Survey Reveals Wait-and-See Attitude Among Bank Executives

August 16, 2012 at 11:27 AM
Each year, Grant Thornton LLP and Bank Director Magazine publish a survey of bank CEOs, CFOs, and other senior executives. Last year’s survey heralded a return to optimism among senior management. This year’s survey (published last week) shows a different picture. Only 28% of this year’s respondents believe that their local economy will improve in six months, compared to 44% of respondents in 2011. The change in attitude is more pronounced at the national level: only 13% now believe that the U.S. economy will improve by year-end, compared to 39% in 2011. If we had to guess, we would say that the start-and-stop nature of the current economy, the uncertainty inherent in an election year, and the pages and pages of Dodd-Frank-related rules and regulations that have yet to be filled in have all contributed to this new outlook.
 
The views of these bank executives also seem to be driven (not surprisingly) by worries about sources of future earnings growth. Two-thirds of survey respondents reported that organic loan demand was a concern at their institution – and with good reason. The FDIC reported that loan balances declined during 1Q12.
Additional commentary on the survey and the full results can be found here.

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