Banking and financial services executives have a less than rosy outlook for their industry relative to the economy as a whole, according to a study by tax and advisory firm KPMG [KPMG.UL] released on Wednesday.
Nearly two-thirds of the executives surveyed said a recovery in the banking and financial services industries would lag that of the overall U.S. economy.
Asked to rank the top challenges to their businesses, the executives first chose managing risk and then finding new sources of revenue growth. Regulatory compliance, raising capital and restoring investor confidence tied for third place.
The sour sentiment comes even as the financial services sector has experienced a comeback of sorts.
The S&P Financial Services index is up 10.85 percent since January, outpacing healthcare and industrials, which are up 4.20 percent and 2.08 percent, respectively, and energy, which is down 2.04 percent.
Still, the study found that industry executives were reluctant to applaud the rally.
Seventy percent of respondents expect the job market to remain the same or worsen next year, and improvements in the real estate market and consumer confidence topped the list of triggers for a full recovery.
Though a turnaround in financial services is expected to be slow, 78 percent of the financial heads forecast improvement in 2010 as revenues and profitability improve.
And the worst seems to be over with job cuts, as two-thirds of respondents said they had completed their head count reductions and only 15 percent contemplated further action. (Reporting by Chavon Sutton; editing by Steve Orlofsky)