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Good afternoon, Mr. Almond
It's a pleasure to have you
Thank you so much
It's pleasure to be here
Sir, as you know global economic outlook is an issue that is in everyone's head today
especially, among world leaders, politicians and economists
What's the view of Deloitte on prospects of the global economy's growth
Well, I think the continuing major issue that is holding up the global economy is the credit situation and the lack of credit
it's interesting that is, actually, just how few big corporate failures that have been big companies since the spike in 2008 and 2009
and I think that reflex the fact that the Central Banks and other similar institutions have been pulling out all the stops to prop up the credit markets
which has enabled businesses to continue to operate
but I think there are signs of stress
particularly, in Europe
that availability of credit again is going to continue to be a core thing
particularly, as many of the banks in Europe adjust on the massive pressure
just to get smaller, shredding their balance sheets
which mean they are less able to advance new loans or to renew loans
So, conditions are very tough
The impact for businesses is unless you've got a very strong
growth story can demonstrate robust cash flows to your finances
then cost of finances definitely go up
and it going have to be razor sharp on controlling costs or grabbing every possible opportunity for additional revenues
But on the outside, I would say, there are very good prospects
and certainly our surveys of Chief financial offices
and big companies show that they area quite confident
in their own ability to survive and can seize opportunities for growth
by taking over weaker competitors or filling gaps in the markets that they leave
But to have a support of the banks in that quest they do
have to tick all boxes, so they do have to have a strong balance sheet
compelling growth story, a great track record
and most of all, I would say, a really great leadership teams
really tough conditions, really competitive conditions
But, conditions in which the best competitors cannot only survive, I think
but could actually, thrive and prosper
Mr. Almond, you talked about the lack of credit
but what about the banks themselves
How many bank restructurings you've experienced so far?
Bank restructurings, of course, we know the experience here in Kazakhstan
where the Government had to restructure number of the banks
But, I think, if you look across the world
any big bank will have to do some form of restructuring
in order to compete well in the very low growth markets
that we're going have for a while
The banks for many years have enjoyed before the crisis
very high levels of return on capital employed
partly because the regulators seen to require then to have lower capital requirements
than capital markets required them to have
So the banks were able to invest in whole range of new businesses build a very big portfolio without worrying about return on capital
That's changed completely
So, levels of capital are going up, cost of capital is going up
So, an example of a bank doing its form of restructuring is, actually,
one of the real survivors from the crisis
bank that has continued to prosper is HSBC, everybody knows
The Chief Executive Stuart Gulliver
when he took over announced very stiff targets across group for return on equity
for market standing, for potential, for revenue growth
and any that don't meet those standards have to be sold off for market standing, for potential, for revenue growth
and any that don't meet those standards have to be sold off
any business units are sold off or gone down
a different form of restructuring is a self imposed restructuring
and we see many of our international banking clients doing similar things
that if you don't take it on as a strategic priority
then I think it is unlikely you're going to continue to succeed in as I say very low growth markets for some years to come
Mr. Almond, thank you so much for you time
We really appreciate your comments
Thank you