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 businessman presents a company annual report in front of a group seated at a table
Bank Shares

Earnings season predictions: Macquarie weighs in on the big 4 banks

What are the broker's predictions?

Read more »

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

Major CBA investor reveals why he's all in

This investor described one major reason driving his investment in CBA shares.

Read more »

Young investor sits at desk looking happy after discovering Westpac's dividend reinvestment plan
Bank Shares

Invested $10,000 in Westpac shares 2 years ago? Guess how much you've already banked!

Atop their regular dividend payments, Westpac shares have enjoyed a strong two-year run.

Read more »

Woman calculating dividends on calculator and working on a laptop.
Bank Shares

Buying CBA stock today? Here's the dividend yield you'll get

CBA's yield right now might surprise you.

Read more »

A financial expert or broker looks worried as he checks out a graph showing market volatility.
Bank Shares

How much would the ASX 200 fall if CBA shares returned to 'fair value'?

CBA shares account for 12% of the ASX 200.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Dividend Investing

How are these passive income investors earning a 7.5% dividend yield on their surging CBA shares?

CBA shares are proving more lucrative for some passive income investors than others.

Read more »

A woman in a bright yellow jumper looks happily at her yellow piggy bank.
Bank Shares

$10,000 invested in CBA shares in FY25 is now

Let's see whether it was a successful 12 months for bank investors in the last financial year.

Read more »

Woman with spyglass looking toward ocean at sunset.
Bank Shares

What could happen to the big 4 banks in FY26?

What’s in store for the big four banks over the next 12 months?

Read more »