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• Australia’s 131 banks differ in size by several orders of magnitude. 
• Collectively, the 4 major banks account for around 72% of banking system assets, down from their recent peak of 77% in 2015.
• There are 5 medium banks in Australia with a joint market share of 12%; this group includes most banks commonly referred to as mid-tier or regional banks. The medium banks’ market share had expanded around 3 percentage points in the 5 years preceding Australia and New Zealand Banking Group’s (ANZ’s) acquisition of Suncorp Bank (a medium bank) in July 2024. 
• The 74 smallest banks make up 6% of the banking system and are mostly mutual institutions; the number of mutual institutions has fallen from over 200 in the year 2000 as credit unions and building societies (CUBS) have consolidated. 
• Foreign branches – of which there are 48 – make up around 9% of the banking system and mostly serve wholesale customers.

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•  Heightened geopolitical tensions are already leading to economic and financial fragmentation, and a further deterioration in the international security environment remained a risk for the global economy and financial system;
• These included the challenges associated with cyber threats and managing dependencies on third-party service providers. The increasing digitalisation of financial services and the nature of operational connections across the financial system were likely to make these vulnerabilities more challenging to manage over time;
• The Council noted the potential for liquidity shocks to be amplified through the financial system. The potential for rapid deposit runs had been highlighted by international events in 2023. It was also noted that there are increasing interconnections between the banking and superannuation sectors, which can increase contagion risk;
•  Consistent with their long-standing focus on household debt in Australia, CFR agencies continue to closely monitor and assess developments in this area;
•  Understanding, measuring and preparing for the effects of both the physical and transition risks of climate change is a key priority for the financial system, in line with the Government’s sustainable finance strategy.