The Bank of Australasia in Western Australia

Banks of Western Australia

West Australians are often rightly characterised as generally being a parochial bunch, this provincialism mean that in the days before the Commonwealth Government assumed control over the issue of Australia’s circulating currency notes in 1910, most West Australians preferred to bank with either the Bank of Western Australia or the Western Australian Bank.

Banks that had been founded outside the colony of WA found it difficult to establish a presence here, the Bank of Australasia prime among them.

Strong Local Support

The history of the Bank of Australasia in West Australia has two chapters - the first runs between 1841 and 1846, when a branch was established in Perth. Mick Vort Ronald's research indicated that there was "strong local support" for the Western Australian Bank at that time, and that the Perth branch of the Bank of Australasia was closed in 1846.

Several other banks entered the Western Australian market before 1910, these included the Bank of New South Wales, the National Bank of Australasia, the Union Bank of Australia, and for a very short period of time, the Commercial Bank of South Australia.

The Discovery of Gold in Kalgoorlie in 1893 - A Truly National Bank

The discovery of gold in Kalgoorlie in 1893 led many to believe there would be a gold rush in West Australia, bringing with it a surge of prosperity and an influx of British capital. The Bank of Australasia opened it's second branch in Perth in 1894, and quickly afterwards opened branches in Fremantle, Coolgardie and Cue also. Branches were opened in Menzies and Kalgoorlie in 1895.

The official history of the Bank of Australasia makes much of the fact it was one of the few Australian banks to survive the banking collapse of 1893, that it had protected it's depositors in a time when so many other banks had failed, " peace and security of mind alike to depositors, borrowers and shareholders."

While the executives and staff of the bank reflected on the historic anniversary with pride, that fond regard was not necessarily shared by many members of the Australian public.

Stronger Ties to "The City of London” Than to Perth

The Bank of Australasia was ultimately owned by a small number of private shareholders in London, and more than a few Australians felt that it placed profits for those shareholders before the best interests of their Australian customers.

A quick review of the structure and history of the Bank of Australasia makes the reasons for this latent antagonism clearer.

Although the name of the bank indicates it was an enterprise founded in Australia, it was in fact very strongly linked to England, specifically to London. The Bank of Australasia was incorporated by Royal Charter, it had mainly English directors and shareholders, their conduct was regulated by English law, and was under the control of the Bank of England. 

All of the Bank's directors lived in London - nearly all of them were British born, and nearly all were Oxford educated. Many were the sons of wealthy and successful families, and had succeeded their father or an uncle in their role. Although some had served as Directors of the Bank of England, very few had actually ever visited Australia.

While the standing and connections of the bank's board members in the the vitally important commercial district of the City of London (specifically, the Corporation of the City of London) gave it a major commercial advantage over banks that had been founded in Australia when it came to raising capital, those same connections to London made it far more difficult in the court of public opinion.

The Bank of Australasia's own official history states that decision making at the bank was highly centralised - staff carried out each of their their duties in line with a comprehensive set of written procedures. All aspects of their work were closely supervised, discipline was strict.

The Bank of Australasia truly became a national bank when it opened the first branch in WA in 1894. It was a large, strong, well-connected and secure organisation, and although it was tightly controlled by a formidable bureacracy emanating from the other side of the world, it is not hard to see why a number of West Australians trusted it.

In 1951, the Bank of Australasia merged with the Union Bank of Australia to form the ANZ Bank, one of the "Big Four" banks remaining in operation in Australia today.

The activities of the Bank of Australasia in the time between its return to WA in 1894 and it being absorbed into the ANZ bank have not been written published in an accessible format, if at all.