NAMA given thumbs up in survey

THE majority of leading finance directors in Irish companies believe NAMA will have a positive effect on credit flow and the profile of the banking sector.

The latest edition of the quarterly Deloitte CFO (chief financial officer)Survey, covering the first three months of 2010, shows that 60% of chief financial officers feel the Government’s bad bank project will benefit credit availability, while just over half (52%) think it will play a major part in restoring credibility to the banking sector.

However, the survey also reveals that most officers view Irish-owned banks and equities as their least preferred method of external funding, with foreign- owned banks being “better alternatives”.

As much as 63% of the finance directors surveyed also indicated that the cost of credit for companies was expensive.

Elsewhere in the survey, almost three quarters of those polled said that they anticipate Irish economic recovery will happen next year, with only 12% believing the economy will get back on its feet this year.

“This quarter’s survey results show that Irish CFOs believe that the progress to both economic and corporate recovery will be a slow, but hopefully steady, progress.

“Sustainable growth, rather than large jumps in revenue and profitability, is the clear goal within their organisations,” said Deloitte’s Shane Mohan.

He said: “The optimism that seems to have taken a firm hold amongst our respondents is certainly very welcome. However, coupled with this, CFOs are also very realistic. They know that there are still a number of challenges facing them.

“This is clearly indicated by the fact that revenue maintenance/growth, cost management and maintaining profit margins were, for the third quarter in a row, identified as the top financial challenges. Irish CFOs recognise the imperative to retain control over costs, particularly given further possible challenges to competitiveness from interest and exchange rate movements.”