Report: Bank Relationships Differ Across Australian States

Despite Australian businesses overall rating their banks at record lows, businesses in Queensland continue to feel positively about their banking relationships, according to the East & Partners Business Banking Index (BBI).

Fully 982 Australian businesses were asked by the research and analysis firm to rate their banks on a scale of 10 (low) to 100 (high) across four criteria: empathy, satisfaction, loyalty and advocacy.

While the overall national BBI score is a record low 29.6, the index for Queensland continues to improve and reached 58.9 in December. The New South Wales BBI, by contrast, fell from 15.5 to 15.3 and in Victoria moved from 25.7 to 25.3.

Businesses in the ‘other’ states of Western Australia, South Australia, Tasmania, the ACT and Northern Territory are also relatively happy with their banks, delivering a combined BBI score of 48.2.

The strong Queensland BBI score is partly driven by the high BBI scores for the Bank of Queensland, which continues to outperform the other nine banks ranked by the BBI. The BOQ has led the BBI league tables for five consecutive years, with a December score of 64.5.

In contrast, the bottom three positions in the league table are occupied by Big Four rivals Westpac, ANZ and CBA, with CBA’s score a bottom-ranked 17.3.

Lachlan Colquhoun, head of markets analysis at East & Partners, said the BBI scores reflected not just the comparative health of the state economies, but also the better relationships between businesses and the regional banking franchises.

“The BBI has continued to show that the smaller regional banks, such as BOQ, St George, BankWest and Suncorp enjoy better rankings than the Big Four,” said Colquhoun. “NAB, with a healthy BBI of 47.7, is the only Big Four bank with an above average BBI score, and that has fallen around 10 percent since 2010.”

Colquhoun added that smaller businesses tend to be more dissatisfied with their banks than larger ones. “If you are a corporate business turning over between A$20-725m and you are located in Queensland, then our BBI research suggests you are much more likely to be happier with your bank than if you are a micro business in NSW,” he said.

The four market segments in the BBI are micro businesses turning over A$1-5m annually, small and medium-sized enterprises (SMEs) with A$5-20m turnover, corporates turning over A$20-725m, and the biggest institutional segment with turnover of more than A$725m annually.


Related reading