To thrive, big banks must provide growth for shareholders and customer service for existing clients, whether they be a big corporate or small retail customers.
Results from DBM Consultants' Business Financial Services Monitor (BFSM) show that business customers from the Commonwealth Bank (ASX: CBA)("CBA") and Westpac (ASX: WBC) are among the most satisfied with their current financial institution.
Size might be everything
Although the monthly survey rated Australia and New Zealand Banking Group (ASX: ANZ) ("ANZ") last and National Australia Bank (ASX: NAB) not far ahead, it does not take into consideration the shareholder perspective — whether or not the company is a good investment. Although customer satisfaction is paramount to retention, growth is what many shareholders value and ANZ is giving us more.
ANZ has realised it needs to provide both aspects in its business model, after recently devoting $1 billion to start-up business customers that, in time, will help improve customer satisfaction. In addition, since 2007 ANZ has implemented strategies that will see it move into developing markets to take advantage of growth opportunities, particularly in Asia. Every year the percentage of profit stemming from its 'Super Regional' strategy has increased in size, showing investors that it wants to expand on its current client base, obviously, it expects big results from its aggressive strategy.
What's good for you is good for me
Conversely, although many other institutions may see domestic call centres as expensive, the Commonwealth Bank has understood that many Australians take pride in knowing that their bank is providing local jobs and valuing customer service. Ian Narev, Chief Executive of the Commonwealth Bank, has long-term strategies that revolve around getting customers to purchase more products which will draw them away from its competitors, even if it means lowering short-term expectations when compared to the other banks.
Foolish takeaway
Although the ANZ and CBA are essentially providing the same service, the leaders of the two banks are seeking profits in different directions. Investors have rewarded both strategies through their shares prices with CBA and ANZ up 40.4% and 26.6% respectively this past year.
Both companies are among the safest banks in the world but if an investor is looking for growth – as many do – it would be wise to bank on ANZ to deliver results for your portfolio. It is currently the cheapest of the big four in terms price to earnings, its growth prospects are substantiated and in line to realise the biggest gains as it prepares for the 'Asian Century'.
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The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Owen Raszkiewicz owns shares in ANZ .
