BusinessCompany NewsCFOs shrug at credit crunch effect on own corp

CFOs shrug at credit crunch effect on own corp

Turmoil in credit markets has taken its toll on corporate sentiment but most CFOs think they can weather the effects on their own business

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.

Further reading:

Insider Business Club: economic recovery

Credit crunch, weaker dollar take toll on US economy

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