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The first Governor of the Bank was Mr (later Sir) Denison Miller, an ex-Bank of New South Wales Inspector. He initially headed a staff of twelve. The Commonwealth Bank opened for business on 15 July 1912, offering savings bank facilities at both its solitary branch, 317 Collins Street, Melbourne and at 489 agencies located in post offices throughout Victoria. During the following year branches were established in the other capital cities, as well as in Canberra, Townsville and London. Postal agencies were also established across Australia.
In 1916, the Commonwealth Bank moved its headquarters from Melbourne, to its new head office building on the corner of Pitt Street and Martin Place, Sydney. During 1990 the Bank’s headquarters were relocated to 48 Martin Place, Sydney.
1920s – the Bank Board
The Bank’s Note Issue Board was established in 1920, assuming responsibility for note issue from the Federal Treasury. The Commonwealth Bank's first Governor, Sir Denison Miller, died in 1923 and upon his death a newly established Bank Board assumed responsibility for note issue from the Note Issue Board.
In 1928 the Commonwealth Savings Bank (CSB), previously designated the Savings Bank Department, officially came into being.
1930s – Central Banking functions and Amalgamations
During the Great Depression years of the 1930’s, the Commonwealth Bank grew considerably following amalgamations with the State Savings Banks of both Western Australia and New South Wales (1931). It had previously merged with similar institutions in Tasmania (1912) and Queensland (1920).
The 1920s and 1930s also saw the Bank's functions expand to encompass those of a Central Bank. These powers were codified by emergency legislation enacted during the early days of World War II.
Staff were also required to re-open branches for the receipt of Savings Bank deposits between the hours of 7.00pm and 8.30pm on Friday evenings, as well as provide a Saturday morning service.
1940s – Post-War Expansion
The Commonwealth Bank was actively involved in the war effort as both an agent of the Federal Government and as banker for numerous scattered Australian and Allied service personnel. Many staff members served with distinction, whilst war actually came to some Northern Territory branches which were evacuated due to enemy action.
Post-war legislation reinstated the role of the Governor in place of the Bank Board; set up a general bank division; and created special facilities to provide finance for post-war activities such as housing construction and industrial development. As part of this home loans, originally called "Credit Foncier" loans, made their first appearance in 1946.
The Commonwealth Bank’s branch expansion program resumed after World War II. Due to Government restrictions on the building industry and the subsequent shortage of building materials, the majority of branch buildings constructed in 1946 and 1947 were prefabricated structures. Ten branches were opened in 1946, and in 1947, 61 new branches were established.
The late 1940s and early 1950s were time of unprecedented change and growth for both Australia and for the Commonwealth Bank. Hundreds of branches and agencies were opened to cater for the immense increase and spread of population throughout the country. The Bank made special efforts to assist migrants with the establishment of a Migrant Information Service.
1950s – Commonwealth Banking Corporation established
During the late 1950s, controversy over the Commonwealth Bank's dual functions as a central bank on the one hand, and a trading/savings bank on the other, came to a head. Legislative changes in the form of the Commonwealth Bank Act 1959 and the Reserve Bank Act 1959 formally divided the two operations.
The Reserve Bank of Australia was established on 14 January 1960, it assumed control of all central banking activities. The remaining functions, ie trading/savings bank activities, together with the newly constituted Commonwealth Development Bank, came under the auspices of the renamed Commonwealth Banking Corporation.
Commencing in the late 1950’s, mechanisation came to branches, taking over from traditional hand-posting methods that had been in use since the Bank first opened.
1960s – Significant Changes
Many significant banking developments occurred throughout the 1960s. The Bank celebrated its Golden Jubilee in 1962, Saturday morning trading ceased between 1961-1963. Personal Loans made their appearance in 1963, Decimal Currency, Christmas Club Accounts and variations on traditional Savings accounts, as well as the employment of part-time staff were introduced in 1966.
Improved career opportunities for women became available in 1967 and in December 1969 the Bank introduced the "Black Light" Signature System, which involved the recording of an invisible signature in passbooks enabling customers to withdraw from their passbooks at branches other than their own, without making prior arrangements.
1970s – New Technology
Computers commenced to change forever the way work was done during the Bank's first 50 years. The pace of change accelerated markedly during the next two decades.
Office records commenced being maintained by computer initially in the savings bank section. This process (later) culminated in branches becoming part of the Commonwealth Bank’s expanding "on line" computer network. The system extended to every branch in Australia following Norfolk Island branch joining the network on 15 July 1985.
During the 1970s, the Commonwealth Bank diversified its operations to an unprecedented degree, entering the fields of home insurance and travel in 1974 and forming its own finance company, Commonwealth Bank Finance Corporation Lid (CBFC Ltd), the following year.
In 1974 the Bank’s Papua New Guinea operations (part of the Island Branch network) were formally handed over to the Papua New Guinea Banking Corporation. This was followed by the Solomon Islands operations handover in 1981 to the National Bank of Solomon Islands Limited. During this time important points of representation were opened in several major countries.
The Commonwealth Bank has since become increasingly involved in foreign exchange dealings and overseas business generally; whilst financial assistance, available in ever increasing variety of forms, is being sought and provided in sums undreamed of by its founders.
1980s – De-regulation of the banking industry
De-regulation of the banking industry and the subsequent entry of foreign banks into Australia, in the mid 1980s, posed significant challenges to the Commonwealth Bank. These were met initially with restructuring of the Bank's internal organisation. Furthermore new products, many developed and targeted to meet the requirements of specific groups within the community, were constantly being developed.
The plastic credit and debit card, starting with the launch of Bankcard in 1974 then Keycard in 1981, MasterCard 1984, Visa 1993, Maestro and Cirrus facilities 1993, are now involved in the performance of numerous Bank transactions, including operation of the widespread automatic telling facility, Autobank, launched in 1981.
Computerisation has taken over most routine branch and administration functions, besides serving customers in forms such as EFTPOS (Electronic Funds Transfer at Point of Sale) and electronic home and office banking - introduced in 1984.
During February 1989 the Bank acquired a 75% share in the New Zealand based ASB Bank Ltd. This strengthened the Commonwealth Bank’s asset base and established retail points of representation in New Zealand. The remaining 25% shareholding was originally held by the ASB Bank Community Trust, an independent entity within New Zealand. This 25%, was acquired by the Bank on 4 October 2000.
1990s – The Commonwealth Bank Restructuring Act
On 26 August 1990, the Commonwealth Bank entered into an agreement with the Treasurer of Victoria for the merger with the State Bank of Victoria. They merged on 1 January 1991, creating Australia's largest domestic bank and further strengthening the Commonwealth Bank's leadership in retail branch banking.
In December 1990 the Commonwealth Bank Restructuring Act was passed. This Act amended the Commonwealth Bank Act 1959, to provide for the establishment of the Bank as a company under the Corporations Law.
The Bank became a public company on 17 April 1991 and on that date ceased to be a statutory authority.
The Commonwealth Bank was privatised in three stages:
1. In July/August 1991 an offer of just under 30% of the issued shares in the Bank was made to the public. 230 million shares were issued on 12 September 1991 at an issue price of $5.40.
2. In October 1993, the Commonwealth further reduced its shareholding in the Bank to 50.4% of the total number of issued voting shares. 178 million shares were listed on 1 November 1993, at an issue price of $9.35 for retail investors and $9.60 for institutional investors.
3. In July 1996, the Australian Government made a public offer of its remaining 50.4% shareholding in the Bank. In conjunction with this offer, the Bank agreed to buy back 100 million shares from the Commonwealth of Australia. The buyback price was $10.01 per share, with the Bank paying the Commonwealth of Australia just over $1 billion. The public offer and buyback were completed on 22 July 1996. The Government's public offer was for 399 million shares. Investors paid $6, with the remaining instalment of $4.45 being due on 14 November 1997. Investors were entitled to the three dividends payable in the intervening period.
As at 13 August 1997 the Commonwealth Bank had 930,177,235 shares on issue to 426,575 shareholders (including holders of instalment receipts).
The early 1990s also saw the Commonwealth Bank undergo extensive organisational restructure. Changes included the division of Retail Banking into three units, Personal Banking, Business Banking and Banking Operations (initiated April/May 1993), an enhanced Customer Service Program, (including a new customer service computer system, ASSIST), which aimed to achieve and still does, a more disciplined approach to customer service (initiated May 1993, initial ‘roll out’ QLD, August 1993). The latter included the removal of the majority of processing functions from branches giving staff the opportunity to focus exclusively on customer service and sales.
On 2 September 1991, the Bank introduced a new corporate logo based on the stars of the ‘Southern Cross’.
As at January 1993 all the assets of the Commonwealth Savings Bank of Australia (CSB) were vested in and all of its liabilities were assumed by the Commonwealth Bank of Australia (the Chief Entity) in terms of the Bank Integration Act 1991. The Commonwealth Savings Bank ceased operations as of that date.
The Maestro and Cirrus services were introduced on 19 April 1993. Maestro, an international equivalent of the Electronic Funds Transfer Point Of Sale (EFTPOS) system, allows the purchase of goods and services by the use of a Keycard, at Maestro outlets around the world whereby payments are made by the automatic transfer of funds held in Australian bank accounts.
Cirrus, an Automatic Teller Machine (ATM) network enables depositors access to their primary savings, cheque and credit card accounts with their keycard, at overseas ATM's which display the Cirrus logo.
During 1994 Customer Service Centres were opened Australia wide in capital cities. These centres provide a telephone 'Hotline' service for customer's banking enquiries.
As part of the Commonwealth Bank's enhanced Customer Service Program, Customer Relationship Model (CRM) branches were introduced in August 1994, initially in Victoria. These branches featured a new format of branch interior and design. The new layout separated the areas of customer need - Automatic Telling Machines for electronic banking, customer studios (interview offices) for longer enquiries or for those interviews that require privacy, tellers counters, and a customer assistance counter, where the customer is greeted on arrival and directed to the area in the branch appropriate for their needs.
The Bank’s Internet site was launched on 29 September 1995.
CommSec (Commonwealth Securities Limited) commenced operations in 1995 as a low cost telephone based share trading service for the 'Do it Yourself' investor. In 1997, the CommSec Internet site launched, developing the business to become Australia's leading broker.
2000+ – The New Century
On 10 March 2000, the Commonwealth Bank and Colonial Limited announced their intention to merge, with seven Commonwealth Bank shares being offered for twenty Colonial Shares. The merger received final approval from the Supreme Court of Victoria on 31 May 2000 and was completed on 13 June 2000.
The combined strengths of the two companies with their different but complementary product sets, customer bases and distribution networks creates a strong, dynamic and globally relevant financial services group headquartered in Australia.
The Bank’s credit ratings were affirmed following the merger with Colonial Limited. The long term credit ratings of the Bank remain at AA-, Aa3 and AA from Standard & Poor’s, Moody’s and Fitch respectively as at 30th June 2001.
The Bank was awarded Bank of the Decade in November 1999 and named Best Bank at the Australian Banking and Finance Awards for the years 1996, 2000 & 2002.
The largest change program in the Bank, 'Which new Bank' was announced in 2003 and marked the start of significant cultural change in order to achieve the Bank's vision, 'To excel in customer service'.
New technology was rolled out across the Bank in 2005, combined with process improvements. The success of the program is indicated by the six month results to December 2005.
NetBank, the Bank's Internet banking facilities were upgraded in 2005, to improve security and provide a wider range of services for the Bank's 1.9 million online customers.
Banking opportunities in Asia saw the Bank acquire part ownership of Indonesian Bank (PT Bank) and establish strategic cooperation agreements with Chinese Banks Jinan City and Hangzhou City Commercial Banks. Recently, a representative office was established in Bangalore, India.
From its humble beginnings over 90 years ago, with one office and twelve staff, the Commonwealth Bank now has more than 135,000 EFTPOS terminals throughout Australia, 3,200 ATMs, over 1,000 branches and service centres, 3,800 agencies represented through Australia Post offices, and over 35,000 (full-time equivalent) staff.
For the half year ended 30 June 1915, the Bank's first recorded annual profit was £2,222. For the half year ended 31 December 2005, statutory net profit after tax was $1,999 million.
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