Foreign Banks Operating in Australia
ADS Team
Author
September 6, 2026
4 days ago
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In short: Foreign banks operate here in two forms: a foreign ADI branch, which cannot generally take retail deposits, and a locally incorporated subsidiary, which can. Most concentrate on wholesale, institutional and commercial lending rather than retail home loans, which is why you rarely see them on a broker panel.
Key takeaways
- Foreign bank branches are restricted from accepting retail deposits from individuals.
- A locally incorporated subsidiary is a separate Australian ADI with full obligations.
- The Financial Claims Scheme does not cover foreign bank branches.
- They matter to borrowers mainly in commercial, development and trade finance.
Branch or subsidiary - why the distinction matters
APRA authorises foreign banks under two different models, and the difference is not cosmetic.
A foreign ADI branch is part of the overseas parent, not a separate Australian company. It operates under the parent's capital and is subject to restrictions on taking deposits from individuals - the model is built for wholesale business. Critically, the Financial Claims Scheme does not apply to foreign ADI branches.
A locally incorporated subsidiary is an Australian company holding its own ADI authorisation, with its own capital held in Australia and full prudential obligations. Depositors get the same protections as at any other Australian ADI, including the Financial Claims Scheme.
What do they actually lend to?
| Segment | Foreign bank presence |
|---|---|
| Retail home loans | Limited - a few subsidiaries, rarely on broker panels |
| Commercial property and development | Meaningful, especially at larger ticket sizes |
| Corporate and institutional lending | Strong |
| Trade and export finance | Strong - often the reason a business banks with one |
| Project and infrastructure finance | Strong |
| Non-resident and expat lending | Occasionally, where the parent has the relationship |
The pattern reflects where a foreign parent has an advantage: an existing relationship with a multinational client, expertise in a sector, or a funding cost that works at institutional scale but not for a retail deposit business built from scratch.
When does this matter to you?
Three situations, all of them outside the standard home loan.
- Trade finance. An importer dealing with a supplier in a particular country often finds the bank with a branch network at both ends is the practical choice.
- Large commercial or development finance. At scale, the lender pool broadens well beyond the domestic majors.
- Non-resident or expat lending. Domestic appetite for foreign income has tightened over the years; a foreign bank with a relationship at both ends occasionally has appetite where Australian lenders do not.
If you are considering a deposit with a foreign bank, check APRA's ADI register for whether it is a branch or a locally incorporated subsidiary. That single fact determines whether the deposit guarantee applies.
Frequently asked questions
Are deposits with foreign banks in Australia guaranteed?
Only if the entity is a locally incorporated Australian ADI. The Financial Claims Scheme does not cover deposits with foreign ADI branches. APRA's register of ADIs shows which model each institution uses.
Can I get a home loan from a foreign bank in Australia?
Some locally incorporated subsidiaries offer retail mortgages, but most foreign banks here focus on wholesale, commercial and institutional lending, so they rarely appear on broker panels.
Why do foreign banks focus on business lending?
Because their advantage is usually an existing global client relationship or sector expertise, not a domestic deposit base. Building a retail deposit and branch business from nothing is expensive and slow.
Are foreign banks regulated by APRA?
Yes. Both foreign ADI branches and locally incorporated subsidiaries require APRA authorisation to carry on banking business in Australia, though the prudential requirements differ between the two models.
Related reading
- Big Four vs Regional Banks vs Neobanks vs Non-Banks
- Trade Finance for Australian Importers
- White-Label Home Loans: Whose Loan Is It?
Sources
- Register of authorised deposit-taking institutions — APRA
- Financial Claims Scheme — APRA
Information current as at 2 September 2026.
General advice warning: This article contains general information only. It does not take into account your objectives, financial situation or needs, and it is not personal credit or financial advice. Consider whether it is appropriate for you and seek advice from a licensed credit representative before acting.
Any interest rate shown is an example only and is not an offer of credit. Where a rate is quoted, the applicable comparison rate is available from the relevant lender and should be considered alongside it.
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