We all know by now that New Zealand’s four biggest banks are owned by Australia’s four biggest banks. Westpac Australia owns Westpac New Zealand. ANZ Australia owns ANZ National in New Zealand. National Australia Bank (NAB) owns the BNZ and the Commonwealth Bank of Australia (CBA) owns ASB.

All four big Australian banks are listed on the Australian Stock Exchange. None have shareholders that have a controlling interest, and their shares are spread around fairly diversely, especially among themselves. While they don’t have direct shareholdings in other banks (and are not allowed to by Australian competition law) they do invest customers’ money on under their name. According to their respective 2004 Annual Reports for instance, ANZ Nominees is the sixth largest shareholder of Westpac ordinary shares and Westpac Custodian Nominees is the third largest shareholder of ANZ shares. And on it goes.

But in among all that mutual ownership are two big American banks with significant shareholdings (on behalf of their customers) in all four Australian banks; JP Morgan Chase and Citicorp.

JP Morgan Nominees is the largest shareholder of Westpac and CBA with 17.09% and 9.60% holdings respectively. It is also the second largest shareholder of NAB with 10.32% holdings, and its affiliated company, Chase Nominees, is the second largest shareholder of ANZ, with 13.26% of the company.

Citicorp Nominees is the fourth largest shareholder of all four Australian banks with between 2.56% and 6.36% holdings in each bank.

“There is a perception that New Zealand’s banking industry is largely owned by Australian banks. That remains true, but the story doesn’t stop there. We need to be aware of the international financial influences on those four Australian banks. The Australian banks are not big fish in the world money markets.” Said Finsec General Secretary, Andrew Casidy.

“That influence, if not monitored can translate directly into pressure for higher profits at the expense of jobs and communities.”

So what is JP Morgan Chase?

J.P. Morgan Chase & Co. is a global bank and finance company with offices in more than fifty countries. It started as the US company, Chemical Bank, which took over Chase Manhattan, then later JP Morgan. In 2004, the company acquired Chicago based Bank One. Chemical Bank has often previously been the largest bank in the United States. Its major activities are investment banking, private banking (providing financial services to wealthy people throughout the world), and private equity.

In June this year J.P. Morgan Chase agreed to pay US$2.2 billion to Enron investors who accused the bank of participating in the accounting scandal that led to Enron’s collapse. Enron tumbled into bankruptcy in 2001 taking millions off investors, including tens of thousands of people’s retirement savings. The settlement follows close on the heels of the US$2 billion dollar settlement J.P. Morgan Chase paid to investors who were caught up in the WorldCom scandal.

And what is Citicorp?

Citibank was founded in 1812 as City Bank of New York. In 1894 it became the largest bank in the United States. By 1930 it became the largest bank in the world. It changed its name to The First National City Bank of New York in 1955, then to Citibank in 1976. Citibank is the banking arm of financial services giant Citigroup, the largest company of its kind in the world.

Citigroup has alternated with General Electric in being the largest and most profitable corporation in the world.

Critics allege that Citigroup engages in questionable high interest rate lending in low-income communities across the United States, and now globally. It has also assisted Enron and others, resulting in similar settlements to those that JP Morgan was compelled to make.