The banks corporates turn to for Brexit advice

HSBC London HQ

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Business consultancy Greenwich Associates asked about 120 treasury professionals at UK and European companies which banks were offering them the best trade ideas and solutions on the UK’s referendum on European Union membership, once before the June 23 vote and once after.

HSBC topped the ranking both times, followed before and after the vote by BNP Paribas, Citi and Barclays.

Deutsche Bank was voted joint third with Citi when Greenwich Associates polled companies before the referendum, but fell to fifth place when the consultants asked companies again after the Brexit vote. Deutsche bank declined to comment.

Lloyds and Nordea held joint fifth place before the vote. After the vote, Lloyds disappeared from the top five, with fifth place shared by Deutsche Bank, JP Morgan, Nordea and RBS. Those banks declined to comment or had not responded by publication.

In HSBC’s interim report published alongside its results for the first half of 2016, HSBC chairman Douglas Flint wrote that the bank’s priority following the vote had been “proactively reaching out to and working with our customers as they prepare for the new environment”.

A spokesman for HSBC told FN that in the weeks since the referendum the bank had introduced initiatives including weekly webcasts for corporate clients hosted by senior managers and economists; holding smaller customer events to talk about the effect of Brexit on particular types of business; and working with UK Trade & Investment on initiatives to support small businesses.

At BNP Paribas, which Greenwich Associates said in a February report had extended its lead in market share in European corporate banking and cash management, a spokeswoman pointed to the bank’s position as being “fully embedded” in the UK with a broad European network as beneficial to businesses. In 2016, RBS recommended the French bank to international cash management clients when it withdrew from that business.

Citi chief executive Michael Corbat told analysts on a July call following the publication of the bank’s second-quarter results: “While there’s been a high degree of uncertainty in the wake of the referendum, the capital markets are open, strategic transactions are getting done and we feel good about the client activity we’re seeing.”

The team at Greenwich Associates, led by report author Tobias Miarka, found that companies were reviewing their hedging strategies in the wake of the Brexit vote and that FX was the main short-term issue on which they wanted external guidance.

But the firm described the provision of Brexit advice as “a missed opportunity” for banks given that only half of large companies in the UK and fewer than two in five on the continent said they had received enough clear advice from their banks following the referendum.

Its analysts wrote: “Given companies’ pressing concerns with Brexit and the potential for significant turnover in banking business, the time seems ripe for banks to proactively reach out to clients with advice for navigating Brexit.”

But, they noted, their survey’s findings suggest that “the referendum’s result has surprised many banks as much as their corporate clients”.

They added: “It remains to be seen if more banks will be able to step up and provide clear and effective advice as the Brexit effects will further unfold. Their corporate clients clearly have the appetite for this advice and would be willing to take it on board.”

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