Chart of the Month - October 2025

Trust is the most important currency when it comes to money. Unfortunately for Australia’s banks, Australians don’t trust them very much.

As the chart below shows, only one Australian bank rates in the top 10 most-trusted brands in Australia. Australians trust hardware store chain Bunnings (nicknamed “Hammerbarn” in local cartoon Bluey), German supermarket chain Aldi, and Toyota before they trust the  highest-rated bank. Why aren’t the banks trusted more, and what does this mean for private credit?

Source: Roy Morgan

Trust in Australian banks has been improving

All four of Australia’s largest banks were in the top 10 most-distrusted brands in 2019. They were rubbing shoulders with Facebook (now Meta), still affected by the Cambridge Analytica crisis, and Rupert Murdoch’s News corp. But since the COVID-19 pandemic, the four major banks have been slowly regaining public trust and now have positive trust scores (see chart below).

Commonwealth Bank moved into the top ten most trusted brands for the first time in the June quarter. ANZ improved 104 places to 51st during the quarter. However, the biggest recent mover has been NAB, which has jumped 141 places in the first six months of 2025 to 19th place.

Meanwhile, Bendigo Bank and ING Australia have seen their trust levels slowly trend down.

It’s not about the interest rate

Interest rate changes do not appear to be a big driver of the banks’ trust scores. Interest rates were falling in 2019, but the banks’ trust scores fell during this time. Further, the banks’ trust scores rose during the pandemic as rates fell further, and continued to rise even after the RBA began raising interest rates in May 2022 to combat inflation (see chart below). Consumers’ trust in the four big banks does not seem to be a function of how much interest they are paying.

Scandals and the Royal Commission

Roy Morgan's trust survey only started in 2018. It is likely that the banks’ trust levels were so low in 2018 and 2019 because this coincided with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (2017 to 2019).

A Royal Commission is a government-appointed independent investigation into an important national issue.

The government instigated the Royal Commission because of a series of scandals involving banks and the financial services industry. This included ANZ refunding customers AUD 30 million in 2015 for miscalculating interest on credit card advances, CBA refunding customers $80 million in 2015 for failing to apply waivers and concessions for wealth package customers, several cases of fraud by financial planners from the banks, and alleged manipulation of the Bank Bill Swap Rate by ANZ and Westpac.

“... in almost every case, the conduct in issue was driven not only by the relevant entity’s pursuit of profit but also by individuals’ pursuit of gain, … Providing a service to customers was relegated to second place. Sales became all important. Those who dealt with customers became sellers.” Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, final report, preface.

Since the commission’s final report, the four major banks have largely behaved themselves, which could explain why their trust ratings have improved since 2019. However, in September, ANZ received a $240 million fine for “unconscionable” behaviour in trading government bonds, ignoring hardship applications by customers, and failing to pay interest on savings accounts.

"Time and time again, ANZ has fallen short," Joe Longo, Australian Security and Investment Commission, chair.

Space for private credit

Ever since the deregulation of the Australian financial sector in the 1990s, the four major Australian banks have appeared more focused on cutting costs and profit than customer service. Besides various scandals, they have also removed themselves from the mortgage market and have instead fostered independent mortgage brokers. Similarly, they have lost interest in servicing the small to medium business market, creating space for private credit.

Final thoughts

While the banks’ trust scores are improving at the moment, history tells us that the next major scandal is not too far away, and for ANZ, it has already happened.

The Royal Commission into financial services misconduct has made a difference, and ASIC keeps the banks honest from a prudential perspective. But the four major banks are big bureaucratic organisations that often take Australian customers for granted.

Removing the government prohibition on mergers among the big four would put the banks under increased competitive pressure. However, removing the prohibition would not be popular with the electorate. This leaves plenty of room for nimble and customer-focused financial services companies to find opportunities among dissatisfied bank customers.