Cartoon by Stonie depicting the start of the Royal Commission investigation into the State Bank records.

The State Bank of South Australia financially collapsed in 1991. As the State Bank's deposits were underwritten by the State Government, the Bank's downfall plunged the state into an estimated $3 billion debt. The Bannon state government was generally blamed for the financial disaster. Consequently, Premier John Bannon resigned in 1992, and the SA Labor Party was strongly defeated at the 1993 elections.

The bank was formed in 1984 by the merger of two public banks, the Savings Bank of South Australia and the State Bank of South Australia. Both these banks had been established in the 19th century, with a main focus on community service.

Dr Greg McCarthy, author of Things fall apart: a history of the State Bank of South Australia, comments that following the merger of the two banks, and 'with the changes in global culture and the deregulation of the banking market in the 1980s', the State Bank's primary emphasis became profit making. 'Almost overnight the bank had become a 'greed is good' bank, and it didn't have the backing or the know-how to make that work'. McCarthy states that 'much more responsibility lay at the feet of those people doing the day-to-day deals rather than poor handling by the then Labor State Government' (New insight into State Bank collapse).

The State Bank of SA is now known as BankSA and is part of St George Bank. BankSA is South Australia's largest financial institution.

State Bank of South Australia

McCarthy, Greg. Things fall apart: a history of the State Bank of South Australia, Melbourne: Australian Scholarly Publishing, c2002

Royal Commission into the State Bank of South Australia. Final report, Adelaide, S. Aust.: South Australian Government Printer, 1993

South Australia. Auditor-General's Dept. Report of the Auditor-General on an investigation into the State Bank of South Australia : pursuant to Section 25 of the State Bank of South Australia Act 1983 (as amended), Adelaide: Auditor-General's Dept., 1993

Manning index of South Australian historysee: Banking and finance

'New insight into State Bank collapse' University of Adelaidesee: Latest News: News Archive: 6 August 2002