Euromoney’s cash management survey: The best international cash management provider 2009
Euromoney’s 2009 cash management survey had more than 13,300 valid respondents, an increase of over 100% from 2008.
The estimated aggregate gross sales of companies in the survey is $14.4 trillion.
Citi hangs onto its position as the leading global provider of cash management services, ahead of HSBC and Deutsche Bank.
Regional and multi-regional models of transaction banking are a reality check for global banks. This is partly due to increased awareness of counterparty and concentration risk, as well as reduced bank lending.
| Cash management 2009: Top 5 banks overall in the global rankings |
|||
| 2009 | Bank | Score | |
| 1 | Citi | 7865 | |
| 2 | HSBC | 7024 | |
| 3 | Deutsche Bank | 3206 | |
| 4 | UniCredit | 1564 | |
| 5 | RBS | 1478 | |
Citi retains its position as the leading global provider of cash management services, winning for the third consecutive year. Citi’s dominance in the Euromoney poll proves that its model remains robust. Citi has strength in every regional market in the world, but the bank has lost its pole position in a number of areas such as Asia ex-Japan, Japan, the Middle East and Australia. In each case, HSBC has moved up to take the lead.
Citi's leadership of Euromoney’s 2009 cash management poll was far from a given this year. “The circumstances that affected Citi over the past 24 months were clearly far from ideal,” says Francesco Vanni d’Archirafi, head of Global Transaction Services at Citicorp. “But the positive outcome is that we’ve now addressed the challenges that we faced. Our future-focused and legacy businesses are now separated, our capital ratios are among the highest in the industry, our market cap is back over $100 billion, and, as a result of our problems, our breakeven point is down $16 billion a year.”
Why regional could be the future
Counterparty risk and reducing concentration risk appear to be drivers for many corporates seeking new banking relationships with regional and multi-regional banks. The state of flux in the banking industry in the past two years has created an opportunity for regional and multi-regional operators. This group of banks, which includes Santander, SEB and BNP Paribas, has always been a formidable domestic or regional challenger to global powerhouses such as Citi and HSBC.
“The most important aspect of any relationship between a bank and a corporate is trust,” says Pierre Fersztand, global head of cash management at BNP Paribas, which positions itself as a European leader in cash management with global operations. “In some instances, that trust has been broken as a result of the financial crisis. Consequently, corporate treasurers have decided they want to diversify their risks among banks more widely.”
And diversification of risk offers this tier of banks the prospect of aggressive growth.
Consolidation
We expect that consolidation of market share will continue but that there will be a greater number of multi-regional banks at the top gaining the benefits of that consolidation at the expense of local banks, which cannot afford to develop their own solutions to meet regulatory and other challenges.
“Many clients are re-evaluating whether a global approach really makes sense,” says Antoine Arts, managing director of global cash management sales at Santander. “There is still a drive for consolidation and rationalization of relationships but corporates and financial institutions have become more cautious about choosing their strategic partners.”
Funding versus lines of credit
If concerns about counterparty risks are a driver of cash management business to regional and multi-regional banks, funding is not. Of the truly global cash management banks, only HSBC lends mostly against its own balance sheet, which explains why it is seen by many as gaining on Citi over the past year. In contrast, most of the regional and multi-regional banks are willing to support their customers with credit. Indeed it is their lending that defines their client relationships in many cases.
Follow the links at the top of this article to view research results and expert commentary on cash management in 2009.
About Euromoney’s cash management poll:
Euromoney’s ninth annual poll of corporate users of cash management services drew detailed responses from over 13,300 cash managers, treasurers and financial officers worldwide. Combined, they have estimated gross sales of $14.4 trillion. Respondents were asked: which three banks they currently use most for their cash management services; and to rate services provided by their lead cash manager across various categories. Headline results are published online to subscribers at www.euromoney.com, as well as in the October 2009 issue of Euromoney magazine.
Link to methodology:
http://www.euromoney.com/Article/2310516/Cash-management-poll-2009-Methodology.html
More information on the cash management survey:
http://www.euromoney.com/Poll/10681/PollsAndAwards/Cash-Management.html
Note about cash management:
The true value of the corporate treasury department is now being recognized, as can be seen by the increased response rate. Companies and banks who are focusing on managing cash and liquidity efficiently have an advantage in the current environment, as strategic cash management allows cash and capital resources to be used more efficiently.
Contacts:
Please direct all comments and questions to Tim Moxon, Euromoney’s head of research, at tmoxon@euromoney.com or on +44 207 779 8694.
Members of the media wanting access to the cash management results should contact Maria Godden-Dowle, marketing executive for Euromoney, at mgoddendowle@euromoneyplc.com or +44 207 779 8716.
Non-subscribers wishing to access the results through Euromoney’s website should subscribe online or call our hotline on +44 207 779 8999.