The State Bank of Victoria was an Australian bank that existed from 1842 until 1990 when it was taken over by the Commonwealth Bank. It was owned by the State of Victoria.
History
A government-controlled savings bank had been founded on 1 January 1842 as the Savings Bank of Port Philip. Other independent savings banks merged over time and this development was recognised by legislation in 1912, which reconstituted the bank as the State Savings Bank of Victoria. In 1980 its name was changed to the State Bank of Victoria, the name it had until its sale to the Commonwealth Bank in 1990 and subsequent dissolution.
The State Bank collapsed due to the weight of the grossly irresponsible lending made in the 1980s, in particular by its merchant bank subsidiary Tricontinental, after the Reserve Bank of Australia decision to increase interest rates in 1989 brought about the deep recession that put pressure on those financial institutions that were heavily exposed to the property market.
Another contributor to the State Bank’s decline was its acquisition of the already troubled Australian Bank in January 1989.
Tricontinental eventually collapsed with losses of A$1.5 billion, which threatened the existence of the State Bank and led to its sale to the Commonwealth Bank. The overall sale price was A$2.0 billion.
The collapse of the State Bank was a key factor in the defeat of the State Labor government led by Joan Kirner and the election of the Liberal Party led by Jeff Kennett, at the 1992 Victorian state election.
See also
References
- ^ "Canberra buys State Bank of Victoria". New Straits Times. 27 August 1990.
- D.T. Merrett (1992), "Bank and Financial Crashes, www.emelbourne.net.au/biogs/EM00153b.htm".
- "SBV victorious in battle for Australian Bank". The Canberra Times. 24 January 1989. p. 17. Retrieved 16 December 2018 – via National Library of Australia.
- Hugo Armstrong (1992), 'The Tricontinental Affair,' in Mark Considine and Brian Costar (eds.), Trials in Power. Cain, Kirner and Victoria 1982-1992, Melbourne University Press, Carlton, Ch.3
External links
- State Bank (Succession of Commonwealth Bank) Act 1990
- Public Record Office of Victoria
- State Bank of Victoria House Plans and Designs
- State Bank Victoria
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- Banks established in 1842
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