What Really Happens Inside Australian Banks?
This insider's story of the State Bank of New South Wales reveals the origins of the dramatic changes in Australian banking that soured its relationship with ordinary Australians. In November 1993 the NSW Government was desperate to sell its State Bank, a publicly owned asset. To make the sale more attractive the bank introduced a number of changes to its banking services, purely for profit. Other banks followed suit, adopting combinations of technology-driven cost controls, new fees and charges, branch closures and job cuts. Bank customers, disappointed and angry but unable to turn anywhere else, were naked among cannibals.
Just as astonishing as these new tactics was the eventual deal for the sale itself. Though the buyer, Colonial, paid $576.5 million dollars on paper, the NSW government realised net proceeds of little more than $200 million. Under the terms of the sale the government guaranteed all loans then outstanding to the bank - indefinitely. As a result, a liability of $1.2 billion still hangs over the NSW State Budget and taxpayers are paying the price. As Graham Hand shows us, everything you always suspected about the banks is true.
