Rates up but debt appetite still healthy
(16 July 2008 – Australia) East & Partners has released the latest issue of its Corporate Banking Markets Report, part of a program covering businesses with annual turnover from A$20 to A$340 million per annum.
The program is an ongoing research service which delivers a range of analytics including market share and customer satisfaction, as well as the engagement and appetite for debt, balance sheet and treasury products.
Each report is based on direct interviews with a natural sample of some 880 Corporate businesses Australia wide.
The latest Corporate Banking Markets report finds that middle market businesses are increasingly feeling the pinch of rising interest rates.
Among businesses spoken to in July, 18.7 percent reported increases in lending rates, up from just 6.8 percent of businesses reporting rate increases six months ago.
But many Corporates remain immune to short term changes in lending rate rises due to the fixed nature of their loans, with 80.3 percent reporting no movement in their lending rates so far this year.
Moreover, the strong appetite to take on more debt persists in this market.
Fully 70.1 percent of businesses spoken to in July intend to take on more debt during the next six months, up from 68.1 percent at the start of the year.
These forward intentions are a telling indicator of middle market businesses’ optimism about their future prospects.
NAB and CBA look set to continue their dominance of the Corporate lending market with both banks’ lending market share firmer in the past six months.
By contrast, Westpac and ANZ have both experienced lending market share decline in the half year to July.
Each report is based on direct interviews with a natural sample of some 880 Corporate businesses Australia wide.
The latest Corporate Banking Markets report finds that middle market businesses are increasingly feeling the pinch of rising interest rates.
Among businesses spoken to in July, 18.7 percent reported increases in lending rates, up from just 6.8 percent of businesses reporting rate increases six months ago.
But many Corporates remain immune to short term changes in lending rate rises due to the fixed nature of their loans, with 80.3 percent reporting no movement in their lending rates so far this year.
Moreover, the strong appetite to take on more debt persists in this market.
Fully 70.1 percent of businesses spoken to in July intend to take on more debt during the next six months, up from 68.1 percent at the start of the year.
These forward intentions are a telling indicator of middle market businesses’ optimism about their future prospects.
NAB and CBA look set to continue their dominance of the Corporate lending market with both banks’ lending market share firmer in the past six months.
By contrast, Westpac and ANZ have both experienced lending market share decline in the half year to July.
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