(Australia) – The latest (December 2001) set of market share analyses across all Corporate Banking product sectors in the Australian market have just been released by industry analysts East & Partners for the top end (Top 500) of town, showing CBA and ANZ winning off Westpac and National but the Internationals gaining on all big 4 domestics.Marked shifts in positioning have taken place over the last 6 months, particularly so amongst those banks regarded as the holder of their primary corporate banking relationship by customers. Westpac is losing ground on this measure to competitive gains by, interestingly, the Commonwealth and ANZ and in a number of product areas the international investment banks. This is also apparent amongst NAB corporate customers, but more strongly in NAB’s case on a product by product basis rather than overall relationship holder.
Amongst the internationals displaying strong competitive gains UBS Warburg, JPMorgan Chase and Deutsche stand out, using their relative strengths in capital markets and advisory to increase their relationship ‘ownership’ of target corporates. This is often taking place using demonstrable expertise within an industry sector – something corporates are demanding more of and that the Big 4 have been trying to build into their account-facing teams for some time. By contrast, the Big 4 are at long last focussing on the real leverage value of their transaction banking relationships with these large customers, an asset the internationals do not have locally and one that corporate CFOs are also placing much more importance on.
This issue of ‘relationship ownership’ is now critical for banks with corporate accounts allocating more of their business in a particular area to their primary banker for that product. Equally, the ability of banks to cross sell product into their corporate base is becoming more challenged with corporate CFOs actively managing their allocation of business based on the product expertise seen to exist within their bankers. These product relationships are deepening. The ‘share of wallet’ gains, at an acceptable cost of sale, all banks are chasing in their target markets has become critical to profit.
These results are based on a 6-monthly interview process with the CFOs and Treasurers of the Top 500 Australian corporates as ranked by revenue.
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East and Partners