A lender that we deal with was recounting to us today that they have had 3 instances recently where a client has come to them after their existing bank has insisted that they leave. Our financier then assesses and approves a facility for them, generally a little more expensive that the client is paying the existing bank as their cost of funds is higher. The client has gone back to their bank to make arrangements to transfer their facilities and the existing bank has decided to make a counter offer, that is not only cheaper than our lender's offer, but also cheaper than the existing rates being paid!
In short, the bankers are realising that it is much harder to get new deals through credit so they are doing all they can to retain clients. What is perculiar is that these are clients that have been asked to leave!
In my article - Drive Bank Competition; Shop your Bank - I suggested that businesses would be well placed to threaten to leave their bank as banks will drop rates to keep you. Today's discussion just reinforces this.
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