Low Interest Rates, Loan Demand Key Concerns for Bankers in 2013

BRENTWOOD, TENN., February 26, 2013 – Thirty-five percent of bankers and bank directors list continued net interest margin compression as the top concern for their banks, with another 25 percent citing loan demand, reveals an audience survey conducted by Bank Director and Grant Thornton LLP of more than 250 bank CEOs and directors attending the organization’s annual mergers and acquisitions conference January 28. Concerns with the net interest margin and loan demand are connected, as low interest rates and low loan demand diminish margins. Al Dominick of Bank Director and Nichole Jordan of Grant Thornton LLP conducted the audience survey at Bank Director’s Acquire or Be Acquired conference in Scottsdale, Arizona, which was completed by 273 CEOs, senior officers and directors of U.S. banks. Key findings include:

• Despite concerns cited about loan demand, 60 percent of bankers and directors cite loan origination as the top way their banks plan to grow. Fifty-seven percent expect to see an increase in loan demand, while 10 percent expect to see a decline and one-third expect no change.
• Twenty-eight percent of bankers and bank directors plan to grow through the traditional merger, which could be a smart choice for banks that seek to grow quickly.
• Even with Basel III looming and its increased capital requirements for banks, the majority of the executives and directors surveyed have no plans to raise capital. Only 25 percent plan to raise capital in 2013.
• Not surprisingly, 71 percent are deeply worried about the political landscape and its impact on their bank and customers. 

Grant Thornton further explores these results in a free video now available on BankDirector.com, focusing on how banks can address loan demand and compressed net interest margins. The survey results are available online at BankDirector.com.

ABOUT BANK DIRECTOR
Since 1991, Bank Director has served as a leading information resource for the directors and officers of financial institutions.  Throughout the year, Bank Director asks officers and directors of financial institutions to share their thoughts on board-specific issues like compensation, managing risk, growth, board liability and strategic planning.  Bank Director’s research and analysis provides a bank’s board members with unparalleled insight and information. In addition to research, Bank Director reaches the leaders of the banking industry through its quarterly magazine, annual conferences, and its website, BankDirector.com. Bank Director is published by DirectorCorps, and headquartered in Brentwood, Tennessee.

ABOUT GRANT THORNTON LLP
The people in the independent firms of Grant Thornton International Ltd provide personalized attention and the highest quality service to public and private clients in more than 100 countries. Grant Thornton LLP is the U.S. member firm of Grant Thornton International Ltd, one of the six global audit, tax and advisory organizations. Grant Thornton International Ltd and its member firms are not a worldwide partnership, as each member firm is a separate and distinct legal entity.

In the U.S., visit Grant Thornton LLP at www.GrantThornton.com/financialservices.

Source: BankDirector.com

Contact: Emily McCormick, (615) 777-8471, [email protected]