A recent survey of international corporates polled in the first week of September by EuroFinance, an Economist Group business, revealed that access to credit remains a concern. Thirty-six percent of the 224 corporates surveyed said that they were worried that their bank would not give them adequate credit facilities, indicating this was their biggest ‘treasury nightmare’ followed by counterparty risk fears about their banks. Almost one-third (31%) also said that they expect lending to be further impacted by post-crisis regulation.
These concerns on restricted credit facilities and bank risk may be driving companies to third-party providers for solutions in areas such as supply chain, lending, payments, foreign exchange (FX) and investment products. The survey showed that companies have or are in the process of seeking alternatives in providers of a number of traditional bank products.
A simultaneous survey revealed that banks are also worried about their corporate clients looking to non-bank providers for solutions that have traditionally been provided by banks. Ninety-two respondents, this time from the banking community, shared their views on where they felt their sector was most threatened. Supply chain (23%) and payments (30%) topped the list here, with bank lending, FX and investment products mentioned to a lesser extent.
These were some of the main findings of the latest survey by EuroFinance, entitled ‘Nightmares About Bank/Corporates’. While the corporates voiced their fears that loans and credit would be the most heavily impacted bank product in the future, with 37% of respondents indicating this was the case, banks were also in agreement, with a similar proportion of respondents – 33% – also coming to this conclusion. Similar agreement was shared over the fact that over-the-counter (OTC) derivatives will also be heavily impacted by upcoming regulations.
“The issues here are quite complex. We have companies seeking alternatives to banks, while at the same time banks are becoming more and more aggressive with companies, demanding that adequate fee based business is given to them in return for credit,” said Andrew Sawers, editorial director, EuroFinance.
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