BusinessCompany NewsCredit crunch impact to last most of 2008

Credit crunch impact to last most of 2008

Financial services companies not expecting normal market conditions for some time.

The majority of the UK’s financial institutions expect the impact of the
current credit crunch to last for most of the year, but has yet to hurt profits.

The latest financial services survey from the
CBI and
PricewaterhouseCoopers also
asked some one-off questions about the current credit market conditions and
received largely gloomy responses. Seven out of ten respondents felt that
‘normal’ market conditions would not return for at least six months.

Business optimism was also hard to come, especially among building societies,
while volumes fell at their sharpest since 1991. Profitability, however, was
still growing, although many do not expect this to continue in the coming
months.

‘The financial services industry is concerned about the lasting implications
of the credit squeeze and how long these ripples will be felt,’ said Andrew
Gray, banking partner at PwC. ‘Although results have revealed that 70% of
respondents fell that it will take at least six months for market conditions to
return to normal level, this will be dependent on the health of corporates and
on how current market conditions spread beyond financial services.’

Further reading:

Annual
reports face harsher auditor scrutiny

BDO:
FDs uncertain in current credit crunch

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