Thursday, March 3, 2017 Stamford, CT USA — The theme for the European corporate banking industry this year is “money in motion.”
The results of the annual Greenwich Associates European Large Corporate Banking Study show that over the past 12 months, relatively large numbers of large companies have changed banks, and a surprising 40% of large companies express a strong willingness to switch banks in the year ahead. This activity is having a significant impact on the businesses of banks that have secured spots on the list of the Greenwich Associates 2017 Share and Quality Leaders in European Large Corporate Banking.
These unusually big shifts are the result of several powerful trends. First, the market is still sorting out the effects of RBS’ retrenchment—a strategic move that left many companies in search of new banking relationships. Second—and more relevant to the direction of the industry in 2017— the rest of Europe’s largest banks continue to operate under severe capital constraints. These constraints are forcing pan-European players to rationalize their allocation of capital and other resources. “As part of this process, they are taking a close look at each and every client relationship and making a determination as to whether future profit potential warrants a continuation of that relationship in its current form,” says Greenwich Associates Managing Director and Head of Europe, Dr. Tobias Miarka.
In this tumultuous environment, BNP Paribas has taken a firm hold of the top spot in European large corporate banking. BNP Paribas’ 61% market penetration score tops the 52% achieved by number-two HSBC and number-three Deutsche Bank at 42%. Citi and UniCredit are tied for the No. 4 position with market penetration scores of 37%. These firms are the 2017 Greenwich Share Leaders in European Top-Tier Large Corporate Banking. The 2017 Greenwich Quality Leaders in European Top-Tier Large Corporate Banking are BNP Paribas, Citi, ING Bank, and UniCredit.
Treasurers’ Top Concern: Cash Management
Corporate treasurers report that cash management is far and away their top priority for the year ahead. The most immediate and pressing question facing corporate treasury departments is where to park cash in an era of negative interest rates.
In this challenging environment, BNP Paribas has established a clear lead in large corporate cash management, with a market penetration of 40% across Europe. HSBC is second at 36%, followed by Deutsche Bank and Citi, which are tied at 29%, and UniCredit at 24%. These banks are the 2017 Greenwich Share Leaders in European Top-Tier Large Corporate Cash Management. The 2017 Greenwich Quality Leaders European Top-Tier Large Corporate Cash Management are Citi, ING Bank and UniCredit.
What are the Opportunities for Corporate Treasurers?
Weighing on the minds of corporate treasurers are prospects for an increase in volatility in Europe’s financial markets and economies. At the top of the list of macro-economic variables is Brexit, the upcoming elections in France and the impact of the new Trump administration in global trade and other areas.
Risks posed by these factors and the ongoing challenge of managing cash in a negative rate environment are creating a significant opportunity for banks looking to win or deepen relationships with companies across the region. “Corporate treasurers should be looking to their banks for advice, counsel and solutions to these pressing problems,” says Greenwich Associates Vice President, Melanie Casalis. “Banks with strong advisory capabilities now have a good opportunity to deepen relationships.”