Uncertainty surrounding the economy, the election and other concerns are keeping some potential borrowers "on the sideline," Beth Mooney, the chairman and chief executive at KeyCorp said Monday.
"If I could characterize what we're hearing from our clients—I've always said they are cautiously optimistic, and I think I would at this point say cautiously optimistic has become just more cautious," Mooney told participants at an investor conference in New York hosted by Barclays.
"One client characterized it: 'There is no real incentive to make a big decision to acquire any leverage, acquire a plant, do something that puts you out on the risk curve. It's easier for right now to hold steady because it just is such an uncertain environment,'" she added.
Specific concerns run the gamut: "The uncertainty around the election, uncertainty around tax policies, our own fiscal cliff that's coming at the end of this year, the events in Europe—make your list," she said.
Mooney said that while the bank anticipates loan growth in the third quarter, thanks to continued strength in commercial and home equity loans, it is likely to be "moderated."
Her comments followed earlier remarks at the conference by M&T Bank's chief financial officer Rene Jones, who said that a recent bank survey of commercial borrowers suggested "they are actually more cautious."
Bank of America CFO Bruce Thompson agreed that demand "is relatively slow," though he said in his presentation that larger banks are in position to capture more corporate business as European banks continue to scale back their lending.
B of A, of course, has been downsizing in mortgages for two years now and is
