The Trust Bank of Tasmania (trading as Trust Bank) was a state

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 ...

operating in

Tasmania ) , nickname = , image_map = Tasmania in Australia.svg , map_caption = Location of Tasmania in AustraliaCoordinates: , subdivision_type = Country , subdi ...

Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...

. It was founded in 1991 from the merger of the Tasmania Bank and Hobart Savings Bank/Savings Bank of Tasmania. It was sold to

Colonial Mutual The Colonial Mutual Life Assurance Society Limited, later Colonial Limited, and commonly known as Colonial Mutual, Colonial Mutual Life, and/or CML, was a diverse international financial services company headquartered in Melbourne, Australia. ...

in 1999.

Foundation

During the mid-1980s, the

Tasmanian Government The Tasmanian Government is the democratic administrative authority of the state of Tasmania, Australia. The leader of the party or coalition with the confidence of the House of Assembly, the lower house of the Parliament of Tasmania, is invite ...

attempted to create a single state bank by merging the two trustee banks, the Savings Bank of Tasmania and the Launceston Savings Bank. This failed, however; the Launceston Savings Bank eventually merged with the Perpetual Executors Building Society to form the Tasmania Bank in 1987. The Savings Bank of Tasmania continued to operate separately. Poor lending strategies led the Tasmania Bank to crisis in 1989, and through financial injection by the state government and the inclusion of the Savings Bank of Tasmania, a merger was considered. The state government deliberated, and put forth the ''Trust Bank (Arrangements) Act 1991'', which gained

Royal Assent Royal assent is the method by which a monarch formally approves an act of the legislature, either directly or through an official acting on the monarch's behalf. In some jurisdictions, royal assent is equivalent to promulgation, while in other ...

on 1 May 1991. The new company operated as a trustee bank structure like those of its predecessors. The Trust Bank was an important institution within the state for its short period, through financial backing of local business and by community sponsorship. Trust Bank was official sponsor of the

Tasmania cricket team The Tasmanian cricket team, nicknamed the Tigers, represents the Australian state of Tasmania in cricket. They compete annually in the Australian domestic senior men's cricket season, which consists of the first-class Sheffield Shield and the ...

in the late 1990s, and funded its own art prize. In 1997 Trust Bank was registered through the

Australian Securities & Investments Commission The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...

and became a

limited company In a limited company, the liability of members or subscribers of the company is limited to what they have invested or guaranteed to the company. Limited companies may be limited by Share (finance), shares or by guarantee. In a company limited by ...

corporation with shareholders. Regardless, Trust Bank had difficulty in maintaining competitiveness in the Australian capital market, especially during a time of large market share between rival credit unions and banks.

Acquisition

On 16 November 1999,

announced that it would acquire Trust Bank through its wholly owned subsidiary State Bank of New South Wales, for $149.1 million from the Tasmanian Government. At this time, Trust Bank had 40 branches statewide, and held more than 30% of the Tasmanian retail deposit market. 25% of outstanding loans in the state were through Trust Bank. The state government was adamant about privatisation as a way of benefiting Tasmanians, and Colonial agreed to no job losses or branch closures. Trust Bank continued as Colonial Trust Bank. On 10 March 2000 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 ...

and Colonial Mutual announced their intention to merge, which caused vocal concerns by the Tasmanian

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government. The

Federal Government A federation (also known as a federal state) is a political entity characterized by a union of partially self-governing provinces, states, or other regions under a central federal government (federalism). In a federation, the self-governin ...

argued that the Tasmanian government had to abide by competition policy. The

Australian Competition & Consumer Commission The Australian Competition and Consumer Commission (ACCC) is the chief competition regulator of the Government of Australia, located within the Department of the Treasury. It was established in 1995 with the amalgamation of the Australian Tra ...

did not oppose the merger. Up to 300 jobs and 30 branches were expected to close after the merger. On 31 May 2000 the two banks merged, after the Commonwealth Bank appeased the Tasmanian Government by agreeing to establish either one or more call centres in Tasmania, to provide $4 million for computers in local schools and to maintain rural branches; although this agreement was only applicable for five years. The Commonwealth Bank now held over 50% of the Tasmanian banking market. Trust Bank as a brand continued until the end of May 2000, when the Commonwealth Bank transferred accounts and policies to their division, and began integration of Colonial Trust Bank assets.

Legacy

An inquiry into the sale of Trust Bank was established in Tasmania by the Parliamentary Standing Committee of Public Accounts. In it, the benefits of the sale were prescribed as a revenue of $5 million from

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due to the sale, and $98.24 million had been used to reduce state debt. it was hoped a total of $134.1 million could be used in debt reduction. It also discussed pressure placed upon the directors of the Trust Bank, particularly in regards to funding and studies about

information technology Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of data . and information. IT forms part of information and communications technology (ICT). An information technology system (I ...

. Today, no significant physical proof of the Trust Bank exists. Many old branches were sold off or re-branded Commonwealth Bank. Following the sale, the state government passed the ''Trust Bank Sale Act 1999'' on 26 November 2000, which repealed all laws related to the Bank and officially disbanded the board of directors. The Act also established the Tasmanian Community Fund using money from the sale of Trust Bank, and the fund continues today.

References

External links

Tasmanian Community Fund
{{Authority control Banks established in 1991 Banks disestablished in 1999 Banks of Tasmania Former government-owned companies of Tasmania 1991 establishments in Australia 1999 disestablishments in Australia