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Sydney "takes the cake" when it comes to Australia's banking

Date Published : Wednesday, August 13, 2008

In the last five years the country's banking industry has seen a seismic shift in its geographical powerbase from Melbourne to Sydney, it has been has reported.

The Australian claims that in September 2003 National Australia Bank (NAB) and ANZ, who both have head offices in Melbourne, were valued at a combined $73.5 billion.

Meanwhile, Sydney-based duo Commonwealth Bank of Australia (CBA) and Westpac lagged behind their southern rivals in the market cap stakes with a combined valuation of $63.6 billion.

Fast-forward five years and the tables have turned significantly with reports placing a $105.9 billion price tag on CBA and Westpac while their southern peers are worth just $79.6 billion in comparison.

These figures do not even take into account Westpac's multi-billion dollar move for St George, which won regulatory approval from the Australian Competition & Consumer Commission this week.

Marc Geary, a senior financial planner at Westpac, said: "Melbourne is still a business hub, but Sydney takes the cake when it comes to banking," he said.

The renaissance of New South Wales as a financial hub has been largely driven by Westpac's own performance. The lender overtook NAB as Australia's second-largest bank by market cap this month, less than a year after it had surpassed ANZ.

Recent research by the Institute of Public Affairs (IPA), published in the Sydney Morning Herald, claims that houses in Sydney are the 'least affordable in the world', with the average home in the harbour city costing over eight times its average household income.

Dr Alan Moran, director of the IPA's deregulation unit said, that "all but the most affluent young buyers" are being prevented from getting a foot on the city's property ladder, which lends credence to the notion that Sydney is a city of bankers.

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