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Half of bankers say 2012 will be less profitable for banks

Last week the Bank of England released a study showing that UK bankers’ confidence has dipped sharply over the last six months. We have seen similar results in our recent surveys of risk managers in the US and Europe.

Here’s another data point: At FICO World 2011 earlier this month, we polled the 700 attendees — representing retail banks and credit grantors from 45 nations — every day about their outlook on the industry. Here are the highlights from those polls:

  • Bankers were evenly split on whether the global banking industry would be more profitable or less profitable in 2012. 52% said more, 48% said less. Whether this is a hopeful outlook or further cause to worry depends on whether you see the glass as half empty or half full!
  • 61% of respondents said that weak economic conditions pose the biggest risk to their bank in 2012. The next largest response was increased government regulation, with 21% of the vote.
  • Over half – 51% — of respondents said that regulations requiring banks to hold greater capital reserves will mean stricter lending standards for consumers and small businesses. The second-likeliest outcomes according to FICO World attendees were lower credit / loan amounts for borrowers, and more fees forconsumer banking products, each of which drew 21% of the responses.

Of course, FICO World attendees largely oversee risk management, collections and fraud operations — not the most optimistic part of any bank. But judging from other surveys, it would appear that bankers in most countries are bracing for a dismal year.

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