Small to medium enterprises are sticking with the safety of the big four banks, which have increased their market share in the increasingly competitive market for small business deposits, new figures show.
The announcement is below:
The big four banks have grown their market share in the increasingly competitive market for small business deposits over the past six months, as businesses stick to safety.
Australia's Big Four banks are the clear winners in the highly competitive SME deposit market, raking in more customers and more cash than their smaller counterparts.
The latest East & Partners' Australian SME Banking Markets Report for the six months to October 2009 shows that the Big Four are succeeding in the increasingly competitive market for small business deposits.
Primary market share for the Big Four banks in small business term cash deposits has increased by over 16 percent in just the past year, to 72 percent of the market.
The secondary market for deposits is also shrinking, with only 40 percent of businesses placing their term deposits with more than one bank, down from 60 percent just one year ago.
"In the current climate, SMEs are turning to deposits as a safe investment vehicle, while banks are seeking to gain deposits to firm up their balance sheet", East & Partners' financial markets analyst, Peter Drennan, said.
"Clearly, small businesses are sticking with the safety of the Big Four, while also consolidating products based on lending relationships", Mr Drennan added.
"The Big Four are obviously taking advantage of their strong market position and benefiting from growing this critical source of funding", Mr Drennan concluded.
