European Corporate Credit Not to be Taken for Granted, Warns Report
International banks are increasing their market share in Europe at the expense of the smaller, national banks that have served as the traditional suppliers of credit to European companies, according to research by Greenwich Associates. This shift in market share from domestic banks to international competitors has the potential to transform today’s buyer’s market into something more closely resembling the United States, where companies feel the need to reward banks that provide credit with higher margin business, according to the research. ‘The current European business environment favors the pan-European and international banks,’ said Greenwich Associates consultant Berndt Perl, ‘and those banks will be much more effective at fostering a U.S.-style credit model.’ The report found that European corporations currently enjoy easy access to credit relative to their counterparts in the United States. However, as many of Europe’s domestic banks adjust their traditional strategies to the modern European marketplace and international banks extend their market penetration, Greenwich recommends European corporate executives begin to consider how a reduction or concentration in credit supply would affect their financing strategies.