Team Blitz India
LONDON: Finance leaders are continuing to focus on defensive balance sheet strategies, according to a recent survey. UK CFOs now rate bank borrowing as being more unattractive as a source of corporate financing than at any time since at least 2007, with a growing focus on debt reduction, the Deloitte’s Q3 CFO Survey has found.
In the case of the net percentage of CFOs who rate bank borrowing as a very or somewhat attractive source of funding for UK corporates, 56 per cent think it is unattractive against 19 per cent who think it is attractive, the survey added.
Despite this, levels of business confidence rose in the third quarter and are running slightly above average, with a net nine per cent feeling more optimistic about the financial prospects for their company, it mentioned.
The survey was conducted between September 19 and October 2, 2023, and captures the sentiment among the UK’s largest businesses. Risk areas tracked in the survey included higher energy prices or disruption to energy supplies, rising geopolitical risks worldwide including the war in Ukraine, the prospect of further rate rises and a general tightening of monetary conditions in the UK and the US.
The survey found CFOs’ attitudes to financing their businesses have shifted and they now see equity financing (net-10 per cent) as being more attractive than debt financing, either in the form of bank borrowing (net -37 per cent) or corporate bond issuance (net -39 per cent). Between 2009 and the start of this year, finance chiefs have rated equity ahead of both bank borrowing and corporate bond issuance in only one quarter (Q2 2009).
