One Hundred Together
contents
Forward x Introdction x Chapter 1: From foundation to the 1930s
xx
Chapter 2: Serving Australia through World War II
xx
Chapter 3: A new consumer culture
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Chapter Four: Unprecedented changes and demand
xx
Chapter Five: A wide variety of customer needs
xx
Chapter 6: Protectionism, booms and busts
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Chapter 7: Changing with the times
xxx
Chapter 8: Unification and privatisation
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Chapter 9: Evolving regulatory environment
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Chapter 10: Commonwealth Bank today
xxx
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foreward
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Foreward | 9
introduction
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Introduction | 11
sample chapter follows
Chapter 6
PROTECTIONISM
booms and busts
change and innovation
The 1970s was a time of change, innovation and challenge for Australia and the Commonwealth Bank. Equal pay for female staff was introduced in 1975, and in 1979, at the Clovelly NSW branch, Miss Rae Breen became the first female bank manager to be appointed. Technological progress continued with the establishment of electronic data processing centres in major centres and, in 1971, both the Australian and US dollars were linked for the first time. In 1973, Bankcard, a product supported by all banks, was introduced, revolutionising the way customers shopped. As a consequence, the Commonwealth Trading Bank established its Charge Card Division. Credit cards had arrived, and Australians embraced them with great enthusiasm.
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1971
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IBM Compte r rom
In 1973 Bankcard was introduced, revolutionising the way customers shopped…In 1975 equal pay for female staff.
Foreign banks During the 1960s, the rapidly growing presence in Australia of a number of foreign banks presented significant challenges for the banking industry. Attracted by Australia’s political stability, developing economy and mineral exports — and keen to forge links with Asia — the international giants sought also to service and profit from the many multinational corporations operating in Australia. Prohibited from establishing themselves on the same footing as their Australian counterparts, foreign banks gained entry into the financial system by other means, partnering with domestic banks and local and overseas financial institutions to form new enterprises, mainly in the merchant banking field, and establishing representative offices.
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The demand for finance During the 1960s, an entire fringe banking system emerged as finance companies, merchant banks and foreign banks jostled the established banks for market share. Unfettered by Reserve Bank restrictions, these newcomers to the financial sector grew rapidly. The ability of Australian banks to maintain their share of the local financial market in the face of this aggressive challenge was limited by official constraints on their operations, such as interest rate caps and control over lending. The banks were able to reduce their loss of business to competing institutions by increasing their marketing efforts and introducing new and improved banking services.
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1976
pistol practice wit h Police Constab le.
Rising to the challenge One of the most significant competitive and defensive moves made by Australia’s trading banks was their decision to increase their involvement in merchant banking and finance company operations, with many of them acquiring all or part of a major finance company. Spurred on by the growing threat and influence of foreign and merchant banks into Australia since 1960, the Commonwealth Bank moved into international finance with the formation of Australian European Finance Corporation Limited and the Bank’s finance company, CBFC Limited.
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1972
Staff of the A.C.T . and Queanbeyan branches at an informal gathering.
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Chapter six | 25
G e t w it h th e S t re n g th ‘ B a n d ’ .
Oil shocks of the 1970s In 1973 the Yom Kippur War between Israel and a coalition of Arab states led by Egypt and Syria precipitated an unprecedented drop in Middle East oil production, virtually halting exports to the US and Europe. In 1979, following the fall of the Shah in an Iranian revolution, there was a second oil shock. Prices went through the roof for a second time, escalating to an unprecedented $34 a barrel. These oil price shocks precipitated economic and social upheavals around the globe.
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The stalling economy Inflation began to rise in all countries in the late 1960s and early 1970s. But when the first oil shock brought the post-war boom to a sudden close, inflation was replaced by stagflation — inflation and economic stagnation existed side by side. Another marker of decline at this time was the current account deficit: the balance between exports and imports, and the flow of interest and dividend payments into and away from Australia. The implications seemed clear: the Australian economy was in terminal decline and about to discover that the good times and remarkable rates of growth it had enjoyed for so long couldn’t last forever.
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The property boom While the mining share market was collapsing in the early 1970s, much of the hot money switched into a new boom area: property. In the 1950s, a number of British insurance companies had begun building office blocks in Sydney. As the prices for office properties began to surge, local operators began to borrow money to speculate in suburban land acquisition and subdivision. The price of a house in Australia rose substantially from the early 1960s to the beginning of the 1970s. Although wages were rising, they could not keep pace with the increase in property prices. The property boom continued into the mid-1970s. As ever, an accompanying collapse in other areas of business activity caused by the oil shocks led to a crash in property prices. A number of property speculators and building companies went into receivership or were placed in liquidation. They included, in 1975, Mainline Corporation, which had a controlling interest in the Victoria-based Glenvill Homes, at that time the second largest commercial home builder in Australia. The property boom came to a shuddering halt.
A new wave of migrants Twenty years after a wave of migrants arrived from war-ravaged Europe and the UK, a new wave of migrants came to Australia from war-torn countries of South-East Asia, including Vietnam and Cambodia. As the faces of Australian immigrants changed, the Migrant Information Service was restructured to meet the changing demands.
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The Commonwealth Banks’ Migrant Information Service has been of national value in the help and integration of new settlers in Australia.�
7s B o u r k e S t r e e t , Me l b o u r n e 1 9 Chapter six | 29
nic eblame o c i ’ s k n he Ba t t n a table Eleph a l f n i e Th
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Of national value In the present situation where South-East Asian refugees make up a large number of the new arrivals, the Migrant Information Service has expanded its language cover to provide an interpreting service for these new settlers. Over the past 20 years Ministers for Immigration have recognised the service to the community given by the MIS, and Mr Grassby, now Commissioner for Community Relations, once said, “The Commonwealth Banks’ Migrant Information Service has been of national value in the help and integration of new settlers in Australia.� Naturally the MIS is proud of such statements but the real satisfaction comes from being in the position to assist the 2.8 million enquirers over the last 20 years. (Currency magazine, 1978)
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1977
S c h o o l e x c u rs i o n i n t o t h e B an k v o l t .
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The Bank in the Pacific In 1951, the Commonwealth Bank established a branch in the Solomon Islands. Between 1978 and 1981, the Solomon Islands team in Honiara was headed by Bob Dixon. “I had a staff of about 60 natives and eight boys from Australia,” recalls Bob. “In 1981, the Treasurer of Solomon Islands wanted to buy the bank, so I sent a message down to Sydney on the telex. Sir Ronald Elliott was the managing director of the Bank at the time, and he told me it wasn’t interested in selling.” Believing it would be in the Bank’s interests to sell to the Solomon Island’s government, Bob disagreed, and eventually the Bank was sold. “We sold 49 per cent of our interest and got around $8 million for it; it became the National Bank of the Solomon Islands,” Bob remembers. “When I went to the airport to fly home, many of them came out to the airport to say goodbye. I guess I was a bit of a father figure.”
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Frazer PM m l o c l a M d n a 1975 Sir Ron Elliott with Blake Art winner
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Women in charge By 1980, just under half of all bank employees were female. A year earlier, Miss Rae Breen had become the first woman to be appointed as a bank manager, when she took over the Clovelly branch in Sydney’s eastern suburbs. In the 1960s, married women were still not allowed to join the Bank, and when a woman married, she still had to leave it. In 1968, female staff were first allowed to compete for classified positions outside the typing or secretarial field. Permanent female staff were no longer required to resign, and the same year, maternity leave was introduced on a withoutpay basis, with provision for three weeks’ paid sick leave. In 1975, equal pay for female staff was introduced.
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Miss Rae Breen Chapter one | 37
One particular man I worked with, he said that if I got a promotion above him, he would resign,” Miss Hallinan says. “But I was about 46, and I had been with the Bank my whole career. When we were finally given the chance to do men’s work, it was really exciting.
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1972
Bank staff
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A girl from the outback Sheila Hallinan was 18 when she first joined the Parkes branch of the Bank in western NSW in 1936. Nearly 30 years later, she was the first female branch manager in the Sydney CBD. “I was made branch manager, in Sydney, at the King and Clarence St branch. It was a big step for a country girl,” recalls Miss Hallinan. During World War II, women were employed in traditionally male areas of banking, however that changed when the war ended and the men returned to their positions in the Bank. “Women were not allowed to do the sort of jobs that the men did; you were a stenographer and that was it,” says Miss Hallinan, “If you got married you had to leave. You could come back to the same job, but not get the same wage.” In 1967, the Bank introduced the Women’s Advanced Appointment Scheme, where selected women officers were able to perform clerical/administrative duties and to compete with men for classified positions. Sheila Hallinan was one of the select few. “We were given the opportunity to do men’s work, but we didn’t get the same wage,” remembers Miss Hallinan. “About 40 or 50 women were appointed to this scheme, and I was sent to the Sydney office.” While there was general acceptance of the scheme, some of Miss Hallinan’s male colleagues expressed some jealousy. “One particular man I worked with, he said that if I got a promotion above him, he would resign,” Miss Hallinan says. “But I was about 46, and I had been with the Bank my whole career. When we were finally given the chance to do men’s work, it was really exciting.”
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1971
Queen Street, Brisb ane branch
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1973
m e n i n s h o r t s , B a nk s t a f f
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1971
Left to right: Judy Gear, M arilyn Loeskow, Lorelle Redshaw Diane Bonato, Cheryl Lines and Carol Christensen.
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1975
Richard Bonynge, Dame Joan Alston Suther land, Sir Ron Elliott
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Chapter 7
CHANGING
with the times