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European Corporate Banking: As Crisis Subsides, New Questions Arise

Relationships between large European companies and their banks generally survived the historic turmoil in the economy and the banking industry and the rankings of Europe’s top five corporate banks remained unchanged throughout the crisis.

That is not to say that corporate banking relationships were unaffected. On the contrary, companies perceptions’ of their banks were profoundly influenced by banks’ credit policies: Banks that were seen by their clients as stepping up and providing support during the crisis have seen their brands and reputations bolstered among corporate clients; banks seen as less supportive have seen their client quality ratings tumble.

However, Greenwich Associates research shows that quality scores for banks that tightened credit policies did not fall in unison. Rather, ratings for some banks fell precipitously while other banks experienced only moderate declines.

“Our research shows that the wildcard is the Relationship Manager,” says Greenwich Associates consultant Tobias Miarka. “Companies that give high quality ratings to the individual Relationship Manager that covers them from a given bank penalized that bank less severely for a perceived failure to support them with credit during the crisis.”