(21 February 2012 – Australia) Planned borrowing among Australia’s Corporate middle market segment continues its decline as fewer companies say yes to borrowing and a growing number express uncertainty over their credit demand, research from East & Partners’ latest Corporate Banking Markets report has shown.Since January 2009 there has been a significant drop of 30.8 percent in the
total number of businesses with planned borrowing in the next six months. From
77.6 percent at the start of 2009 to 46.8 percent at the start of this year,
Australian Corporates are becoming more and more cautious about going to their
banks for credit.
The number of these same businesses saying outright that they have no planned
borrowing has increased by 8.6 percent in the three years since 2009 and the
amount of companies unsure if they will carry out any additional funding has
more than quadrupled from 5.5 percent to 27.7 percent in the latest round of
research.
Planned Borrowing in Next Six Months
| % of Total | ||||
| Jan 2009 | Jan 2010 | Jan 2011 | Jan 2012 | |
| Yes | 77.6 | 69.3 | 63.5 | 46.8 |
| No | 16.9 | 12.5 | 8.8 | 25.5 |
| Unsure | 5.5 | 18.2 | 27.7 | 27.7 |
| TOTAL | 100.0 | 100.0 | 100.0 | 100.0 |
Paul Dowling, East & Partner’s Principal Analyst commented, “These latest
results around middle market borrowing intentions reinforce the continuing theme
of forward uncertainty for much of Australian business outside those in or
attached to the resource sectors.”
“The lacklustre state of these leading predictors of business credit demand are
associated with a sudden decline in overall demand for banking products that is
also now in evidence. Banks looking for any top line revenue growth in this
market simply have to concentrate on really effective cross selling and margin
enhancement strategies that go beyond cost efficiencies with existing middle
market customers.” added Mr Dowling.
About East & Partners’ Australian Corporate Banking Markets report
A six monthly analysis of treasury, financial markets, debt, corporate finance &
advisory and working capital product engagement by Australian corporate
businesses with an annual turnover of A$20-530 million.
The program provides market share analyses by primary and secondary banker,
weighted share of wallet, share of customer mind and panel positioning. Also
monitored are corporate borrowing expectations, individual and market wide
importance ratings for product and relationship banking attribute, including
individual bank Relationship Manager Performance, together with bank-by-bank
satisfaction ratings.
For more information or to interview East & Partners on this report, please
contact:
Sian Dowling
Marcomms & Client Services
East & Partners
t: 02 9004 7848
m: 0420 583 553
e: sian.d@eastandpartners.com