Survey Reveals Bankers' Views on Industry More Optimistic Than They Have Been in Nearly Two Years Despite Impacts of Ongoing Trade War

ARLINGTON, Va., Aug. 20, 2019 /PRNewswire/ -- A recent, deep-dive, nationwide survey of more than 480 bank leaders indicated that their confidence in industry conditions continued to rise. Building on last quarter's upswing in confidence, Promontory Interfinancial Network's proprietary Bank Confidence Index^SM (measuring access to capital, loan demand, funding costs, and deposit competition today versus 12 months from now) measured 50.1 for the second quarter of 2019, rising above the 50-point watermark for the first time since the fourth quarter of 2017 and measuring nearly 4 points higher than for the first quarter of 2019.

That said, Mark Jacobsen, CEO and President of Promontory Interfinancial Network noted, "Bankers, particularly in the West and Midwest, have been worried about the impact of America's current trade policy. And recent volatility in the stock market shows they are not alone."

Nearly half of respondents (48%) indicated that they believe President Trump's trade policies have had a negative impact on their businesses, although almost as many (47%) said that they have had no impact on their banks.

Negative opinions of the current trade war were highest in the Midwest and the West. More than two-thirds (67%) of respondents in the West and 61% of respondents in the Midwest said trade policies have had a negative impact on their banks.

The survey also found that a year after Congress passed regulatory reform, 54% of respondents said the new law had not reduced administrative and compliance burdens and costs for their banks. Less than half (46%) said the law had reduced costs.

Promontory Interfinancial Network conducted the Q2 Bank Executive Business Outlook Survey from July 1 to July 12, 2019. Banking executives (CEOs, presidents, and CFOs) from 484 banks responded to the survey and represent more than nine percent of the banks in the country.

In other survey highlights:

• Most respondents (96%) identified traditional news sources, rather than social media, as a most-trusted source for news. National television news (42%) and national print outlets (39%) were the most trusted with local news ranking third (16%). A majority (53%) said they do not use social media to find trustworthy news and information.
• A majority (78%) reported that their banks do use social media for business purposes with 61% identifying Facebook as the most used, followed by LinkedIn (15%) and Twitter (2%). Perhaps surprisingly, nearly a quarter (22%) said their banks do not use social media for business purposes.
• On the metrics that make up Promontory Interfinancial Network's proprietary Bank Experience Index^SM (access to capital, loan demand, funding costs, and deposit competition now compared to 12 months ago), this survey found a level of 44.7, an increase of 1.4 points from the previous quarter.
• The biggest change came in respondents' projections for their banks' funding costs over the next 12 months. A plurality (41%) said they expect a decrease in the year ahead — which is a 29-point increase from last quarter and a 38-point increase from the same time a year ago.
• Respondents' views of how overall economic conditions affected their businesses in the previous 12 months — and how they might impact their businesses in the next 12 months — remained mixed. Nearly half (49%) said economic conditions were the same compared to 12 months ago, while 32% saw improvement and 19% saw worsening conditions. Similarly, 48% predicted conditions will be the same in a year, while 24% expect improvement.

Read more, including what bank leaders predicted for deposit competition and loan demand over the next year, in the full Q2 2019 Bank Executive Business Outlook Survey report. Also included in the report are trend information and geographic and asset-size variations for banker experiences (over the past 12 months) and for their forecasts (over the next 12 months).

This is the 18th survey published by Promontory Interfinancial Network with new data released every quarter. An archive of all previous surveys can be found on Promnetwork.com.

About Promontory Interfinancial Network, LLC 
Promontory Interfinancial Network – the inventor of reciprocal deposits and the nation's largest deposit allocation service provider – provides balance sheet and liquidity management solutions to help financial institutions grow franchise value. The company, chosen by thousands of banks since its founding nearly two decades ago, has assembled the largest bank network of its kind. Its service offerings help institutions to acquire high-value, local relationships; purchase funding; reduce collateralization costs; and buy and sell bank assets.

SOURCE Promontory Interfinancial Network

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