Analysis of ANZ and BOQ Financial Performance in Australian Banking Industry

Principals of Financial Markets 1
PRINCIPALS OF FINANCIAL MARKETS
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Principals of Financial Markets 2
Executive Summary
The paper presented the top-down as well as bottom-up analysis. As per the top-down
analysis, Australia was found to be the most developed nations worldwide. In fact, it was
found out that the country is the most developed in terms of low inflation rate, increased GDP
growth rate as well as decreased interest rate. Further, it was established that the increased
economic outlook in Australia is the key contributor to the country banking industry being
amongst the most competitive and principled industry across the globe. In fact, it is found out
that ANZ had restively higher profitability ratios in comparison with the BOQ.

Principals of Financial Markets 3
Introductions
The Australian banking sector is considered as one of the most competitive sector in the
country history. The industry is dominated by various financial institutions with the most
prominent one being BOQ, ANZ, NAB, Westpac and Commonwealth among others.
Basically, the banking sector is the most profitable and competitive sectors within Australia
(Focus Economics 2018). Its four major banks are amongst the global largest financial
institutions by the market capitalization and are all ranked top 25 worldwide for the safest
financial institutions. Besides, the banking industry is one of the main contributor to
Australian economy contributing approximately $140 billion in the country gross domestic
product every year. In essence, Australian banking industry is the chief driver of the country
economic growth and employs approximately 450,000 personnel.
ANZ also referred to as Australian and New Zealand Banking Group is amongst the five
largest financial institution operating in Australia and first bank across New Zealand with a
total of market cap of around AU$ 93.4 billion (Investing.com 2018). The company was
founded in 1977 with headquarter is in Melbourne. It offers a wide range of the financial
services and products mostly including private, commercial and retail banking, as well as
wealth management to small businesses, institutional customers, corporate and retail clients.
The company operates across 1,337 points including representative offices, agencies, offices
and branches across over 34 nations. The bank operates through international and
institutional banking Australia segment private and global wealth banking. The Australian
segment comprises of commercial and retail sections with retail section offering housing
finances to different clients across Australia while the commercial section offers banking
services to small business, agribusiness clients and personal clients in both regional and rural
Australia (ADVFN 2018). The institutional and international banking segment mostly
operates vial transaction banking, global loans, global institutional, retail as well as Asia

Principals of Financial Markets 4
partnership all offering different financial services and products. It was ranked as one of the
most suitable financial institution worldwide in 2008 Dow Jones sustainability Index being its
second year the bank was granted this title.
Bank of Queensland also referred to as BOQ is the Australian retail financial institutions
whose headquarter is in Brisbane. It is amongst the oldest banks in Queensland with over 252
financial branches across Australia including 166 owner managed and 78 corporate managed
branches. It was founded in the year 1863 but later collapsed in the year 1866 as a result of
the severe financial crisis experienced this year (Bank of Queensland 2017). Over its
operations, the bank has acquired several banks among them the Stowe Electronic Switching
Limited leading it to rename to Queensland Electronic Switching Ltd in the year 1991. It also
acquired UFJ Bank in the Australia and New Zealand and also acquired the ATM solutions in
the year 2003. The bank has easy-to-understand banking services that assist or offer support
to its clients’ financial requirements. In essence, BOQ is amongst the top 100 Australian
firms ranked in term of market cap on ASX. It operates under three segment; that is BOQ
specialists, BOQ Finance as well as ST Andrew’s Insurance (Reuters.com 2018). The BOQ
Specialist usually delivers different banking solutions to a wide range of market including
dental, accounting and medical professionals. St. Andrew’s Insurance on the other hand, is
the leading Australian providers of the insurance both life and personal insurance. Further,
BOQ Finance is a wholly owned branch specializing in cash flow, structured finance and
asset solutions.
The Top-Down Analysis
This form of analysis comprises of the assessment of the large picture and then analysing
details of the smaller components. In this case, anyone utilizing the top-down analysis starts
with analysis of the global economy and then assesses some of the macro aspects or trends
taking place within the country which is believed to have relatively better opportunities for