(12 January 2012 – Australia) New research from East & Partners’ latest Institutional Banking Markets report has shown an increased concentration of customer wallet share across all debt products over the past three years, however advisory services and FX products are continuing their reputation for being the most “banked away” products in the market.Of the seventeen Institutional banking product markets monitored by East &
Partners, primary wallet share has risen in nine of them covering all debt
products as well as Particular Industry Expertise, Call Money Market and
Commercial Paper. Since October 2009 wallet share in Commercial Paper has seen
the biggest climb in concentration to “main provider” bank with an increase in
wallet share of 14.1 percent over this three year period. Long Term Domestic
Debt and Short Term Domestic Debt have shown 2nd and 3rd greatest concentration,
with wallet share increases to main provider of 8.5 and 7.9 percent
respectively.
FX products including Futures, Options and Forward FX experienced temporary
increases in primary supplier share of Institutional customer wallet between
2009 and 2010. East’s most recent research, however, shows that wallet share
held by primary providers in all FX products have sharply declined and are now
below the level they were sitting at in October 2009.
East & Partners’ Principal Analyst Paul Dowling commented, “These numbers show a
very interesting divergence in the way in which very large business customers
are interacting with their banks. Where a mono-line lending relationship is in
place, the primary lending bank has been very successful in securing a
significantly greater share of that business with individual customers. This has
obviously been conditioned by concerns about access to credit and active
rebalancing of debt funding, including a much greater reliance by “named”
corporates on directly accessing offshore capital markets.”
“The asset sell-downs by international and niche lenders looking to repatriate
capital has also influenced this increased concentration of lending
relationships amongst Institutional Australia. A picture that is in stark
contrast to what is happening with more transactional oriented product markets,
in particular FX and Risk, where top of town customers are actively sharing more
of their business around a number of providers” Mr Dowling added.
Primary Banker Share of Wallet – Institutional Market
|
Current Average % of Business per Primary Provider Relationship |
|
| (N: 447) | |
| Cash Management, Debt and Bonds | |
| Call Money Market | 67.1 |
| Commercial Paper | 69.2 |
| Short Term Domestic Debt | 80.1 |
| Short Term FX Debt | 76.1 |
| Long Term Domestic Debt | 87.7 |
| Long Term FX Debt | 67.4 |
| Corporate Bonds | 94.4 |
| Treasury and Financial Markets | |
| Spot FX | 27.1 |
| Forward FX | 39.6 |
| Forward Rate Agreements | 51.2 |
| Swaps | 44.7 |
| Futures | 54.9 |
| Options | 45.0 |
| Corporate Finance and Advisory | |
| Equity Raising | 88.8 |
| Particular Industry Expertise | 51.5 |
| Corporate Advisory Services | 50.8 |
| Merger and Acquisition Advice | 65.4 |
About East & Partners’ Australian Institutional Banking Markets report
East & Partners’ Institutional Banking Markets report is a six-monthly research
service delivering market share, wallet share, customer satisfaction, mind
share, customer engagement and churn analysis for banking products among
institutional enterprises turning over A$530 million + per annum. The report is
based on direct interviews with the top 500 businesses in Australia.
For more information or for further interview based insights from East &
Partners, please contact:
Sian Dowling
Marcomms & Client Services
East & Partners
t: 02 9004 7848
m: 0420 583 553
e: sian.d@eastandpartners.com