CBA, NAB business bankers want to take more risk as competition mounts

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Business bankers believe lenders should diversify how they collateralise business loans, including methods such as equipment or invoice financing.

Already a subscriber?The country’s most senior business bankers say there are plenty of opportunities to offer their customers new products as the major lenders face significant competition from the like of Macquarie and Judo Bank.

“If you look at European markets, the US markets, I think they are far more advanced than we are at having a look at other types of collateral that a business has on their balance sheet,” said Michael Vacy-Lyle, group executive for business banking at Commonwealth Bank. “I have been saying this for quite some time … I think we have got a wonderful opportunity to do that,” he said, referring to banks’ chance to broaden risk profiles.

The view on whether Australia’s four largest banks should heighten their risk exposure comes as lenders ramped up their efforts to win over Australian businesses with new digital products to solidify market share and mitigate the effects of a margin crunch.

While its share of the business banking pie was just 1.7 per cent market share, the big four were cognisant that Macquarie’s purely digital offering was winning over businesses.“Those digital journeys really matter and that is where the differentiation will come in. I think Macquarie have proven they are formidable in digital executions,” Mr Vacy-Lyle said on Tuesday.

 

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