In all, 92% of chief financial officers (CFOs) believe tighter credit conditions are likely to have a negative effect on the UK economy, but expect the impact on their own business to be minimal, according to Deloitte’s first CFO quarterly survey of corporate financial attitudes, launched today.
The Benchmarking Corporate Financial Attitudes survey, conducted between 21 September and 2 October, shows CFOs were more optimistic about the effect on their own business. A minority of 42% expected some negative impacts but the overwhelming majority of them believed the impact would be slight. Almost half, 46%, said they expected no impact on their business.
Commenting on the results, Margaret Ewing, Deloitte partner and vice chairman, said: ‘This may reflect the fact that CFOs of larger corporates believe their own company is robustly financed and they are confident of their banking relationships allowing them to weather the conditions.’
The survey indicates most CFOs believe credit availability and cost have deteriorated for corporations. In all, 78% regard short term market interest rates as high and 58% view longer term rates for corporate credit as ‘costly’.
Close to half, 43%, of the CFOs surveyed have taken more financial risk onto their company’s balance sheet in the last year. Moreover, despite tougher credit conditions, 56% of respondents plan to raise their level of gearing in the next 12 months.
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