Overview

Commonwealth Bank, formally Commonwealth Bank of Australia and commonly branded CommBank, is one of Australia's four largest banking groups. It serves consumers, small and medium-sized enterprises, corporations, institutions and government-related customers through retail banking, business banking, institutional banking, payments, funds management, superannuation, insurance, securities trading and related financial services. Its principal domestic banking brand is Commonwealth Bank, while the wider group has included or owned brands and businesses such as Bankwest, ASB Bank in New Zealand, Colonial First State, CommSec and CommInsure. The institution was created by the Australian federal government under the Commonwealth Bank Act 1911. It opened its first branch in Melbourne in 1912 and expanded quickly through state savings-bank acquisitions and an agreement allowing it to operate through post-office agencies. During the twentieth century it combined commercial banking with important public-policy functions. It assumed responsibility for issuing Australian banknotes in 1920 and acquired increasingly broad central-bank powers during the Second World War. Its public role also extended to migrant information services, regional development lending and overseas operations, including branches and agencies in Papua New Guinea and the Pacific. The dual role of central bank and commercial bank became controversial in the 1950s. Legislative changes in 1959 separated monetary and central-bank responsibilities from the commercial activities of the Commonwealth Banking Corporation, leaving the Reserve Bank of Australia with central-bank functions. The commercial organization was subsequently structured around the Commonwealth Trading Bank, Commonwealth Savings Bank and Commonwealth Development Bank. From the 1960s onward, the group diversified into finance, insurance, foreign-exchange dealing, international banking and payment cards. It introduced Bankcard in 1974, becoming an early participant in Australia's modern credit-card market. The bank entered a major restructuring and expansion phase from the late 1980s. It acquired a majority interest in New Zealand's ASB Bank in 1989 and purchased State Bank of Victoria in 1991. The Australian government began privatizing the group through share offers in 1991, 1993 and 1996, making Commonwealth Bank a widely held public company. In 2000 it merged with Colonial Limited, adding Colonial's financial-services operations and increasing its ownership of ASB. The group later expanded in Indonesia, China and India, acquired Bankwest and St Andrew's Insurance from HBOS in 2008, and entered an agreement involving Wizard Home Loans. Commonwealth Bank remains a large, technology-focused Australian financial institution, with digital banking, payments, home lending, deposits, business finance, wealth products and institutional services at the centre of its operating model. Its scale and market position have also made it subject to sustained scrutiny. The 2018 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry identified serious conduct and culture concerns, including charging deceased customers for financial advice and allegations involving fraud, deception and money laundering. In 2018 the bank settled an Australian Securities and Investments Commission case concerning manipulation of the bank bill swap rate. It has additionally faced criticism over fossil-fuel financing and projects affecting the Great Barrier Reef. In 2023 it announced the proposed divestment of PT Bank Commonwealth in Indonesia to Bank OCBC NISP.

History

Commonwealth Bank was established by the Australian federal government under legislation passed in 1911. The bank was designed to undertake both savings and general banking and received a federal government guarantee. It began operations with a Melbourne branch in July 1912, acquired the State Savings Bank of Tasmania later that year and had branches in all six Australian states by 1913. Its head office moved to Sydney in 1916, and the organization also followed Australian administrative and military activity into New Guinea. The institution's public importance increased during the 1920s. In 1920 it assumed responsibility for issuing Australian banknotes from the Treasury and acquired the Queensland Government Savings Bank. The Commonwealth Bank Act 1924 created a board structure intended to place limits on the governor and formalize oversight. During the Great Depression, disagreement between the bank's leadership and the Scullin Labor government over credit expansion and pension policy became a major political issue. In the early 1930s the bank absorbed several state savings-bank operations, including parts of the New South Wales and Western Australian systems. The bank expanded its role during the Second World War, although its Papua New Guinea operations were interrupted by the Japanese advance. Emergency legislation gave it extensive monetary powers, which it used alongside government policy to support wartime and postwar economic activity. After the war it opened many new Australian branches and created a migrant information service. Its overseas network included the Solomon Islands and numerous Papua New Guinea locations serving trade, government and local communities. By the late 1950s, the combination of central-bank authority and commercial banking had become politically and institutionally difficult to sustain. Reforms in 1959 transferred central-bank functions to the newly created Reserve Bank of Australia. Commonwealth's remaining commercial operations were organized through the Commonwealth Trading Bank, Commonwealth Savings Bank and Commonwealth Development Bank. The group then diversified. It created or acquired finance and insurance operations, developed international banking and foreign-exchange activities, and introduced Bankcard in 1974. Its Pacific businesses were progressively transferred to local institutions as territories moved toward independence. The modern corporate group emerged through expansion and privatization. Commonwealth acquired 75 percent of ASB Bank in New Zealand in 1989 and purchased State Bank of Victoria in 1991. The federal government listed the bank on the Australian Stock Exchange in September 1991 and sold further stakes in 1993 and 1996. The 2000 merger with Colonial Limited broadened the group into wealth management and insurance and brought additional regional banking interests. Commonwealth subsequently expanded its Asian presence, acquired the remaining ASB interest, purchased Bankwest and St Andrew's Insurance in 2008, and participated in the Wizard Home Loans transaction. In the twenty-first century the group consolidated its position as a major Australian retail and institutional bank while investing heavily in electronic and mobile banking, payments, data systems and customer-facing technology. Its size brought persistent regulatory, social and environmental scrutiny. The 2018 royal commission exposed serious customer-treatment and governance issues, while the bank also reached a regulatory settlement over bank bill swap rate manipulation. Campaigners criticized its financing of coal and gas projects connected with the Great Barrier Reef. In 2023 Commonwealth announced the divestment of its Indonesian subsidiary to Bank OCBC NISP. The group continues to operate as a listed Australian banking company under the Commonwealth Bank and related business brands.

2023
Indonesian subsidiary divestment announced
[1]Commonwealth Banken.wikipedia.org
Commonwealth announced the proposed sale of PT Bank Commonwealth to Bank OCBC NISP.
2018
Royal Commission scrutiny
[1]Commonwealth Banken.wikipedia.org
The banking royal commission documented misconduct and culture concerns involving the group.
2017
Insurance transaction with AIA announced
[6]AIA proposed acquisition of CBA life-insurance businessesaia.gcs-web.com
CBA announced the proposed sale of specified Australian and New Zealand life-insurance businesses to AIA with associated distribution partnerships.
2016
Twenty-five years as an ASX-listed company
[5]CBA marks 25 years on the ASXcommbank.com.au
The bank marked twenty-five years since its first public listing.
2008
Bankwest acquisition announced
[1]Commonwealth Banken.wikipedia.org
Commonwealth announced the acquisition of Bankwest and St Andrew's Insurance from HBOS.
2000
Colonial merger completed
[1]Commonwealth Banken.wikipedia.org
CBA completed its merger with Colonial Limited, adding banking, life-insurance and funds-management operations.
2000
Full ownership of ASB
[4]Commonwealth Bank corporate profile and privatisation historyirasia.com
The group acquired the remaining minority interest in ASB Bank.
1997
Privatisation completed
[3]Commonwealth Bank history referenceen.wikipedia.org
The staged sale of the government's remaining ownership was completed, leaving Commonwealth Bank as a publicly held company.
1991
Listed and expands through State Bank of Victoria
[1]Commonwealth Banken.wikipedia.org
The bank was listed on the Australian Stock Exchange and acquired the failing State Bank of Victoria.
1991
First public share offer
[4]Commonwealth Bank corporate profile and privatisation historyirasia.com
The Australian government began the bank's privatisation with a public share offering and its ASX listing.
1989
ASB Bank stake acquired
[1]Commonwealth Banken.wikipedia.org
Commonwealth acquired a controlling interest in New Zealand's ASB Bank.
1989
Initial acquisition of ASB Bank
[4]Commonwealth Bank corporate profile and privatisation historyirasia.com
Commonwealth Bank acquired a controlling interest in New Zealand-based ASB Bank.
1974
Bankcard introduced
[1]Commonwealth Banken.wikipedia.org
Commonwealth helped establish Australia's first widely used domestic credit-card system through Bankcard.
1959
Central and commercial banking separated
[1]Commonwealth Banken.wikipedia.org
The Reserve Bank of Australia assumed central-bank responsibilities, leaving Commonwealth as a commercial banking group.
1920
Banknote issuance transferred
[1]Commonwealth Banken.wikipedia.org
The bank took over responsibility for issuing Australian banknotes from the Treasury.
1912
First branch opens
[1]Commonwealth Banken.wikipedia.org
The bank opened its first branch in Melbourne and acquired the State Savings Bank of Tasmania.
1911
Commonwealth Bank established
[1]Commonwealth Banken.wikipedia.org
The Commonwealth Bank Act created a federally owned bank with savings and general banking powers. The Commonwealth government established the bank as a national banking institution.

Products and positioning

A large, mainstream Australian bank positioned around national scale, broad financial-service coverage, digital convenience and long-standing consumer and business relationships.

Retail banking
CommBank retail banking
The core consumer business offers everyday transaction accounts, savings, deposits, home loans, personal lending, credit cards, payments and digital banking. The brand serves customers through branches, ATMs, telephone channels and online and mobile platforms.
Commercial and institutional banking
Business and institutional banking
These businesses provide lending, deposits, cash management, payments, trade finance, foreign exchange, capital-markets access and other services to small businesses, corporations, government bodies and institutional clients. Services for small businesses and larger commercial customers include business accounts, lending, cash-flow facilities, payment acceptance, transaction services and financial guidance. The division supports businesses through digital channels, relationship managers and specialist payment infrastructure. Banking and markets services for corporations, governments, financial institutions and other large organisations. Activities include transaction banking, lending, payments, risk management and selected international financial services.
Securities broking
CommSec
An investment-services brand associated with Commonwealth Bank, providing retail investors with access to Australian share trading and related market information and investment tools.
Banking · 2008
Bankwest
Bankwest became part of Commonwealth Bank through the 2008 acquisition from HBOS. It has operated as a related Australian banking brand, particularly associated with consumer and home-lending services.
Funds management and superannuation · 2000
Colonial First State
Colonial First State represents the group's wealth-management heritage following the Colonial merger and has been associated with managed investments, superannuation and related financial products.
Credit card · 1974
Bankcard
Bankcard was an early Australian credit-card product established by Commonwealth Bank in 1974. It helped introduce revolving consumer credit and card payments to the Australian market before the later expansion of MasterCard and Visa products.
Retail banking
Personal banking
Everyday banking for consumers, including transaction accounts, savings products, debit and credit cards, digital payments, online banking and access through branches and ATMs. The proposition is designed to cover routine money management as well as longer-term borrowing and saving needs.
Residential lending
Home loans
Residential mortgage products for home buyers, refinancers and property owners. Home lending has historically been one of CBA's central consumer businesses and is supported through digital applications, broker channels, relationship services and repayment-management tools.
Digital banking
CommBank app
The bank's mobile-banking platform provides account servicing, transfers, payments, notifications, card controls and financial-management features. It is a major part of CommBank's strategy to combine large-bank infrastructure with app-based customer engagement and security tools.

Controversies

2020
ASIC starts proceedings over alleged conflicted remuneration
The Australian Securities and Investments Commission started civil penalty proceedings against Commonwealth Bank of Australia and Colonial First State Investments Limited. ASIC alleges that CFSIL paid CBA more than A$22 million in conflicted remuneration in connection with the distribution of Essential Super. The allegations are presented as claims by the regulator, not as a court determination.
Source 1 Source 2 Source 3 Source 4 Source 5 Source 6 Source 7 Source 8
2020
Australian court fines CBA $5 million over customer overcharging
The Federal Court ordered the Commonwealth Bank of Australia to pay a $5 million penalty over failures involving AgriAdvantage packages, which led to customers being overcharged fees and interest and underpaid interest on savings. The court accepted that the conduct was not deliberate.
Source
2019
CDPP proceedings against CommInsure
The source reports CDPP proceedings against CommInsure concerning alleged contraventions related to telephone sales of simple life insurance products by CMLA. The source does not state when the proceedings began or report a determination.
Source
2018
Royal Commission misconduct findings
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry examined Commonwealth Bank conduct, including fees charged to deceased customers for financial advice and allegations involving fraud, deception and money laundering. The proceedings contributed to wider criticism of the bank's governance and internal culture.
Source
2018
Bank bill swap rate manipulation case
Commonwealth Bank settled an ASIC case for A$25 million and admitted unconscionable conduct relating to manipulation of the bank bill swap rate on five occasions between February and June 2012.
Source
2013
Environmental financing controversy
Market Forces and other campaigners criticized Commonwealth Bank for financing coal and gas activity associated with the Great Barrier Reef, arguing that the bank's lending conflicted with environmental commitments.
Source
2004
Misleading Cricket Home Loan advertising
The Federal Court declared that television and branch advertising for a home-loan promotion was misleading. The campaign prominently claimed that no establishment fee was payable, while eligibility depended on customers holding or obtaining additional banking products. The ruling found that the important qualification was not communicated clearly enough to correct the headline impression.
Source

Marketing campaigns

2015Climate and Great Barrier Reef financing campaign
Australia · United Kingdom · United States
Environmental campaigners protested Commonwealth Bank's lending to fossil-fuel projects linked to the Great Barrier Reef and reworked branch advertising with references to coal financing. The campaign followed reports alleging that the bank was a significant lender to projects in or affecting the reef region.
Outcome. The protests intensified public scrutiny of the bank's environmental-finance policies; a definitive campaign outcome is not stated in the reference material.
Source
2008Determined to be different
Australia
A humorous mockumentary campaign portrayed an American advertising agency developing an exaggeratedly Australian concept for Commonwealth Bank. The creative approach used parody and behind-the-scenes industry humour.
Outcome. The campaign gave CommBank a deliberately self-aware advertising voice and became a notable departure from conventional bank advertising.
Source
2006Every day's a new day
Australia
CBA replaced the long-running 'Which bank?' platform with a campaign presenting the bank as more attentive to customers and focused on improving its service.
Outcome. The campaign represented a major repositioning of the bank's advertising and a change in its central brand line.
Source

Brand decisions

2023
Divest PT Bank CommonwealthM&A
Background
Commonwealth reviewed its international portfolio and announced the divestment of its Indonesian banking subsidiary.
Action taken
The bank announced the sale of PT Bank Commonwealth to Bank OCBC NISP.
Aftermath
The reference material records the announcement but does not establish the final completion date or transaction value.
Source
2017
Sell specified life-insurance businesses to AIAM&A
Background
CBA sought to simplify its portfolio while retaining the ability to distribute insurance products to customers.
Action taken
The group agreed to sell its Australian life-insurance business and New Zealand life and health insurance businesses to AIA and proposed long-term bancassurance distribution arrangements.
Aftermath
The transaction shifted the group away from direct insurance manufacturing in these areas while preserving a bank-distribution relationship.
Gross proposed transaction consideration. A$3.8 billion (2017 announcement)
Source
2008
Acquire Bankwest and St Andrew's InsuranceM&A
Background
The transaction followed the global financial crisis and HBOS's decision to sell the Australian businesses. The acquisition was pursued during a period of financial-market disruption and was intended to expand CBA's domestic lending and insurance presence.
Action taken
Commonwealth announced an acquisition valued at approximately A$2.1 billion, subject to regulatory approval. CBA announced an agreement to acquire Bankwest and St Andrew's Australia from HBOS, subject to regulatory approval.
Aftermath
Bankwest and St Andrew's Insurance became part of Commonwealth's Australian financial-services portfolio. The transaction expanded CBA's presence in Western Australian banking and added Bankwest's lending portfolio to the group.
Announced acquisition value. A$2.1 billion (2008 announcement)
Source
2000
Merge with Colonial LimitedM&A
Background
CBA sought to broaden its financial-services platform beyond traditional banking into insurance and funds management.
Action taken
Commonwealth Bank merged with Colonial Limited after the transaction received regulatory and court approval.
Aftermath
The group gained Colonial's banking, life-insurance and funds-management operations and strengthened its wealth-related business.
Source
1991
Begin privatisationStrategy
Background
The government-owned bank required a new ownership and capital structure as Australia's financial system became more commercially competitive.
Action taken
The Australian government offered shares to the public and continued the process through further offerings during the 1990s.
Aftermath
Privatisation was completed in 1997 and Commonwealth Bank became a widely held listed company.
Source

Recent events

2023
Commonwealth Bank announces Indonesian divestment[1]Commonwealth Banken.wikipedia.org
M&A
The group announced the sale of PT Bank Commonwealth to Bank OCBC NISP.
2016
Commonwealth Bank marks 25 years on the ASX[5]CBA marks 25 years on the ASXcommbank.com.au
Other
The bank commemorated the twenty-fifth anniversary of its first public listing on the Australian Securities Exchange.
2008
Commonwealth Bank agrees to acquire Bankwest and St Andrew's Insurance[1]Commonwealth Banken.wikipedia.org
M&A
The group announced a purchase of the two HBOS businesses for approximately A$2.1 billion, subject to regulatory approval.
2000
Commonwealth Bank and Colonial complete their merger[1]Commonwealth Banken.wikipedia.org
M&A
The merger added Colonial's financial-services businesses and strengthened Commonwealth Bank's regional and wealth-management activities.
1996
Commonwealth Bank is fully privatized[1]Commonwealth Banken.wikipedia.org
Other
The Australian government completed the staged sale of its remaining Commonwealth Bank shares, ending government ownership.
1991
Commonwealth Bank begins staged privatisation[4]Commonwealth Bank corporate profile and privatisation historyirasia.com
Other
The Australian government began selling Commonwealth Bank shares to the public, starting the process that ultimately converted the institution into a widely held listed company.

Related entries

Commonwealth Bank of Australia