Main Types of Financial Institutions

As at March 2024 [1]

The main types of financial institutions in Australia are:

Authorised Deposit-taking Institutions (ADIs)
Type of institution Main superviser/ regulator Main characteristics Number of institutions Total assets ($b)
Banks APRA Provide a wide range of financial services to all sectors of the economy, including (through subsidiaries) funds management and insurance services. Foreign banks authorised to operate as branches in Australia are required to confine their deposit-taking activities to wholesale markets. 96 6225.9[2]
Credit unions and building societies APRA Credit Unions and building societies provide deposit, personal/housing loan and payment services to members. 33 33.8
Non-ADI Financial Institutions
Type of institution Main superviser/ regulator Main characteristics Number of institutions Total assets ($b)
Money market corporations (broker-dealers) ASIC[3] Operate primarily in wholesale markets, borrowing from, and lending to, large corporations and government agencies. Other services, including advisory, relate to corporate finance, capital markets, foreign exchange and investment management. 12[4] 26.5
Finance companies (including general financiers and pastoral finance companies) ASIC[3] Provide loans to households and small- to medium-sized businesses. Finance companies raise funds from wholesale markets and, using debentures and unsecured notes, from retail investors. 236[4] 359.8
Securitisers   Special-purpose vehicles that issue securities backed by pools of assets (e.g. residential mortgage-backed securities). The securities are usually credit enhanced (e.g. through use of guarantees from third parties). – 172.0
Insurers and Funds Managers
Type of institution Main superviser/ regulator Main characteristics Number of institutions Total assets ($b)
Life insurance companies APRA[5] Provide life, accident and disability insurance, annuities, investment and superannuation products. Assets are managed in statutory funds on a fiduciary basis, and are mostly invested in equities and debt securities. 24 124.4[6]
General insurance companies[7] APRA[5] Provide insurance for property, motor vehicles, employers' liability, etc. Assets are invested mainly in deposits and loans, government securities and equities. 78 297.9
Health insurance companies APRA Provide insurance for private health costs. Assets are invested mainly in deposits and loans, government securities and equities. 30 20.3
Superannuation and approved deposit funds[8] APRA Superannuation funds accept and manage contributions from employers (incl. self-employed) and/or employees to provide retirement income benefits. Funds are controlled by trustees, who often use professional funds managers/advisers. ADFs are generally managed by professional funds managers and, as with superannuation, may accept superannuation lump sums and eligible redundancy payments when a person resigns, retires or is retrenched. Superannuation funds and ADFs usually invest in a range of assets (equities, property, debt securities, deposits). 1,365 3695.5
Public unit trusts ASIC Unit trusts pool investors' funds, usually into specific types of assets (e.g. cash, equities, property, money market investments, mortgages, overseas securities). Most unit trusts are managed by subsidiaries of banks, insurance companies or merchant banks. – 485.4
Cash management trusts ASIC Cash management trusts are unit trusts which are governed by a trust deed and open to the public and generally confine their investments (as authorised by the trust deed) to financial securities available through the short-term money market. – 25.5
Common funds State and territory authorities Trustee companies pool into common funds money received from the general public, or held on behalf of estates or under powers of attorney. Funds are usually invested in specific types of assets (e.g. money market investments, equities, mortgages). – 12.5
Friendly societies APRA Mutually owned co-operative financial institutions offering benefits to members through a trust-like structure. Benefits include: investment products through insurance or education bonds; funeral; accident; sickness; or other benefits. 10 10.0[9]

Authorised Deposit-taking Institutions in Australia

From 1 July 1998 on, this information is collated by the Australian Prudential Regulation Authority.

Representative Offices of Foreign Banks in Australia

From 1 July 1998 on, this information is collated by the Australian Prudential Regulation Authority.

Endnotes

These data are largely consistent with statistical table B1 (unless there have been revisions), with the exception of health insurers, which are separately identified here. [1]

Refers only to banks' domestic operations. It does not include assets of banks' overseas subsidiaries and branches. [2]

These institutions are required to meet disclosure, licensing and conduct requirements that ASIC administers in respect of all financial companies. While APRA does not prudentially regulate these entities, it has reserve powers to impose rules over non-ADI lenders that are judged to pose a material risk to financial stability. [3]

Reporting institutions with total assets below $50 million are not included. [4]

Public sector (e.g. State Government owned) insurance offices are not covered by Commonwealth legislation, nor supervised by the Australian Prudential Regulation Authority (APRA). [5]

Figure relates to total assets backing Australian policyholder liabilities on an unconsolidated basis which includes intra-group cross-investment. [6]

Total assets include public sector insurers, while the number of institutions only reflects private APRA regulated insurers. [7]

Self-managed superannuation funds (SMSFs) are regulated by the Australian Taxation Office. Number of institutions excludes life office statutory funds, pooled superannuation trusts, non-regulated public sector funds and SMSFs. Total assets is on a consolidated basis which excludes intra-group cross-investment. [8]

Figure relates to total benefit fund and management fund assets. [9]