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Commonwealth Bank says distributing more specialist staff in booming regional economies will give it leverage over rival National Australia Bank.
Speaking to NCA NewsWire, CBA business bank executive Mike Vacy-Lyle said the coronavirus pandemic had fuelled an exodus from cities to the regions, causing a “resurgence” in business opportunities in areas traditionally overlooked.
Mr Vacy-Lyle, who took the top job in CBA’s business arm last year, said regions such as Byron Bay and northern Queensland would benefit from the near $60bn usually spent overseas by Australians on holiday.
He noted this would translate to new regional investment in entertainment, manufacturing, education and healthcare.
“We are trying to capitalise on that opportunity,” he said.
“That money has stayed in Australia and it has stimulated a lot of regional activity.”
Mr Vacy-Lyle said businesses had swiftly adapted to changing conditions sparked by deteriorating trade relations with the nation’s biggest export partner China, prompting a swath of firms to diversify.
“It has remarkable how quickly businesses pivoted,” he said.
“The penny has dropped about overdependence on a single market.”
At its half-yearly results on Wednesday, CBA revealed lending by its business bank had grown three times the rate of the market in year-on-year terms, with close to $4bn of new loans added over the six months ending December 31.
A proportion of those loans have come from firms taking out COVID-19 SME guarantee loans, with CBA claiming the majority market share.
Mr Vacy-Lyle said the bank would turn its attention in retaining new customers acquired from its competitors, whether a small business or a top-tier corporation.
As part its revamp, CBA intends to place more business banking managers within branches and focus on cash flow cycles when determining lending applications.
“When it comes to lending, cash flow is primary,” Mr Vacy-Lyle said.
“We are putting relationship managers back into branches where our customers want to be served.”
CBA aims to use technology to speed up decision making, with Mr Vacy-Lyle saying speed was key for firms seeking new debt.
It also expects a recovery in migration numbers will provide further new business lending opportunities, with Australia’s faster economic recovery compared to the rest of the world likely to be attractive for foreign investments and new start-ups.
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