Banking market analysts East & Partners have given a snapshot of how the main providers of trade and supply chain finance funding among Australia's banks have been performing, relative to each other.
This has been achieved by speaking with up to 2000 Australian businesses with existing trade and supply chain facilities about their trade finance relationships.
East and Partners' latest commentary suggests ANZ's long running new customer acquisition strength is facing a "stern test" as the bank faces a growing challenge in servicing its large customer base.
"Elevated customer churn of 5 per cent will result in a net loss for the bank if it can't stem the flow," East reports.
"ANZ has been a victim of its own success," added Martin Smith, global head of markets analysis at East & Partners.
He noted that part of this decline was due to other banks being more active on the [business development] side, notably CBA and HSBC.
CBA's annual growth among midmarket businesses has been running at 6 per cent according to Smith. Nevertheless, CBA itself has paid the price of becoming the fastest growing trade provider by customer numbers – at the cost of a below-average wallet share per customer.
Smith said this meant that for every new trade customer onboarded at CBA, half of that customer's trade business competed away by rivals, in particular ANZ and HSBC.
HSBC has its own weaknesses in running a trade, notably its inability to convert what East called "its enviable mind share advantage and steadily growing underlying transaction banking strength."
That is, while HSBC is thought of as "the" trade bank in the market, in many instances it is being confined to secondary relationships with clients.
East & Partners define SME as having turnover of $5 million to $29 million and midmarket firms as turning over $20m to $725m.
And in these crucial areas, the analysts found that NAB's traditional business banking transaction strength is no longer translating into trade finance outperformance.
"While the Bank achieves best in class wallet share outcomes it needs to rebuild critically low mind share at a time when others are seeking to scale up their presence in the mid-market and above," East & Partners reported.
(In this context, "wallet share" means the percentage of total possible fees from any available services to be provided by a bank, and for NAB this has been 85 per cent.)
Meanwhile, East has called the fight for supremacy in the SME segment in favour of Westpac. "The bank has successfully reversed ingrained, long term customer churn among larger sized businesses," the research firm asserted.
The trade finance related local operations of global banks are also taking hits with Citi, the former heavyweight in the market, losing its pull among corporates at the
"Citi is suffering following a significant carve out of its mind share in the commercial and corporate segments, constraining growth as customers gravitate towards more prominent trade brands such as HSBC and ANZ," East & Partners suggested.
Smith added that the resurgence of BNP Paribas is the standout performance among banks backing the corporate players – with turnovers above $725 million – behind trade flows in and out of Australia. BNP has doubled its market share in this segment to 4 per cent, equating to pre-GFC levels.
Bank of Queensland is the "quiet achiever" in the SME segment, accruing consistent year-on-year relationship share growth to become the preferred Non-Big Four alternative for small business' trade and supply chain finance needs.
Its smaller regional rival, Suncorp Bank, is likely to have a negligible effect on the balance of trade and supply chain finance funding among the players in Australia's banking sector.