 . This should be the last takeover until the merger in 1951.
By the Great Depression of 1929, Union Bank had established itself well in the market, but its market shares for business deposits, for example, were distributed very differently depending on the territory and were between 5.6 and 15.5%, with a slightly downward trend in each case. The bank survived the economic crisis and the effects of the Second World War by operating cautiously, but was unable to develop further by adapting to new market conditions. Despite this, the bank was able to maintain its position as the fourth largest bank in Australia with a balance sheet of £ 83 million in 1944, but could not come close to the Bank of New South Wales with a balance sheet total of over £ 200 million and thus number 1 among the banks. The Bank of Australasia fared similarly with just under £ 80 million and fifth on the list.
Both banks subsequently looked for partners in order to be able to expand. As the Union Bank of Australia was more rooted in rural areas and the Bank of Australasia had more served the industrial sector, they could complement each other sensibly through a merger. In addition, both colonial banks had their headquarters in London, where most of the shareholders were based . Nevertheless, the merger, also caused by amendments to the law, lasted more than 5 years. The decision to merge in December 1950 was finally implemented in October 1951. The result was Australia and New Zealand Bank Limited, which was later renamed Australia and New Zealand Banking Group Limited, abbreviated to ANZ.
See other main articles: Australia and New Zealand Banking Group
New Zealand
At the time New Zealand signed the Waitangi Treaty (1840) and New Zealand became a British colony , there was no legal tender . Almost all European coins brought in by whalers and business people were represented in the markets.
The Union Bank of Australia opened its first branch in the new colony in Petone , near Wellington , in March 1840 . In the same year she got permission to issue her own banknotes under British law . These banknotes and the British gold and silver coins were intended to replace the foreign money and eliminate the chronic money shortage. Four years later, in 1844, a regulation was created for the Union Bank that regulated the exchange of gold and silver pieces for banknotes.
In the years from 1840 to 1856, four more banks were founded and given the right to issue their own banknotes. But all of these banks did not see the year 1861. After the Colonial Bank of Issue had to give up in 1856, the Union Bank of Australia's The Paper Currency Act 1856 renewed the right to issue banknotes and placed it on a legal basis.
The Union Bank of Australia had a monopoly in New Zealand from 1840 to 1861 but did not solve the problem of money shortages. The result was that, with the founding of the Bank of New Zealand and the involvement of the Bank of New South Wales in New Zealand, the Union Bank faced strong competition and it had to give up its leading position.
In 1893, the Bank Note Issue Act obliged all banks to secure their money with the equivalent in gold and to invest gold reserves . With the establishment of the Reserve Bank of New Zealand on August 1, 1934, the Union Bank of Australia also lost its right to issue banknotes and eventually had to sell its gold reserves to the central bank .
In 1951, the New Zealand branch of Union Bank merged with the Bank of Australasia, similar to that in Australia and England.
literature
- Sydney James Butlin : Australia and New Zealand Bank. Longmans, London 1961.
Web links
Individual evidence
- ↑ Chay Fisher, Christopher Kent, Two Depressions, One Banking Collapse (Research Discussion Paper) , Reserve Bank of Australia, June 1999.
- ↑ a b Ken Matthews, The legal history of money in New Zealand , Reserve Bank of New Zealand, Bulletin Vol. 66 No. March 1, 2003.
- ^ The Bank-Note Issue Act 1893 . (PDF 2.6 MB) The Knowledge Basket - Legislation NZ , accessed on January 19, 2016 .