Survey: 60% of CFOs believe NAMA will get credit flowing
Some 60% of Chief Financial Officers of Irish companies believe that the National Assets Management Agency (NAMA) will ultimately have some positive impact on the availability of credit, according to a new survey.
In addition, 52% indicated that they believe it will have a positive impact in restoring the credibility of the banking sector, the latest quarterly CFO survey by Deloitte indicated.
The survey, which looks to establish the views of CFOs of larger Irish companies in relation to financial markets, the economic outlook and business trends, found that there was a general welcome for NAMA in Q1 2010 as the first loans were transferred to the agency.
Despite this view on NAMA, it is clear that the availability of credit remains a significant issue. Irish CFOs do not see the supply of credit improving in 2010 but there is optimism among a majority that 2011 and beyond will see increased credit availability.
Irish owned banks, along with equities, are considered to be the least preferred method of external funding, with foreign owned banks seen to be better alternatives. 63% of the CFOs surveyed indicated that the cost of credit for Irish corporates was costly.
Overall, 73% of those surveyed believe that economic recovery will take place in 2011, broadly unchanged (78% in Q4 2009) on the previous quarter. Only 12% of CFOs believe that the Irish economy will recover this year.
With regards to the outlook within their own organisations, sentiment among CFOs is continuing to improve.
CFO sentiment shows an 8% improvement to 32% on those predicting a return to growth in 2010, compared with last quarter. Some 48% expect their organisation to return to growth in 2011 and beyond.
CFOs remain broadly positive regarding revenue and profits over the next six months – the majority (69%) expect both to at least stabilise or increase.
“This quarter’s survey results show that Irish CFOs believe that the progress to both economic and corporate recovery will be a slow but hopefully steady process," Shane Mohan of Deloitte said.
"Sustainable growth rather than large jumps in revenue and profitability is the clear goal within their organisations."
