Australia Bank Guarantee Market Outlook – 2030
The Australia bank guarantee market size was valued at $348.16 million in 2020, and is projected to reach $645.71 million by 2030, growing at a CAGR of 6.4% from 2021 to 2030.
A bank guarantee refers to a consent provided by a bank or any other financial institution that if a certain borrower fails to pay a loan, then the bank or the financial institution will take care of the losses. The bank assures the original creditor through this bank guarantee that if the borrower does not meet their liabilities, the bank will be held responsible for the losses during trade.
Bank guarantee promotes cross border trading in Australia with other countries by providing financial guarantee to various importers and exporters to successfully execute trade transactions. This is a major contributing factor toward the growth of bank guarantee in Australia. In addition, lower financial risks while trading and increased digitalized offerings of bank guarantee products are some of the important factors driving the market growth. However, increasing trade wars between Australia and other countries due to political unrest, exchange rate fluctuations and lack of credit facilities for small & medium-sized enterprises for carrying out domestic trade are some of the factors that limit the Australia bank guarantee market growth. On the contrary, rapid increase in import & export activities to and from Australia along with government support toward increasing trade activities are expected to offer remunerative opportunities for the market in the coming years.
The report focuses on growth prospects, restraints, and trends of the Australia bank guarantee market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the Australia bank guarantee market outlook.
By Enterprise Size
Large Enterprises segment accounted for the highest market share in 2020
Segment Overview
The Australia bank guarantee market is segmented on the basis of type, application, end user, and enterprise size. By type, the market is segregated into financial guarantee and performance guarantee. Depending on the application, it is divided into international and domestic. On the basis of end user, the market is bifurcated into exporters and importers. On the basis of enterprise size, it is segmented into small enterprise, medium enterprise and large enterprise.
By End-user
Importers is projected as one of the most lucrative segments.
Competitive Analysis
The report analyses the profiles of key players operating in the Australia bank guarantee market such as Australia and New Zealand Banking Group Limited (ANZ), BNP Paribas, Citigroup, Inc., DBS Bank, Deutsche Bank AG, HSBC Holdings PLC, JPMorgan Chase & Co., Mitsubishi UFJ Financial Group, Inc., Standard Chartered PLC, and United Overseas Bank Limited (UOB). These key players have adopted strategies, such as product portfolio expansion, mergers & acquisitions, agreements, regional expansion, and collaboration, to enhance their market penetration.
COVID-19 Impact Analysis
The COVID-19 pandemic negatively impacted the Australia bank guarantee market, owing to business interruptions caused due to the stringent lockdowns in Australia, which reduced the business activities, both internationally and domestically. Furthermore, irregularities in demand & supply of goods caused due to ban on the transportation in the country resulted in business closures across several industry verticals, which are expected to decline the demand for bank guarantee products. Hence, many traders across Australia reduced availing bank guarantee and the market is anticipated to recover the loss incurred and gain profit by the third quarter of 2022.
Top Impacting Factors
Bank Guarantee Reduces the Chances of Financial Risks for Importers and Exporters
Bank guarantee involves financing of international and domestic trade flows. It reduces the risks involved in an international trade transaction such as default in payment by the importer after the delivery of the products. In case, the buyer fails to make the payment on time, the seller can be assured that payment will be made on behalf of the bank. Thus, it reduces the chances of financial fraud for the seller. Furthermore, as international trade takes place across borders, and foreign companies are unlikely to be familiar with one another and hence, there are various risks to deal with such as country risk associated with doing business with a foreign country, exchange rate risk, political risk, and sovereign risk. Therefore, bank guarantee reduces the financial risk associated with businesses trading within and outside Australia.
Lack of Credit Facilities for SMEs in Australia
Lack of support to SME businesses to avail loan, is a major factor that limits market growth. Because of low credit score, it is difficult for SMEs to avail bank guarantee from banks to purchase goods from domestic as well as international borders. For availing a bank guarantee, SMEs need to maintain a good credit score, but due to some unforeseen circumstances such as fall in demand for products and services, loss in business, business interruptions due to lockdowns and others, cause SMEs to make late payments for which the credit score reduces and thus, they are unable to avail guarantee from banks to do business. Thus, this is a major factor hampering the growth of Australia bank guarantee market.
Rising Import and Export Activities Between Australia and Other Countries
Australia mainly imports machinery, mineral fuels, vehicles, medical equipment, and pharmaceuticals. Its main exports are aluminum, inorganic chemicals, meat, cereals, and mineral fuels. These products are in huge demand in Australia and will further increase in the future. Thus, the rising import and export activities of Australia will provide ample opportunities for the growth of Australia bank guarantee market, as more number of buyers and sellers take bank guarantee from Australian banks. Furthermore, new trade agreements between cross-border trading between Australia and other countries provide lucrative opportunities for the growth of Australia bank guarantee market in the upcoming years.
Key Benefits for Stakeholders
- The study provides in-depth analysis of the Australia bank guarantee market share along with current & future trends to illustrate the imminent investment pockets.
- Information about key drivers, restrains, & opportunities and their impact analysis on the Australia bank guarantee market size are provided in the report.
- Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the market.
- An extensive analysis of the key segments of the industry helps to understand the Australia bank guarantee market trends.
- The quantitative analysis of the Australia bank guarantee market forecast from 2021 to 2030 is provided to determine the market potential.
Australia Bank Guarantee Market Key Segments
By Type
- Financial Guarantee
- Performance Guarantee
By Application
- International
- Domestic
By End User
- Exporters
- Importers
By Enterprise Size
- Small Enterprises
- Medium Enterprises
- Large Enterprises
Key Market Players
- Australia and New Zealand Banking Group Limited (ANZ)
- BNP Paribas
- Citigroup, Inc.
- DBS Bank
- Deutsche Bank AG
- HSBC Holdings PLC
- JPMorgan Chase & Co.
- Mitsubishi UFJ Financial Group, Inc.
- Standard Chartered PLC
- United Overseas Bank Limited (UOB)
Australia Bank Guarantee Market Report Highlights
| Aspects | Details |
 By Type |
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 By Application |
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 By End User |
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 By Enterprise Size |
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 Key Market Players | Deutsche Bank AG, JPMorgan Chase & Co., BNP Paribas, Standard Chartered PLC, DBS Bank, HSBC Holdings PLC, United Overseas Bank Limited (UOB), Mitsubishi UFJ Financial Group, Inc., Citigroup, Inc., Australia and New Zealand Banking Group Limited (ANZ) |
Analyst Review
Financial assurance provided by the bank as guarantee for the importer & exporters, which reduces the risk of fraud in cross border transactions and rapid growth of import and export activities to and from Australia are some of the major trends in the market. Furthermore, during the COVID-19 pandemic, the consumer trend shifted toward technologically advanced banking services. Therefore, many banks in Australia adopted technology in providing bank guarantee services through technology, thus promoting social distancing in order to curb the spread of virus. For instance, two of Australia's big banks, the Commonwealth Bank of Australia and ANZ, are working with leading Singapore-based blockchain company XinFin to boost automation and transparency in providing bank guarantee for trade asset and risk distribution.
The Australian bank guarantee market is fragmented with the presence of key vendors such as Australia and New Zealand Banking Group Limited (ANZ), BNP Paribas, Citigroup, Inc., DBS Bank, Deutsche Bank AG, HSBC Holdings PLC, JPMorgan Chase & Co., Mitsubishi UFJ Financial Group, Inc., Standard Chartered PLC, and United Overseas Bank Limited (UOB). These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
The Australia bank guarantee market is estimated to grow at a CAGR of 6.4% from 2021 to 2030.
The Australia bank guarantee market is projected to reach $645.71 million by 2030.
To get the latest version of sample report
Lower financial risks while trading and increased digitalized offerings of bank guarantee products.
The key players profiled in the report include BNP Paribas, Citigroup, Inc., DBS Bank, Deutsche Bank AG and many more.
On the basis of top growing big corporations, we select top 10 players.
The Australia bank guarantee market is segmented on the basis of type, application, end user, enterprise size, and region.
The key growth strategies of Australia bank guarantee market players include product portfolio expansion, mergers & acquisitions, agreements, regional expansion, and collaboration.
Small Enterprises segment would grow at a highest CAGR of 16.4% during the forecast period.
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