Sixty-two percent of corporate CEOs participating in a Marcum LLP -Hofstra University survey said they are somewhat to very concerned about their company bank’s stability, according to the results, released this week.
“Despite the sizable number of CEOs expressing concern about their company’s bank’s stability, the large majority (87.8%) said they planned to maintain their current bank relationship,” note the authors of a report sharing the results. Four percent of the participants said they would be open to changing banks, and 9% were unsure.
The survey is a periodic gauge of middle-market CEOs’ outlook on the current business environment and their priorities and concerns for the next 12 months.
Size and stability is what a majority of CEOs (61.2%) look for in choosing their company’s bank, according to the survey, followed by favorability of the terms offered by the bank (50.6%). CEOs also look at a bank’s connection to their company’s business sector and connection to their local community (42.4% and 37.6%, respectively).
As the McKnight’s Business Daily previously reported, regional banks are facing significant disruptions. Beth Burnham Mace, National Investment Center for Seniors Housing and Care chief economist and director of outreach, noted issues faced by Silvergate, SVB and Signature Bank in March, and First Republic Bank was sold to JP Morgan Chase at the beginning of May.
More than a fourth (27.1%) of the respondents said that borrowing from financial institutions has become more difficult over the past year. Forty percent of the CEOs said that borrowing has not become more difficult, and 33% responded that they have not attempted to borrow money during the past year.
The Federal Reserve Chair Jerome Powell on May 3 announced the most recent in a series of quarterly rate hikes since March 2022, marking the highest rate in 16 years.
