(10 June 2009 – Australia) The top 500 businesses in Australia have indicated that while they aren’t too happy with banks, the current lending environment means that they are less likely to switch.The latest East & Partners’ Australian Institutional Transaction Banking Markets Report for the six months to May 2009 shows that of the top 500 businesses in Australia by revenue, just 6.4 percent changed banks over the past six months.
As a result, around half as many big businesses are changing their banking relationships compared with one year ago.
The trend is set to remain, with nearly 90 percent of big businesses indicating that they will remain with their primary banker, 15 percent more than six months ago.
While big businesses are generally happy with their core transaction banking products, it is their lending products that are having a big impact on overall satisfaction.
When asked which bank they perceive as the best bank in the market nearly 15 percent of businesses simply said that there was none. This is despite having multiple banking relationships that they are sticking with.
East & Partners’ financial markets analyst, Peter Drennan, said that “while big businesses are happy with the core transactional products provided by banks, the problem lies in lending products in the current environment”.
“Tough debt covenants and security requirements being imposed on businesses have negatively effected banking relationships, however they are staying put in banking relationships to ensure that they can indeed get the funding that they require”, Mr Drennan added.