March, 08, 2010

The prospect of bleak turnover due to the credit freeze in the banking industry has become a source of concern for the boards of some banks and thus their executive management. Bankers are worried that with low income the banks are getting now prospects of robust dividend is ruled out which is the bottom line for all investors. Bank boards and their executive management will be facing hard times with shareholders at this year annual meeting.

According to a top banker who spoke to Vanguard last week “Most banks’ board and management are becoming jittery over shrinking income. When you have overheads to pay for and have to face shareholders at the end of the year, you would be concerned that your bank is not lending because it is through that you make income”, he added“Eventually the boards might be compelled to take the bull by the horn and insist on a change in attitude to lending. Though good credits are few, the fear of poor income performance might force banks to go out there and look for credits.

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