A survey of Wisconsin bankers reveals a gloomy outlook for the first six months of 2009. Wisconsin Bankers Association CEO and executive director Kurt Bauer says lack of demand for business loans indicates a troubling, continued weakness in the state's economy. In addition, 55 percent of bank CEOs report local businesses will be laying off workers, and none report businesses will be hiring. "It's the lowest rating that we've had since we started the survey (in 2004)," said Bauer. "But, there are some reasons for optimism. We are seeing demand for residential loans, both refinancing and new loans, and maybe that's something we can build on."
Still, there just isn't much good news to be gleaned from this survey (PDF) of 139 local Wisconsin bank leaders. "Ninety percent of bank CEOs don't believe that we've hit the bottom," said Bauer. "That indicates that the first six months of 2009 will probably be pretty tough."
While demand for commercial loans is weak, Bauer says banks do have money to lend: the loan-to-deposit ratio for banks in Wisconsin is currently over 112 percent. Low interest rates will spur some economic activity in the first six months, but Bauer says it remains to be seen how much, and whether any of that growth will trickle into business lending.