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Risk appetite at record low among European CFOs, says Deloitte

Nov 15
 
Tags: Deloitte
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Risk appetite at record low among European CFOs...

Risk appetite continues to decline among chief financial officers, with less than one in five respondents (18 per cent) to Deloitte's latest European CFO Survey saying now is a good time to take on risk.

The latest proportion marks a decrease from the previous record low of 20 per cent found in the last study.

This trend has been particularly noticeable in eurozone countries, where less than one in six company finance bosses (16 per cent) are currently keen to accept risk onto their balance sheets.

As far as particular industries are concerned, risk appetite is lowest in those that are heavily reliant on global trade, such as the automotive, industrial and transport sectors.

Other findings showed that more than two-thirds of CFOs across Europe (69 per cent) rate the current level of financial and economic uncertainty as high or very high.

More than a third (36 per cent) felt more pessimistic about their companies' financial prospects than they did three months ago. When Deloitte first conducted the survey in spring 2015, only 18 per cent of respondents felt this way.

National trends showed that a substantial majority (78 per cent) of CFOs in the UK intend to decrease capital spending in the next 12 months. In Belgium, nearly seven out of ten finance leaders (68 per cent) feel confident enough to increase spending.

Various factors have come together to damage the confidence of many CFOs across Europe, including international trade disputes, geopolitical uncertainty and a general slowdown in the global economy.

Ian Stewart, UK chief economist at Deloitte, said: "While European equities have soared, risk appetite in the real economy among CFOs has dropped to a four-year low. Faced with an uncertain outlook, CFOs are shelving investment plans and doubling down on cutting costs."

Other key findings in the research showed that half (51 per cent) of respondents had experienced more pressure from clients and customers for businesses to take action on climate change.

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