In 1817 the population of Australia was 15,000 and the population of Sydney was 5,000. There were no banks and no stable monetary system in the country. Promissory notes, British Treasury Bills, rum, foreign coins and barter were all being used as currency, creating a state of financial instability. Aware of the need to have a stable financial institution to support the emerging economy, in February 1817 Governor Macquarie signed a charter of incorporation which established the first bank in Australia – the Bank of New South Wales.
The early years of the bank were difficult. It was often disparagingly referred to as “the convicts bank” because so many of its shareholders were ex-convicts. It was also criticised for not doing enough to assist the expansion of the colony, particularly lending to landowners. In 1821 it was discovered that the Chief Cashier had stolen half of the bank’s subscribed capital, none of which was ever recovered.
With the discovery of gold in New South Wales and Victoria in 1851, the bank began a major expansion, setting up agencies and gold-buying agents at every new mining site and in emerging country towns.
The Bank of New South Wales established a branch in London in 1853. By 1888 the bank had 150 branches throughout Australia and 31 in New Zealand.
The Bank of New South Wales successfully survived the depression of the 1930s and adapted to the changing demands of increasingly globalised banking.
The Bank merged with the Commercial Bank of Australia in 1982 and changed its name to Westpac Banking Corporation. Today, Westpac is Australia’s second-largest bank by assets with 12.2 million customers and almost 1,200 branches across the country.