So Bank CEO, tell me what you think …

The Banker magazine hit the mark again this month with a research report on CEOs views.

During February and March, they surveyed 87 bank CEOs across Western (6.5%) and Eastern (15.6%) Europe, North (5.2%) and South (14.3%) America, Africa (20.8%) and Asia (23.4%).

The figures in brackets are the percentage of CEOs from each region responding, and here’s a summary of key results:

Will business be better or worse in 2009 compared to 2008?

28.7% expect business to be better;
31% expect business to be a little worse; and
11.5% expect business to be a lot worse.

Comment: if 1 CEO was Canadian, then Western European and the USA would equal around 11.5%, about the same number that expect things to be a 'lot worse'!

When will we recover?

Q2 2009     25.3%,
Q3               9.2%
Q4             23.0%
1H 2010     17.2%
2H 2010     19.5%
2011+          5.7%

That means approximately 57.5% of CEOs expect recovery this year … interesting that South America, Africa and Asian CEOs equal 57.7% of respondents, which means American and European CEOs may be looking to next year.

The main causes of the crisis were:

1. Exotic financial structures
2. Excessive leverage
3. Global macroeconomic imbalances creating excessive liquidity
4. Poor regulation
5. Poor management

48.2% described their capital levels as higher than regulatory requirements, whist only 3.5% thought theirs was too low (Citi? BoA? RBS?).

50.6% expect their balance sheet structure to stay the same, whilst 15% thought a significant restructuring would be needed … woohoo!

A key note for those in my community is where do you see investment areas in 2009:

71.3%     IT Systems
64.4%     Core Banking Systems
63.2%     The Bank's Retail Network
56.3%     Compliance
36.8%     Customers Surveys
29.9%     New Staff
25.3%     Environmentally Friendly Technology
24.1%     CSR Projects

In other words, bugger the planet … we’re more interested in survival and prosperity!

Some other interesting notes include:

• 40% of CEOs reported retail savings and deposits are the most active business are for the bank and 25.3% said that corporate lending is the most active area; less than 5% said that mortgage lending would be the most active area; and

• Asked how governments can help banks, less than a third answered through quantitative easing … is that why the Treasury is having second thoughts about more quantitative easing

Loads more in the survey and the magazine so, if you find this interesting, you’ll just have to go and buy it!