Executives think 2010 will be a better year
By Stephen Bernard |
August 20, 2009, Thursday
|
Print Edition
Print Edition
FINANCIAL services executives in America believe business conditions will bottom in 2009 before a recovery in the sector and broader economy occurs next year, according to a new study from KPMG LLP.
About 70 percent of the 130 executives polled believe revenue and profitability in the financial services sector will improve in 2010, according to the business climate survey conducted by the audit, tax and advisory firm. However, respondents were split about whether a recovery among financial firms will lead or lag a rebound in the broader United States economy.
The financial services sector has been among the hardest hit by the credit crisis and ongoing recession that began in late 2007. Major financial firms such as American International Group Inc, Citigroup Inc and Bank of America Corp have received billions of dollars in government aid amid the market downturn.
Financial firms have been struggling with mounting losses across nearly all types of consumer and commercial loans as more customers fall behind on repaying debt. Companies have also been forced to sharply cut the value of certain investments as demand has waned for products such as securities backed by pools of risky mortgages.
More than half of the executives surveyed said the downturn made it more difficult to raise capital or receive financing to operate businesses.
Among executives' biggest concerns are handling the risk of troubled assets, finding new revenue sources and raising capital, according to the survey.
More broadly, executives are looking for signs of stabilization in the housing market, improved consumer confidence and spending as well as job creation to boost the economy.
The housing market is one of the biggest reasons for losses at financial firms.
About 70 percent of the 130 executives polled believe revenue and profitability in the financial services sector will improve in 2010, according to the business climate survey conducted by the audit, tax and advisory firm. However, respondents were split about whether a recovery among financial firms will lead or lag a rebound in the broader United States economy.
The financial services sector has been among the hardest hit by the credit crisis and ongoing recession that began in late 2007. Major financial firms such as American International Group Inc, Citigroup Inc and Bank of America Corp have received billions of dollars in government aid amid the market downturn.
Financial firms have been struggling with mounting losses across nearly all types of consumer and commercial loans as more customers fall behind on repaying debt. Companies have also been forced to sharply cut the value of certain investments as demand has waned for products such as securities backed by pools of risky mortgages.
More than half of the executives surveyed said the downturn made it more difficult to raise capital or receive financing to operate businesses.
Among executives' biggest concerns are handling the risk of troubled assets, finding new revenue sources and raising capital, according to the survey.
More broadly, executives are looking for signs of stabilization in the housing market, improved consumer confidence and spending as well as job creation to boost the economy.
The housing market is one of the biggest reasons for losses at financial firms.
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