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BankSA: more fire for St George

24th August 2005
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St George Bank's BankSA has revealed plans to expand its private bank in Australia.

BankSA's managing director has reportedly announced plans to double the client base of its new private banking unit, BankSA Private Bank, within the next year. Provided clients can access the same quality of products and services through the new BankSA channel as through parent St George's offerings, the new millionaires' bank should meet this goal.

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BankSA Private Bank currently has around 250 clients, and, according to Private Banker International magazine, BankSA managing director Rob Chapman is aiming for the private banking unit to have twice as many clients by this time next year.

Wealthy Australian clients are an attractive niche for BankSA Private Bank. There are three main reasons for this: firstly, there is a relatively large number of these clients, and this number is growing rapidly. Datamonitor research shows that the number of wealthy individuals in Australia grew at a rate of 12.8% averaged annually from 1999-2004, to reach 225,000 in 2004.

Secondly, wealthy Australians own a large percentage of total retail wealth, which, in absolute terms, amounted to A$322 billion in 2004.

Thirdly, wealthy Australians tend to have high income levels (as opposed to inherited wealth, for example), so they become even more valuable as time elapses. Australian Tax Office statistics reveal that the number of high-income individuals is increasing rapidly. For example, in the 2002-03 tax year, there were 64,785 individuals with taxable income of more than A$200,000, up from 36,162 individuals in the 1998-99 tax year.

To all intents and purposes, BankSA may as well be St George Bank, its parent bank, in South Australia. The same products and services are offered by BankSA and St George and identical contact numbers are provided for clients of each bank. Even the banks' websites are startlingly alike.

This is an important point: viewed as St George Private Bank with a regional brand, BankSA Private Bank is a valuable piece in St George's banking puzzle. The decision to keep the regional name makes sense as it maintains any affinity the bank has with south Australians. However, success will depend on whether the same quality of products can be delivered by the BankSA-branded offering as is accessible via the St George channel. If BankSA Private Bank can match St George's offerings, it should have little trouble doubling its client base as planned.
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