Business customer backlash over re-pricing

Business sentiment towards the banks has turned negative as commercial banking customers feel the impact of the widespread risk-based re-pricing of loans that is going on right across the commercial market. The latest East & Partners Australian Business Banking Customer Satisfaction Monitor shows an acceleration of the decline in sentiment that started in the middle of last year.

The 900 small business, middle market and corporate respondents to the survey cut their overall satisfaction rating from 5.36 (out of 10) in December to 5.21 in January and 5.18 last month - a fall of 3.4 per cent in two months.

Among the factors that contributed to the decline, "pricing" was the biggest negative followed by "application forms and processes".

The survey supports anecdotal evidence that business owners feel they are bearing the brunt of higher loan pricing while consumers get all the rate cuts, and are having to jump through more hoops to get finance.

Businesses gave the banks higher ratings on some factors - convenience, range of products and services, and access to a dedicated banker. But the big fall in their ratings of pricing and applications brought the overall satisfaction score down.

The banks can look forward to further falls in their satisfaction scores. Business bankers say the re-pricing of commercial loans has some way to go and that a longer and more complicated approval process is an inevitable consequence of economic downturns.

Among the bank satisfaction scores those for ANZ, Westpac, the regional and the foreign-owned banks reflected the overall trend, with ANZ copping the biggest fall in its approval rating in February.

Commonwealth Bank, National Australia Bank, and St George bucked the trend. Commonwealth had the biggest increase in its approval rating last month.

Commonwealth is coming off a low base. Among the big banks NAB has the highest approval rating, followed by St George, Westpac, ANZ and Commonwealth.