Business intelligence provider Coalition’s latest Transaction Bank Index reveals that cash management revenues in the first half of this year were down to levels not seen since 2016. The report attributes this – unsurprisingly – to interest rates.
The interest rate environment has undoubtedly had a significant impact. “Other central bank actions in the form of QE alleviated the initial liquidity squeeze at the start of the Covid-19 crisis and have since resulted in unprecedented growth in market liquidity, putting further pressure on rates,” observes Karen Braithwaite, global head of transaction banking at Barclays.
Since the onset of the crisis, many corporates have held higher cash balances and have drawn down on their (uncommitted) lending facilities in order to have cash available when necessary.
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