Banks need to do more to gain shareholders’ custom
Australia's Big Four banks are struggling to convert their 1.5 million shareholders into clients, with just over 40 per cent of investors in each institution also being a customer, on average, according to new research.
Results from the latest Roy Morgan Single Source survey found on average just 41.1 per cent of each bank's shareholders were also clients, prompting Roy Morgan industry communications director, Norman Morris, to suggest they need to do more to incentivise investors to bank with them.
Morris said the data showed there has been a "disconnect between investment and banking decisions, with shareholders obviously chasing the best deal for their personal banking and the best investment regardless of where they bank".
The survey found the Commonwealth Bank of Australia had the highest proportion of investors as clients (49.1 per cent), while less than two in every five investors also banking with Westpac (39.6 per cent), ANZ (37.1 per cent) and NAB (34.4).
"It is likely that the banks will need to offer some incentive or special deal to induce shareholders to bank with them, but it appears from this analysis that past attempts have had limited success," Morris said.
"The potential to increase business from shareholders is considerable. Over 450,000 CBA shareholders are not customers of the CBA; while the NAB has a potential of over 400,000. For the ANZ and Westpac the figure is over 300,000. Given that these shareholders are likely to have a favourable opinion of their bank from an investment perspective, the next step is to convert them into customers. Finding the right inducement and making shareholders aware of it is now the challenge."
AUTHOR
Nicholas O'Donoghue
Recommended for you
First Sentier Investors chief executive, Mark Steinberg, is set to depart the asset manager after seven years.
Metrics Credit Partners has completed the acquisition of Taurus Finance Group and BC Investment Group as it looks to launch consumer lending arm Navalo.
AMP has announced to the ASX that it is being sued by property fund manager Dexus regarding the sale of its real estate and domestic infrastructure equity business.
Having seen inflows of US$5.6 billion to its fixed income funds in the last quarter, Janus Henderson has closed on a deal with life insurer Guardian to secure funds to boost its product development.
