(19 October 2006 – Australia) Australian business customers are increasingly thinking about smaller and regional banks despite significant investment in advertising by several major banks, according to the East & Partners Business Banking Sentiment Index for September.The Index reveals that in the four months to September, the Big Four banks have
experienced a four percent decline in their collective share of customer mind
while smaller challengers, led by BankWest, St George and HSBC, increased their
mind share by 10 percent.
The Index also monitors which business banking advertising customers noticed
over the previous month with the results able to be presented by bank, state and
customer segment.
Westpac was the big winner in the September Index with almost a quarter of the
business banking market nominating the bank first when asked whose advertising
aimed at business customers “caught their eye”. Westpac dominated NSW with a
huge 34.4 percent of NSW saying they had noticed Westpac’s advertising. Westpac
was second in Victoria after National Australia Bank.
NAB increased its share of advertising awareness in September, to 19.8 percent
of the total market compared with 18.3 in August.
More customers noticed ANZ’s business banking specific advertising in September
than in August. Commonwealth Bank, however, continues to lag behind its peers in
terms of advertising awareness and mind share traction with less than four
percent of NSW customers saying they had noticed its advertising campaigns, just
4.2 percent in Victoria and 3.3 percent in Queensland.
“Only 3.7 percent of businesses recalled seeing CBA business bank
advertisements, compared to 24.4 percent of businesses who recalled seeing
Westpac advertisements and 19.8 percent of businesses who recalled NAB
advertisements,” East & Partners analyst Zoran Knezevic said.
“Of the businesses spoken to in September, only 13.2 percent listed CBA as the
top of mind business bank compared to 19.2 percent in June this year. That’s a
decline of more than 30 percent. They have been noticeable by their absence in
business banking advertising and it shows,” he said.
“Interestingly, although Westpac’s advertising awareness has increased
significantly, over the past four months, its share of mind has dropped, which
would indicate that getting onto a customer’s radar is not simply related to
advertising. ANZ is another where mind share is not keeping pace with
advertising awareness,” Mr Knezevic said.
East’s Index shows that only 6.6 percent of Queensland businesses did not recall
any business bank advertising in September, compared to the national average of
18.7 percent. Furthermore, only 11 percent of Micro Businesses could not recall
any business advertising in September, compared to 24 percent of SMEs and 21
percent of Lower Commercial enterprises.
“Although there has been a steady tick up in the number of customers recalling
business bank advertising, there remain a lot of opportunities for further
advertising by the banks, with nearly one in five businesses not recalling
seeing any advertising aimed at business customers,” Mr Knezevic said.
NAB remains the number one “top of mind” business bank with more than one
quarter of Australia’s businesses nominating it as the bank they think of first
as a business bank.
HBOS Australia’s BankWest was the best performer in terms of mind share among
business customers.
BankWest’s share of business customer mind grew by 35 percent in the period from
June to September to bring the national mind share to 6.5 percent, placing it
behind St George, Australia’s sixth top choice business bank. HSBC’s mind share
also grew strongly with 3.5 percent of businesses in September listing the bank
as the top of mind business bank.
While smaller banks such as BankWest and HSBC improved their mind shares
nationally, the Big Four also faced competition from regional banks which occupy
a significant share in the minds of customers in particular states or regions.
So while Bank of Queensland has a relatively low profile nationally, as many as
18 percent of businesses in Queensland ranked it as their “top of mind” business
bank placing it just behind NAB and ahead of Westpac, ANZ and CBA.
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For more information please contact:
Zoran Knezevic
Financial Markets Analyst
East & Partners
T: 02-9004 7848
M: 0410 400 156
E: zoran.k@eastandpartners.com