ARLINGTON, Va., May 11, 2021 /PRNewswire/ — Optimism about the current state of the U.S. economy skyrocketed in the first quarter of 2021, according to a survey of more than 500 bankers released Tuesday by IntraFi Network.
Sixty-two percent of those surveyed said overall economic conditions for their bank had improved compared to 12 months ago, a significant 38-percentage point jump on this measure from the 4th quarter of 2020. Bankers also see a brighter future ahead, with 57% saying they expect improved conditions during the 12 months ahead, a 19-percentage point rise from a quarter earlier.
“Projections on the economy have swung wildly over the past 12 months, but bankers are growing more confident that it’s on the right track,” said Mark Jacobsen, Cofounder and CEO of IntraFi Network. “While challenges clearly remain, it’s clear most bankers are optimistic about the future.”
Despite record levels of stimulus funding and a highly accommodative monetary policy, only 26% of respondents predicted inflation will rise enough to spur the Federal Reserve to raise interest rates by the end of the year.
A sizable majority of executives (62%) believe Congress and the President should finance all or part of the Biden Administration’s more than $2 trillion infrastructure initiative with tax increases, spending cuts, deficit spending, or a combination of the three.
Even with the wider availability of COVID-19 vaccines, 41% of bankers predicted they will wait until after July 1 to restore customer-facing staffing to pre-COVID levels. Another 8% said their operations may never return to pre-COVID levels.
Bank executives also continue to view cryptocurrencies with skepticism, even as they have grown in popularity with certain investors. A large majority (77%) of bankers surveyed said they do not plan on including cryptocurrencies in their five-year business plan.
This survey garnered responses from CEOs, presidents, and CFOs at 515 unique banks nationwide.
- Funding Costs — Bank funding costs remain at favorable levels as only 4% of respondents reported a rise in costs during the previous 12 months. Twenty-nine percent projected costs to decrease further in the year ahead.
- Deposit Competition — Twenty percent of respondents predicted deposit competition would decrease in the next 12 months; 51% expected it to remain unchanged.
- Loan Demand — Sixty-two percent of respondents expected loan demand to improve over the next year, a jump of 14 percentage points from the previous quarter.
- Access to Capital — Only 4% of respondents predicted access to capital would worsen in the next 12 months; 74% expected it to stay the same.
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About IntraFi Network
Chosen by thousands of banks since its founding (as Promontory Interfinancial Network) nearly two decades ago, IntraFi Network has assembled the nation’s largest bank deposit network. Its solutions connect financial institutions of all sizes to help each build stronger relationships with its customers, fund more loans, seamlessly manage liquidity needs, and earn fee income. As the nation’s #1 provider of reciprocal deposits and a leading provider of overnight and term funding options, IntraFi Network has the scale to be a strategic partner for even the largest bank’s funding and capital management needs, or for the smallest.
SOURCE IntraFi Network
Originally Appeared On: https://www.prnewswire.com/news-releases/banker-optimism-soars-on-state-of-us-economy-301288931.html