22 Nov Is Your Bank Rewarding Your Loyalty? – CASE STUDIES
A generational farmer was preparing to purchase a neighbouring property. He was a lifelong client of his bank and normally would have approached the bank himself, comfortable in the thought that his long-standing relationship with his bank would ensure he received the best rates possible.
His financial advisor suggested that he approach other banks to test the market. The client engaged RSP to manage a tender process for him.
A professional credit submission for the required $2,000,000 was prepared and presented to the market. It was an attractive proposition for the banks which ensured strong competition.
His current bank came back with rates 1% higher than the best offer received, knowing that they were quoting against other banks. What would the rate have been if there were not competitors involved?
This really tested the client’s loyalty to a bank that he had enjoyed a good relationship for many years. He questioned past dealings and was very disappointed that they hadn’t been competitive.
He is now more aware of the value in a tender process for his banking business and is committed to a regular review with RSP.
Case Study Example $15.0m
For 130 years, a deeply entrenched and respected family banked with one bank. The stoic pride that embraces such an enduring relationship can only be attuned to the culture of Australian farmers. 130 years of farming captures every capitulated adverse event a history book could scribe. Floods, famine, war, depression, droughts, fire, price crashes, disease, they saw it all.
The fifth generation buy out of siblings increased the debt load to maintain the portfolio of properties. This generation also came with a balanced business mindset whereby corporate governance of decision making was a matrix around what was good for the business and family.
Robinson Sewell Partners was engaged to provide an independent balanced approach to their banking. What became evident out of the process was that the encumbered bank was all about the bank first and client second. The winning bank provide a novel fresh approach, a client-centric package of service, product design, longevity considerations. The client refinanced on this basis whilst saving $100,000 per annum for the business (albeit this was not the only winning factor).