The world's top corporate treasurers have gone negative on their bankers. The primary caretakers of company banking relationships say bankers are taking advantage of the crisis at the expense of their businesses. An overwhelming majority (76%) said banks that have accepted public money have not lived up to their commitment to help businesses.
More than half responded 'no' when asked 'Are banks delivering acceptable lending terms to healthy companies?'
The treasurers are equally negative about the US bailout. Sixty percent believed the US government has not succeeded in stabilizing the nation's banking system. They were more sanguine about the timing of a recovery, with 37% calling an end to the banking crisis in the first half of 2010 and another 35% saying it would be over in the second half of that year.
Some 75% said that the US would emerge from recession before Europe.
"In this environment of crisis and opportunity, companies are speaking out about their banks," comments Carolyn Meier, Managing Director, EuroFinance. "They don't believe their banks are giving them a fair deal. The majority think bankers are in a position to do more, and are either sitting on their hands or using the crisis to their advantage and at the expense of healthy companies."
In the survey, treasurers overwhelmingly stated (78%) that bankers were using the tight credit market to their advantage, i.e. wielding their lending power in a difficult market to force treasurers to accept terms favourable to the banks when they bought bank fee-based services, such as cash and liquidity management.
Meier adds, "This response signals that the power equation between customer and banker has shifted in favour of bankers. Previously, treasurers enjoyed a buyers market, wherein they could shop around for best prices when buying fee-based services. Now, treasurers say, banks threaten to raise risk-based pricing on loans, or discontinue lending, unless treasurers accept their terms on fee-based businesses."
Treasurers find themselves in this position, the survey reveals, despite a much lower opinion of banking acumen. Fifty-one percent said that they viewed their bankers as less competent since the onset of the crisis.
The competency of corporate treasurers - at least from the point of view of their corporate colleagues - is on the rise. Some 74% said that their job had gained greater influence since the onset of the crisis; 77% said that they had taken on new duties and responsibilities, and 49% said they are spending more time with the CEO since the crisis began. The crisis has also proven to be a positive catalyst in many companies.
Sixty percent said that the crisis had accelerated the rate of innovation in treasury.