ANZ, Westpac return focus to the big end of town — risky or not?
In the past, big companies were core clients of Westpac and ANZ, a key point of difference. Now, as home lending peaks, they're telling investors the big end is back.
Of the myriad ways banks find to blow up their balance sheets, institutional banking has historically been the favourite.
ANZ has been a serial offender in recent decades, while Westpac’s near fatality in the early 1990s recession was the result of terrible risk management across a range of nominally institutional businesses which didn’t talk to one another.
Nevertheless, the two banks have historically had institutional banking as a core business because they were the favoured lenders to the big end of town in Melbourne and Sydney. ANZ to the mining giants, Westpac to the industrials. Moreover, with the notable exception of Gail Kelly at Westpac, they have been led by institutional bankers.
National Australia Bank, particularly since it hoovered up ANZ customers during that same 1990s recession, is more traditionally a business bank while Commonwealth Bank, as a former government enterprise, was and is essentially a savings and home loan bank.
