Swedish CFOs express less favorable views about both the probability of default by counterparties and the lending attitude of financial institutions. However, the deterioration in lending attitude is primarily explained by the expanded sample of the survey (we have now expanded the sample to the 500 largest companies in Sweden), which confirms anecdotal evidence that size of a company matters in determining the willingness of financial institutions to provide loans.
The probability of counterparties’ default
The probability of counterparties’ default is perceived as having increased greatly, where many CFOs have shifted to “average” from “below average”. Looking at the different sectors CB&T and Manufacturing are the most negative, while Construction is the most positive.
A majority of CFOs are still seeing a favorable lending attitude by financial institutions toward their companies. But there is a large shift to an “average” attitude from a “favorable” one, which seems more due to the expanded sample (we have now extended the sample to the 500 largest companies in Sweden) than to a significant change in the lending landscape. Financial Services, TMT and CB&T stand out as the sectors perceiving that they face the most unfavorable attitude.
A large majority of Swedish CFOs see a normal level of uncertainty, which is also true of their Nordic peers who − on a net basis – nevertheless view uncertainty as even lower. CFOs in the Manufacturing, CB&T and Financial Services sectors stand out, since they perceive higher levels of uncertainty than their peers in other sectors.
Taking on risks
Swedish CFOs continue to be defensive in the sense that a majority do not think this is a good time to be taking on greater risk. However, 34% saying yes to taking on more risk is the highest positive response since the spring 2016 survey (38%). Financial Services stands out as the sector that is by far the most reluctant to take on greater risk.