Is this global banking giant about to disrupt ANZ, CBA, NAB, & Westpac?

A global banking giant plans to steal market share away from Australia and New Zealand Banking Group (ASX:ANZ), Commonwealth Bank of Australia (ASX:CBA), National Australia Bank Ltd (ASX:NAB), and Westpac Banking Corp (ASX:WBC)…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The recent successful initial public offering of small business lender Prospa Group (ASX: PGL) looks set to strengthen its position at the small end of the commercial lending market.

This could lead to the growing fintech company taking market share away from the likes of Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), and Westpac Banking Corp (ASX: WBC)

Unfortunately for the big four banks, Prospa isn't the only company looking to steal market share away from them. One of the world's largest global banks has revealed that it has its eyes on the Australian commercial banking sector as well.

Who is coming after the big four?

According to an AFR report, Citi is ramping up its operations targeting high-growth companies with international aspirations.

The global banking giant plans to take on the big four by offering business customers who operate in multiple jurisdictions the convenience of a single banking partner. It also intends to compete sharply on price.

Citi's head of commercial banking in Australia, Alex Syhanath, told the media outlet that it will be targeting companies turning over $250 million to $1 billion a year. He also revealed that the bank will be targeting companies outside the mining, resources, and property sectors.

Mr Syhanath appears to believe that the big four have focused too much on property and have let their core banking skills slip, opening up an opportunity for fintech companies and global banks.

He said: "You see fintechs like Greensill for instance. They are targeting this mid-market quite heavily and the reason they are doing so well is because the incumbents aren't doing so well or paying attention to what the opportunity is."

The global banking giant advised that it has signed up eight customers since February and has a strong pipeline of prospective customers. New customers include the likes of Luxury Escapes and fashion retailer Showpo.

What now?

Whilst the loss of any kind of market share is never a good thing, I think it's a little too soon to panic about Citi's move. 

In light of this, I'm not overly concerned by this news and continue to see the banks as buys at their current levels.

Motley Fool contributor James Mickleboro owns Westpac shares. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Bank Shares

A corporate female wearing glasses looks intently at a virtual reality screen with shapes and lights representing Block shares going up today
Bank Shares

Are Westpac shares a buy following the bank's big tech update?

Is now a good time to buy the banking giant's shares? Let's find out.

Read more »

Different Australian dollar notes in the palm of two hands, symbolising dividends.
Bank Shares

Own CBA shares? It's payday for you!

A dividend is heading to CBA shareholders’ bank accounts.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Bank Shares

Are CBA shares really worth $120?

It has been a good year for ASX bank shareholders.

Read more »

a group of people sit around a computer in an office environment.
Bank Shares

Westpac shares push higher on $9.8b technology simplification plan

Westpac plans to spend big on technology to close the gap on its rivals.

Read more »

A worried woman looks at her phone and laptop, seeking ways to tighten her belt against inflation.
Economy

NAB boss issues dire prediction for Aussie economy

NAB’s CEO has issued a stark warning on the outlook for Australia’s economic growth.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Bank Shares

Own CBA shares? Here's the tech stock the banking giant just invested in

CBA has made an interesting investment. Here's what you need to know.

Read more »

A woman gives two fist pumps with a big smile as she learns of her windfall, sitting at her desk.
Bank Shares

ANZ shares charge higher on $57.5 million class action settlement news

ANZ shares have continued their positive run on Monday.

Read more »

Two people comparing and analysing material.
Bank Shares

Better buy: CBA or Westpac stock?

Which ASX bank share is a better buy?

Read more »