Bankers Think Economy Is Looking Up
US Banker | June, 2010
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FeedbackBankers are getting more optimistic about the economy, and hiring is starting to pick up, according to a recent survey of top bank executives by Grant Thornton LLP.
Just under half of the survey participants (45 percent) say they expect the economy to improve in the next six months—a significant change from how the bankers felt late last year. In a December survey less than one-quarter (24 percent) said they expected to see improvement within six months.
Only 11 percent predicted the economy would get worse, down from 20 percent in December; 44 percent said it would likely stay the same, compared with 56 percent in December.
“Overall it appears that bankers believe that the economy has finally turned a corner," said John Ziegelbauer, national managing partner of Grant Thornton's Financial Institutions practice. "Their optimism about the economy is spilling over into their own banks, with bankers reporting that they are also cautiously optimistic about the number of people they expect to hire in the coming months.”
Though 59 percent of the survey participants said their staff levels would remain unchanged over the next six months, 25 percent expect to increase their hiring (up from 18 percent in December). The number of banks that intend to reduce staff dropped slightly, to 16 percent, from 18 percent in December.
Brandon Cooper, a partner at the Indiana executive-search firm Management Recruiters of Newburgh, said he is seeing much more hiring activity among banks lately.
Of the roughly 100 calls he makes to banks daily, one out of 10 or 20 are hiring or expect to hire soon, says Cooper, who works mostly with community banks in Indiana, Kentucky and Ohio. In December, one of every 30 or 40 had plans to hire.
“More banks are investing for when the downturn reverses,” he says.
Most of the open positions Cooper sees are in areas like corporate credit, asset management and portfolio management. Banks are still not interested in adding more lenders, because of weak loan demand. “Small businesses don’t have the borrowing needs that they used to,” Cooper says.
But bankers are nonetheless optimistic about their local economy, according to the Grant Thornton survey.
More than one-third of bankers (35 percent) expect their local economy to improve in the next six months, up from 22 percent in December. Only 9 percent expect their local economy to get worse, down from 18 percent in December.
Grant Thornton conducted its Bank Executive Survey with Bank Director magazine. The national survey included 230 bank chief executives and chief financial officers, 59 percent of them from small banks (those with less than $500 million of assets).
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