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Greenwich leaders in both European and Asian large corporate banking and cash management announced

The combination of macroeconomic volatility, slow economic growth, historically low interest rates, and further increasing know your customer (KYC) requirements has made for a tough market for corporate banks in Europe. However, in recent months these factors have also created valuable opportunities for banks capable of helping large companies navigate today’s difficult conditions by adjusting to market dislocations, avoiding the impact of negative rates and managing KYC provisions.  

The 2020 Greenwich Share and Quality Leaders in European Large Corporate Banking are capitalising on these opportunities to forge deeper relationships with the biggest companies in the region and to create a source of revenue growth in an otherwise flat market by capturing business from rivals.

At the top of the list of this year’s winners is BNP Paribas, which leads the market in penetration among large European corporates by a wide margin, followed by HSBC and UniCredit. Citi and Deutsche Bank round out the list of winners. UniCredit takes the title of 2020 Greenwich Quality Leader in European Corporate Banking. 

Amid slowing trade, companies need support for cross-border businesses

The same macroeconomic volatility that is cutting into global trade is triggering demand for cross-border banking services. For example, the share of large European companies using a provider for cross-border banking services within Western Europe increased to 80% in 2019 from 77% in 2018, while the share using banking services into Asia ticked up to 52% from 50%.

The biggest beneficiaries of this demand have been the biggest global banks, such as Citi, HSBC, BNP Paribas, J.P. Morgan, Bank of America, and Deutsche Bank, which often are the only providers with on-the-ground expertise and networks across all the countries in which a large company operates. 

Minimising the impact of negative rates

When the European Central Bank first introduced negative interest rates, large European companies were largely insulated from the impact because many banks decided to absorb the costs associated with holding cash deposits in the name of preserving client relationships. Generally, banks and companies alike expected negative rates would be a passing phase. Six year later, negative interest rates are the new normal.

As more companies are forced to incur costs associated with cash deposits, the ability to help clients avoid this new expense is emerging as a key skill for corporate banks. Companies are turning to banks with the expertise and technical skills in cash management to minimise or even eliminate any costs from negative rates.

“This new environment is highlighting the capabilities of banks that have developed sophisticated, digital cash-management platforms capable of achieving the transparency and timeliness needed to zero out cash positions on an ongoing basis,” said Greenwich Associates managing director, Dr. Tobias Miarka.

Commoditisation leading to a shift in the Asian corporate banking competitive landscape

Macroeconomic volatility in Asia could actually be working to the advantage of the world’s biggest corporate banks. In times of market dislocation and stress, corporate executives are eager to rely on the expertise, capabilities and deep balance sheets of banks with networks that span not only the region, but the world.

Although competition in Asian corporate banking appears to be heating up, global banks still have some important advantages over regional and local players. Large Asian companies have always relied on global banks for expertise and reach into western markets, but as the US-China trade war and other developments cause disruptions, more companies are looking for advice and assistance within and across the Asian region itself. 

In that capacity, the ‘global locals’ of Citi, HSBC and Standard Chartered Bank often are best positioned to deliver. But the other global banks are also benefiting from their ability to provide advice and support across a variety of Asian countries - including funding support. 

“In the face macro changes and shifting supply chains, it makes sense for large Asian companies to turn to banks that span multiple Asian countries and with deep expertise in transaction banking and other key areas,” said Greenwich Associates head of Asia Pacific & Middle East, Gaurav Arora.

Despite any shifts in the competitive landscape, the list of 2020 Greenwich Share Leaders in Asian Corporate Banking is still topped by the global locals that have traditionally dominated this market. 

HSBC, which scores first in terms of market penetration, appears to be pivoting to an even greater strategic focus on Asia that is already paying off. Greenwich Associates expects that momentum to spread as the bank looks to diversify its franchise in the region by reducing its business concentration in Hong Kong and generating more revenues elsewhere in Asia. 

Citi, which is tied for second with Standard Chartered, remains perhaps the region’s top bank when it comes to digital innovation, design and product capabilities in the critical world of cash management - a fact that helped it cement its leading position in that business in 2020. ANZ Bank continued its progress as a key ‘Asia network’ bank for Western multinationals and Asian corporates, retaining the crown of Greenwich Quality Leader. And while BNP Paribas is well-recognised for the strength of its trade and structured finance franchise, the bank has also stepped into the Top-5 space as a credible large corporate banking and cash management provider in Asia.

The report suggests that one bank to watch in the year to come is DBS Bank, which ranks fourth in market penetration but has generated significant momentum of its own, largely due to its big investments in technology. DBS Bank is building a strong suite of digital capabilities and is being recognised more and more often by Asian corporates for innovation and creativity.


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