Negative Interest Rates and Industry Upheaval Make Cash/Liquidity Management Top Concerns for European Companies

BNP Paribas strengthened its already market-leading position in European corporate banking last year by adding  new clients in cash management.

According to the results of the Greenwich Associates 2016 European Large Corporate Banking and Cash Management Studies, 60% of large European companies (with at least EUR 2bn turnover) use BNP Paribas for corporate banking and 38% for cash management. These results place BNP Paribas comfortably ahead of competitors in both businesses. 

In corporate banking, HSBC ranks second behind BNP Paribas with a market penetration score of 51%, followed by Deutsche Bank at 46%, and Citi, UniCredit and RBS. These banks are the 2016 Greenwich Share Leaders in European Top-Tier Large Corporate Banking. 

In large corporate cash management, HSBC and Deutsche Bank tie for second place behind BNP Paribas, with market penetration scores of 30%–31%, followed by Citi at 27% and UniCredit at 23%. These banks are the 2016 Greenwich Share Leaders in European Top-Tier Large Corporate Cash Management. 

Cash/Liquidity Management Become Top Priorities

Cash and liquidity management rank as by far the top concerns of corporate treasury departments. Two factors have elevated cash and liquidity management to top priority:

1.    With the European Central Bank and central banks of a number of non-Euro countries pushing interest rates to negative levels, the question of how to allocate cash reserves is a critical issue for European companies. 

2.    The exit of RBS from transaction services outside of the U.K.  and pull-backs by other leading banks are causing disruption in the usually staid corporate cash management business.  An impressive 20% of corporate treasury departments name “switching cash management providers” as the top challenge they face in 2016. 

“Banks that help large companies successfully navigate unprecedented challenges like negative interest rates and the need to unexpectedly switch cash management providers are differentiating themselves and winning new clients,” says Greenwich Associates consultant Dr. Tobias Miarka.