Westpac has extended its lead on the other major banks due to improved ratings in the micro business market, according to the latest DBM Business Financial Services Monitor.
The report is based on an annual survey of 12,250 decision-makers in business banking, conducted continuously through the year, asking respondents to rate their satisfaction with the banks they deal with.
Results for the major banks in each market are released monthly and, according to the May report, Westpac has retained its overall lead in addition to being the sole leader in both the micro and small business segments.
The micro business segment refers to businesses with annual turnover of less than $1 million, while the small business segment covers businesses with annual turnover of $1-5 million.
The report reveals Westpac scored a satisfaction rating of 7.2 out of 10 in the micro segment, while ANZ and CBA scored seven out of 10 and NAB trailed behind on 6.8.
In the small business segment, Westpac scored 7.3 out of 10, beating ANZ’s score of 7.1, while CBA and NAB both scored 6.8.
DBM managing director Dhruba Gupta says Westpac’s overall position reflects its high satisfaction ratings in most business markets, particularly with micro and small business, which represent more than 97% of all businesses.
Get SmartCompany FREE to your inbox every weekday
“Westpac don’t look like they’ll be relinquishing their position in the small and micro business segments – they have a strong position there,” Gupta says.
“The exception for Westpac is the important large business market, which includes businesses with annual turnovers of more than $50 million.”
“In that market, Westpac’s performance is now much poorer after a period of strong ratings up until the end of 2010.”
Gupta says while the medium and large segments represent just 2.6% of Australian businesses, they account for a much greater part of the banks’ total lending and deposits, making them more attractive markets to target.
“NAB is now the leading bank in the large business market, and Westpac is sharing its number one ranking with NAB in the medium business market,” he says.
However, NAB has also seen a rise in the micro business market, which has seen it lift its ranking from equal third to equal second.
Meanwhile, CBA’s overall rating of seven out of 10 was also an increase from the previous month, driven by an improved result in the micro market, while partly offset by falls in other markets.
“CBA could improve a little bit more but whether they will catch up with Westpac remains to be seen. It will be hard for them,” Gupta says.
With regard to interest rates, Gupta says while the Reserve Bank is looking to tighten its monetary policy, it’s uncertain as to whether the banks will follow suit.