Bank directors have become more optimistic about economic improvement, with 43 percent expecting recovery progress by the end of the year, up from 13 percent in 2012, according to a survey by Bank Director and Grant Thornton LLP.
The survey included responses from 130 senior bank executives and directors nationwide at institutions with more than $500 million in assets.
Among issues weighing on bankers is margin compression, which 89 percent pointed to as their top concern. Regulatory compliance burden, loan competition and cyber security also loom large for respondents.
Cyber security concerns particularly included online banking fraud and data theft. Larger banks fret about denial-of-service attacks. Among banks with $10 billion or greater in assets, 90 percent list cyber security as the top concern.
About 40 percent on banks plan to reduce staff size, and about 33 percent expect to close one or more branches. At the same time, 84 percent will upgrade their technology to gain efficiencies.
Respondents are closely following the implementation of Dodd-Frank Act guidelines, which was cited as a higher concern than Basel II.
Bankers’ optimism might be even more pronounced if not for the concern about regulatory challenges that lie ahead, said Nichole Jordan, national banking and securities sector leader at Grant Thornton.
“There’s still a great deal of uncertainty as a result of the evolving regulatory environment,” she said. “Banks are increasingly concerned that they will be unable to meet onerous compliance requirements and still be profitable.”
The full survey results are available at BankDirector.com.