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Asia-Pacific: big 3 transaction banks lose customer share, internationals & locals gain

Intensified competition in Asa’s transactional banking markets has driven a significant decline in wallet share for Primary Banks and a corresponding climb in wallet share for Secondary Banks, the most recent survey by most recent East & Partners*.

The survey showed that the ‘big three’ wallet share for Primary Transaction Banking providers has fallen from a market average of 80% in 2004 to just over 50% in 2014. While the wallet share for Secondary Transaction Banking provider climbed from 11% to 32%.

2010 to 2104 multi-banking takes over

In the period 2010-2014, the primary wallet share for the regional “Big three” - Citi, HSBC and Standard Chartered has fallen from around fallen from a 75% share of corporates wallet in 2010, to just above 60% today, as secondary  wallet share has increased from 18% to 23%.

Underling the trend for corporates to ‘multi-bank’, is the fact that the percentage having no secondary banking relationships has fallen from around 8% in 2010, to 3% today.

Lachlan Colquhoun, Head of Market Analysis at East & Partners, said that the data suggested that the competition between the banks for Asian corporates has tipped the balance of power back in favour of the customer.

International banks

International banks (classified as a bank that is headquartered outside of the Asia region but operates within the Asia markets, i.e. Deutsche, JP Morgan, ANZ, or BNP Paribas operating in Singapore), are finding their primary bank customers are committing 10% more of their money with them in 2014, than they were a year ago, see figure:

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*East & Partners' fieldwork took place in May 2014 with a “near census” of the region’s top 1,000 institutions having been interviewed (either on the phone or in person). In the case of this survey, 933 corporates were polled, respectively. The group of 1,000 is based on the top 100 institutions as measured by annual revenues in each of the following country markets: China, Hong Kong, India, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand. This survey is repeated every six months.

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CTMfile take: How can corporates use the increased competition and multi-banking to optimise their transaction banking arrangements in Asia-Pacific? The local banks and the other international banks are desperate for your business.

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