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Banks benefit as businesses seek local financing

by Staff Reporter2 minute read

With international funding markets still dry, Australian businesses are increasingly looking to local banks to finance their operations.

The latest East & Partners Institutional Banking Markets report found that three out of every four top Australian businesses now rely on domestic debt lines from their bank.

Zoran Knezevic, analyst with East & Partners, said the demand for plain vanilla bank debt was an effect of the contraction in other funding markets, caused by the US sub-prime crisis.

In the past few years demand for such debt had contracted Mr Knezevic said, but the latest report had unveiled a dramatic turnaround.

Mr Knezevic said the growing reliance on debt among Australia’s biggest businesses had been good news for leading debt providers particularly Commonwealth Bank and National Australia Bank.

Published: 22-05-08

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