The State Bank of Victoria was an Australian

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

that existed from 1842 until 1990 when it was taken over by the

Commonwealth Bank The Commonwealth Bank of Australia (CBA), or CommBank, is an Australian multinational bank with businesses across New Zealand, Asia, the United States and the United Kingdom. It provides a variety of financial services including retail, busines ...

. It was owned by the

State of Victoria Victoria is a state in southeastern Australia. It is the second-smallest state with a land area of , the second most populated state (after New South Wales) with a population of over 6.5 million, and the most densely populated state in Au ...

History

A government-controlled

savings bank A savings bank is a financial institution whose primary purpose is accepting savings account, savings deposits and paying interest on those deposits. History of banking, They originated in Europe during the 18th century with the aim of providi ...

had been founded on 1 January 1842 as the Savings Bank of Port Philip. Other independent savings banks merged over time and this development was recognised by legislation in 1912, which reconstituted the bank as the State Savings Bank of Victoria. In 1980 its name was changed to the State Bank of Victoria, the name it had until its sale to the

in 1990 and subsequent dissolution. The State Bank collapsed due to the weight of the grossly irresponsible lending made in the 1980s, in particular by its

merchant bank A merchant bank is historically a bank dealing in commercial loans and investment. In modern British usage it is the same as an investment bank. Merchant banks were the first modern banks and evolved from medieval merchants who traded in commodi ...

subsidiary

Tricontinental ''Tricontinental'' is a leftist quarterly magazine founded after the Tricontinental Conference 1966. The magazine is the official publication of the Organization of Solidarity with the People of Asia, Africa and Latin America (OSPAAAL) which also p ...

, after the

Reserve Bank of Australia The Reserve Bank of Australia (RBA) is Australia's central bank and banknote issuing authority. It has had this role since 14 January 1960, when the ''Reserve Bank Act 1959'' removed the central banking functions from the Commonwealth Bank. T ...

decision to increase interest rates in 1989 brought about the deep recession that put pressure on those financial institutions that were heavily exposed to the property market. Another contributor to the State Bank’s decline was its acquisition of the already troubled

Australian Bank Australian Bank (ABL) was an Australian retail bank that operated between 1981 and 1989. It was established by Perth businessman Garrick Agnew (its first chairman) and Sydney-based Mark Johnson (its first CEO). Johnson was also a co-founder ...

in January 1989. Tricontinental eventually collapsed with losses of A$1.5 billion, which threatened the existence of the State Bank and led to its sale to the Commonwealth Bank.Hugo Armstrong (1992), 'The Tricontinental Affair,' in

Mark Considine Mark Considine (born 1953) is an Australian political scientist, who specialises in public sector reform, and reforms of social services. Since 2018, he has been Provost of the University of Melbourne. He is a Fellow of the Academy of the Social ...

and Brian Costar (eds.), ''Trials in Power. Cain, Kirner and Victoria 1982-1992'', Melbourne University Press, Carlton, Ch.3 The overall sale price was A$2.0 billion. The collapse of the State Bank was a key factor in the defeat of the State Labor government led by

Joan Kirner Joan Elizabeth Kirner (née Hood; 20 June 1938 – 1 June 2015) was an Australian politician who was the 42nd Premier of Victoria, serving from 1990 to 1992. A Labor Party member of the Parliament of Victoria from 1982 to 1994, she was a mem ...

and the election of the

Liberal Party The Liberal Party is any of many political parties around the world. The meaning of ''liberal'' varies around the world, ranging from liberal conservatism on the right to social liberalism on the left. __TOC__ Active liberal parties This is a li ...

led by

Jeff Kennett Jeffrey Gibb Kennett (born 2 March 1948) is a former Australian politician who was the 43rd Premier of Victoria between 1992 and 1999, and currently a media commentator. He was previously the president of the Hawthorn Football Club, serving ...

, at the

1992 Victorian state election The 1992 Victorian state election, held on Saturday, 3 October 1992, was for the 52nd Parliament of Victoria. It was held in the Australian state of Victoria to elect all 88 members of the state's Legislative Assembly and 22 members of the 44-me ...

References

External links

State Bank (Succession of Commonwealth Bank) Act 1990Public Record Office of VictoriaState Bank of Victoria House Plans and DesignsState Bank Victoria
Banks established in 1842 Banks disestablished in 1990 Defunct banks of Australia Economic history of Victoria (Australia) 1842 establishments in Australia State Bank of Victoria collapse Australian companies established in 1842 Australian companies disestablished in 1990 Defunct government-owned companies of Victoria {{VictoriaAU-gov-stub

History

See also

References

External links