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INVESTMENT BANKING | Staff Reporter, Australia
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9 out of 10 Australian businesses stick to Big Four for banking

75% of these corporations are likely to open tender, but only across the leading four domestic banks.

 

Australia’s largest businesses show little interest in moving their primary transaction banking relationship to a non-big four banking provider, the latest research on the Institutional banking markets by industry consultants East & Partners has shown.

A recent survey of Australia’s Institutional business markets has revealed that the big four Australian banks continue to dominate the big business landscape, with a collective ownership of 84 percent of Australia’s Top 500 businesses transaction banking relationships.

A surprisingly large 91.0 percent are unlikely or very unlikely to consider a change to a non-big four bank for their primary transaction banking, leaving less than a 10 percent share of these relationships “open” for competitive providers.

A total of 63.0 percent of Australia’s Top 500’s transaction banking relationships are currently subject to a period/term contract, with 40 percent of these contracts set to expire within the next two years, with a further 46.0 percent expiring within the next two to four years.

Of these businesses 75 percent have said that when renewing these contracts they will definitely or likely be going to open tender – obviously, however, only across the Big Four domestic banks.

East & Partners’ Principal Analyst Paul Dowling commented, “With payments, cash and deposit business now central to bank relationships with their big customers, transaction banking is definitely the key market share battle ground. There are obvious reasons for why domestic banks dominate in-country transaction services, although these ratios for the Australian market are significantly higher than we find in many other markets around the region”.

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