Westpac wants top SME spot
(11 March 2009 – Australia) Westpac has strong declared its intentions to take over the top-bank mantle in the Australian SME market from major player NAB.
The Australian newspaper reports that Westpac has outlined a plan to overtake NAB in the Small to Medium sized business segment.
Head of retail and business banking at Westpac, Peter Hanlon said that, unlike recent announcements by CBA and ANZ, Westpac's ambitions in the SME segment are uncapped.
Both CBA and ANZ have committed to lend the same amount as last year, while Westpac has left their intentions unlimited.
After the acquisition of St George, Westpac has an even more prominent position in the SME market.
Westpac’s Hanlon said that loans to SMEs with annual turnover of up to $10 million expanded at around 1.3 times system for the bank, due to unmet demand from the withdrawal of second-tier lenders and foreign banks.
However, the ability of SMEs to find credit may still be a point of contention.
Hanlon said that the hole in the market could be 20 to 30 percent, which used to be filled by smaller players making money out of thinner margins and looser credit criteria.
He said that part of that 30 percent will be open to Westpac, and the bank has had a flood of inquiries.
However not all credit applications in today’s constrained environment will be accepted.
The conversion rate from those opportunities is lower, because the quality of the credit is not as good, although a lot of companies will go away, make some changes and come back, Hanlon commented.
Hanlon also said that the SME segment is definitely a big opportunity at the moment, one of Westpac's top three priorities, because at some point the economy will turn and start picking up.
Head of retail and business banking at Westpac, Peter Hanlon said that, unlike recent announcements by CBA and ANZ, Westpac's ambitions in the SME segment are uncapped.
Both CBA and ANZ have committed to lend the same amount as last year, while Westpac has left their intentions unlimited.
After the acquisition of St George, Westpac has an even more prominent position in the SME market.
Westpac’s Hanlon said that loans to SMEs with annual turnover of up to $10 million expanded at around 1.3 times system for the bank, due to unmet demand from the withdrawal of second-tier lenders and foreign banks.
However, the ability of SMEs to find credit may still be a point of contention.
Hanlon said that the hole in the market could be 20 to 30 percent, which used to be filled by smaller players making money out of thinner margins and looser credit criteria.
He said that part of that 30 percent will be open to Westpac, and the bank has had a flood of inquiries.
However not all credit applications in today’s constrained environment will be accepted.
The conversion rate from those opportunities is lower, because the quality of the credit is not as good, although a lot of companies will go away, make some changes and come back, Hanlon commented.
Hanlon also said that the SME segment is definitely a big opportunity at the moment, one of Westpac's top three priorities, because at some point the economy will turn and start picking up.
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