Introduction to Greenwich Leader Awards 2010

Among the proliferating numbers of business awards made every year to companies around the world, the annual European and Asian Leader Awards from Greenwich Associates are especially highly regarded by recipients and voters alike. TMI is delighted to introduce a special supplement devoted to these Awards, which recognize the excellence of banks in two categories, Share Leaders, based on market penetration of various sectors, and Quality Leaders, based on customer satisfaction with the coverage and quality of service provided. The Awards are the outcome of a series of in-depth interviews conducted with several hundred financial officers, including CEOs, finance directors and treasurers at large corporates and financial institutions in Europe and Asia, and as such they provide a valuable overview of banking relationships in these regions.

In Europe, the largest companies note fewer problems in securing funding for their operations, as well as a growing demand for capital to finance growth-oriented capital projects. These are indeed welcome signs of a return to normality – but as the Greenwich Associates consultants point out, “the new normality might be much different from the old”. One of the imponderables in visualizing this ‘new normality’ is the impending reform of financial regulation which is bound to have an enormous impact on almost all aspects of corporate funding and treasury management requirements.

Overall, the results of the Greenwich Associates 2010 European Large Corporate Banking Study suggest that these companies have “passed the tipping point” and are moving into a period of improved outlook for business and more favorable credit markets. What is particularly pleasing is the finding that banking relationships did remain quite resilient during the crisis: banks had a strong incentive to maintain services for clients that provided them with fee-based revenue, while companies had an equally strong incentive to preserve relationships with banks that were providing credit. The study showed that less than a third of bank relationships are currently expected to be subject to any meaningful changes.

The results in Asia present a different, but equally illuminating  picture, and the consultants report a “positive change” in the business environment which is more dramatic than what has been experienced to date in either Europe or the US. The markets are relatively stronger in Asia and the speed at which Asian corporates are recovering from the recession encourages them to look for funding for both credit and growth, much closer to home than previously. They are relying far less on foreign banks, many of which retrenched their operations in Asia during the crisis, and turning instead to local sources of funding. Nearly one-third of Asian companies said that their access to finance improved in 2009, with a steady recovery in Asian credit markets that began earlier than it did in European ones. Altogether the crisis provided a strong stimulus to local banks, for credit and other essential services and for cash management, an area in which Asian banks have greatly improved their offerings.

Two Award winners also discuss some of the factors  which contributed to their success. Marilyn Spearing of  Deutsche Bank, which was placed top in the Greenwich Quality Awards for Cash Management in Asia, and in Europe also received the highest accolade for quality in both Cash Management and Debt Capital Markets, notes that with a strong clearing business and technology base, the bank is in a position to “flex solutions according to individual customer needs”. Nor is Deutsche Bank distracted by trying to serve the needs of every client, but focuses its attention on organizations where it knows it can deliver the greatest value, i.e., large, complex corporates whether domestic or multinational.

Boosted by the successful acquisition of Fortis Bank, BNP Paribas has been steadily developing its market position and reputation over recent years. In these Greenwich Leader Awards, the bank received the top ranking in both Market Penetration and Quality for Large Corporate Banking in Europe, and Filipe Simao describes its unique proximity to its customers and its growing focus on advisory services. Altogether these pages contain some penetrating insights which will interest and inform treasurers in companies of all sizes and in many regions of the world.