The potential Westpac/St George merger, which would create the country's biggest lender by market value, is set to edge Sydney slightly further in front of Melbourne as Australia's premier banking hub.
Both Westpac and St George are Sydney-based, so the newly combined bank would also be headquartered in the harbour city.
Mary Grant, principal consultant in recruitment firm Hudson's banking and finance division, comments: "Westpac's Sydney headquarters is not big enough for St George staff, but they will probably keep the St George brand for a while. They may split operations and keep retail banking in Kogarah," she said.
The creation of Australia's top bank in Sydney reflects a drift of jobs away from Melbourne. Leon Carter, national secretary of the Finance Sector Union, says 42% of the union's members now work in NSW, compared with 26% in Victoria.
"The shift was well underway before the credit crunch...Sydney has worked hard to promote itself as a global financial hub, but Melbourne still has a role to play. By focusing on its back office and superannuation expertise, Melbourne is fast becoming the Boston of Australian banking," says Carter.
Luke Heath, chief executive, Chandler Heath Executive Recruitment, says the Westpac/St George merger will have little bearing on banking roles. "The trend is for most senior financial markets roles to be in Sydney. Melbourne will still have representation, but Sydney will continue to be the pricing hub," says Heath.
Grant says the Melbourne-based banks - ANZ and NAB - also have operations in Sydney and senior staff commute between the two cities. "Both ANZ and NAB have a lot of institutional banking in Sydney anyway. If they're hiring someone they are flexible about location because so many employees travel back and forth between Sydney and Melbourne," she adds.