Bank Executives Forecast Rising Funding Costs and Weakening Loan Demand
A recent survey by fintech firm IntraFi reveals that bank executives are bracing for a challenging operating environment over the next year. Approximately 87% of respondents anticipate an increase in funding costs, marking a significant jump from previous quarters. This pressure is compounded by stagnant loan demand and concerns regarding bond market volatility, which many believe will squeeze net interest margins or lead to further unrealized losses on securities portfolios. The survey, which included over 400 banking executives, highlights a cautious economic outlook, with 83% of respondents expecting conditions to either worsen or remain unchanged. To manage these pressures, banks are adopting disciplined pricing strategies and adjusting balance sheet compositions, with many opting to reduce securities balances to maintain liquidity for potential loans.
Topics: banking industry survey economic outlook funding costs interest rates net interest margins