Cba Lags Field In Happy Customer Poll
Sydney Morning Herald
Friday September 29, 2006
NEW figures from Roy Morgan show the customer satisfaction gap widening between a lagging Commonwealth Bank and its peers, and analysts warn the situation will continue to hurt the bank's market share.
In Roy Morgan's August poll, 62.4 per cent of CBA customers said they were satisfied, only 0.1 percentage points better than a year earlier. This compared with ANZ's 2.1 percentage point improvement to 75.2 per cent and National Australia Bank's 68.3 per cent, up 3.7 percentage points. Wilson HTM analyst Brett Le Mesurier said investors watched the figures as they acted as a leading indicator of the bank's potential to build market share. "I don't want to state the obvious, but if people like dealing with the bank, they will buy more of [the bank's] products," Mr Le Mesurier said. "One could look at these figures and say ANZ and National Australia Bank are going to grow market share at the expense of CBA and Westpac." Westpac was the only Big Four bank to fall in the estimation of its customers, by 1.5 percentage points. However, 67.4 per cent of Westpac's customers were satisfied, placing it third among the Big Four, well above CBA. CBA's numbers reflect more than a year under the leadership of chief executive Ralph Norris. Mr Norris took over the bank on a platform of customer service domination last June, setting a goal for CBA to be the most customer-friendly bank in three years' time. Mr Le Mesurier called such a goal "a big ask", but at an analyst briefing on the bank's retail strategy CBA's head of retail banking, Michael Cameron, pleaded for patience. "As you know, these figures move round a bit from month to month," Mr Cameron said. In the past year the bank had hired 550 new staff, opened more branches, changed operating hours and redesigned products. Mr Cameron said the changes would continue but he expected it would "take some time" before the changes began to affect external customer satisfaction surveys. He said internal surveys showed complaints had fallen by 52 per cent since July 2005. CBA's head of lending products, Geoff Austin, said the largest branch network in Australia positioned the bank well to deal with a rising interest rate environment. As the Reserve Bank noted an "increase in mortgage arrears, largely reflecting the general lowering of credit standards that has occurred over the past decade", Mr Austin said arrears at CBA were steady, both in mortgages and personal loans, and an index of the probability of defaults was falling.Most defaults come from non-bank lenders who take on riskier borrowers at higher interest rates. Mr Austin also warned that the practice of coaxing balance transfers onto credit cards with zero-interest honeymoon periods could undermine the value of loans as consumers transferred debt out of mortgages.He said the Commonwealth Bank refused to enter into this product line and might lose some market share as a result. In research released after the briefing, Deutsche Bank analyst Ross Brown applauded the bank for stabilising arrears, but said falling market share in deposits was "a long way from being resolved".
© 2006 Sydney Morning Herald
