Dow Jones Newswires, Monica Gutschi, 14 November 2007
Royal Bank of Canada still has the biggest share of Canada's small-business market, but is rapidly losing ground to Bank of Nova Scotia as the latter strives to expand its services to that group.
A survey by the Canadian Federation of Independent Business, or CFIB, shows that Royal Bank's share of the market has eroded by 3.7 percentage points in the years 2000 to 2006. Scotiabank's share grew by 3.3 percentage points.
"We feel we've been making excellent strides in our small-business banking offering," Scotiabank spokesman Frank Switzer said in an interview. "We feel that's certainly reflected in business growth as shown by the CFIB study."
Earlier this year, Scotiabank launched a "Running Start for business" package, to help entrepreneurs establish new small businesses and "Scotia Plan Writer for business", an online tool to help small business owners through the process of writing a business plan. It also offers "Scotia Blueprint for business," which provides advice on how to improve cash flow, and it has invested in its sales force and training program.
The bank's share of the small-business market climbed to 14.5% in 2006 from 11.2% in 2000.
Kyle McNamara, head of small business for Scotiabank, said in an interview that the bank has decided to increase its focus on that market segment and has made a "really, really significant investment in tools and training" in recent years. Those initiatives have already sparked a major increase in volume of business, he said, and the bank is planning a "double-digit" increase in the number of small-business banking specialists on staff.
"Those tools in combination with the expertise and the focus that our teams have, (is) really powerful," McNamara said.
Small business is "a very good market for the bank to concentrate on," he said, as owners typically have "deeper banking needs" since their business holdings are closely intertwined with their personal holdings.
Among the Big Five banks, only Toronto-Dominion Bank's market share also grew in the six-year period, to 13.6% from 12.1%.
Royal Bank's share dropped to 17.5% from 21.2%, with the biggest decline seen in the past three years. The CFIB survey is conducted once every three years.
Canadian Imperial Bank of Commerce saw its share drop to 11% from 13.3% and Bank of Montreal fell to 10.8% from 12.6%.
National Bank of Canada and HSBC Bank Canada, a unit of HSBC Holdings PLC, saw their shares hold steady, while the country's credit unions enjoyed a big surge in business. Their collective share rose to 11% from 8.7%. Quebec-based Desjardins Group also saw market-share gains, to 11% from 8.4%.
Doug Bruce, who authored the study for the CFIB, said that despite the shift in market share, the majority of small-business owners see little difference among the big banks.
"When they do shop around for a new bank, they don't find much of a change," he said. "And we find that if you look at the bank scores, all are smack dab in the middle. The score is very, very close."
In fact, Royal Bank's satisfaction rating was higher than that of Scotiabank's in the 2006 ranking. The results aren't exactly comparable, as factors such as branch hours were no longer measured, while business succession planning was added.
Overall, Bruce said, the relationship between the account manager and the small business owner was the paramount factor in the level of satisfaction with a bank's services.
"That will affect everything right across the board," he said.
The report is based on survey results from 9,347 owners of small- and mid-sized businesses. The CFIB represents more than 105,000 business owners
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Royal Bank of Canada still has the biggest share of Canada's small-business market, but is rapidly losing ground to Bank of Nova Scotia as the latter strives to expand its services to that group.
A survey by the Canadian Federation of Independent Business, or CFIB, shows that Royal Bank's share of the market has eroded by 3.7 percentage points in the years 2000 to 2006. Scotiabank's share grew by 3.3 percentage points.
"We feel we've been making excellent strides in our small-business banking offering," Scotiabank spokesman Frank Switzer said in an interview. "We feel that's certainly reflected in business growth as shown by the CFIB study."
Earlier this year, Scotiabank launched a "Running Start for business" package, to help entrepreneurs establish new small businesses and "Scotia Plan Writer for business", an online tool to help small business owners through the process of writing a business plan. It also offers "Scotia Blueprint for business," which provides advice on how to improve cash flow, and it has invested in its sales force and training program.
The bank's share of the small-business market climbed to 14.5% in 2006 from 11.2% in 2000.
Kyle McNamara, head of small business for Scotiabank, said in an interview that the bank has decided to increase its focus on that market segment and has made a "really, really significant investment in tools and training" in recent years. Those initiatives have already sparked a major increase in volume of business, he said, and the bank is planning a "double-digit" increase in the number of small-business banking specialists on staff.
"Those tools in combination with the expertise and the focus that our teams have, (is) really powerful," McNamara said.
Small business is "a very good market for the bank to concentrate on," he said, as owners typically have "deeper banking needs" since their business holdings are closely intertwined with their personal holdings.
Among the Big Five banks, only Toronto-Dominion Bank's market share also grew in the six-year period, to 13.6% from 12.1%.
Royal Bank's share dropped to 17.5% from 21.2%, with the biggest decline seen in the past three years. The CFIB survey is conducted once every three years.
Canadian Imperial Bank of Commerce saw its share drop to 11% from 13.3% and Bank of Montreal fell to 10.8% from 12.6%.
National Bank of Canada and HSBC Bank Canada, a unit of HSBC Holdings PLC, saw their shares hold steady, while the country's credit unions enjoyed a big surge in business. Their collective share rose to 11% from 8.7%. Quebec-based Desjardins Group also saw market-share gains, to 11% from 8.4%.
Doug Bruce, who authored the study for the CFIB, said that despite the shift in market share, the majority of small-business owners see little difference among the big banks.
"When they do shop around for a new bank, they don't find much of a change," he said. "And we find that if you look at the bank scores, all are smack dab in the middle. The score is very, very close."
In fact, Royal Bank's satisfaction rating was higher than that of Scotiabank's in the 2006 ranking. The results aren't exactly comparable, as factors such as branch hours were no longer measured, while business succession planning was added.
Overall, Bruce said, the relationship between the account manager and the small business owner was the paramount factor in the level of satisfaction with a bank's services.
"That will affect everything right across the board," he said.
The report is based on survey results from 9,347 owners of small- and mid-sized businesses. The CFIB represents more than 105,000 business owners
