Financial crisis weighs on executives' minds

NEW YORK (Reuters) - The most serious financial crisis in decades has caused business executives and government officials around the world to rein in expectations for short- and long-term growth and warn that business volatility will be around for some time.

In a series of interviews with Reuters reporters, executives -- from industries as varied as a biotech startup to the biggest global mining company -- spoke of the widening global credit crisis and their many concerns.

Most said they were keeping a close eye on the global banking sector, as a number of governments said they would be willing to take stakes in banks, sending global stock markets soaring on Monday.

Following are excerpts and highlights from interviews with executives on Sunday and Monday:

ABDULKADER THOMAS, CEO OF KUWAIT-BASED SHARIA ADVISORY FIRM SHAPE FINANCIAL

Islamic banks have been barely bruised by the global credit crisis so far, but the worst is yet to come as falling property and commodity prices and slowing economies start to hit the sector.

As the global economy buckles, credit lines tighten and consumer confidence crumbles, Islamic institutions -- which manage an estimated $1 trillion worldwide -- will not escape the pain that is plaguing conventional lenders in the West.

"Islamic banks are heavily exposed to real estate and private equity in many of these markets," Thomas said.

"If these markets are overpriced -- which some of them are -- then Islamic banks could well be particularly exposed." Strict lending requirements, insistence on transparency and requirements that physical assets underpin transactions helped the industry survive the first round of the U.S. subprime mortgage meltdown.

MARCEL KREIS, HEAD OF ASIA-PACIFIC PRIVATE BANKING FOR CREDIT SUISSE

Credit Suisse said the credit crisis has not derailed its plan to expand its private bank in Asia and could boost the number of private bankers by up to 80 percent in three years.

But Kreis told the Reuters Wealth Management Summit in Singapore that revenues and margins could be hit in the near-term as clients move from risky assets and boost cash holdings amid extreme market volatility. Higher-risk investment products offer banks more lucrative fees.

"We have fundamentally no plans to change the strategy that we have elaborated on a number of occasions, which is to grow the footprint here in Asia," Marcel Kreis, head of Asia-Pacific for the Swiss bank, said.

VICTOR AERNI, GLOBAL LEADER FOR WEALTH MANAGEMENT, BOSTON CONSULTING GROUP

Private banks have to work harder to justify their fees to clients as plummeting asset prices hit global wealth for the first time since the bursting of the Internet bubble in early 2000.

Wealth management had been one of the most profitable bank segments prior to the crisis, prompting nontraditional players to expand into this sector.

The segment, which has UBS AG, Citigroup and Merrill Lynch & Co Inc among its key players, has only been partially affected by the crisis and its inflows have shored up some banks from the trouble caused by risky investments.

"The main challenge for private banks is by far to demonstrate they create added value for clients," Aerni said.

PETER FLAVEL, HEAD OF PRIVATE BANKING AT STANDARD CHARTERED

The world's most exclusive banks are seeking a new roster of clients because the financial crisis has written off wealth in many traditional markets, industry executives said.

Private bankers said they are on the hunt for customers they once overlooked as a way to beef up the assets they manage in the period ahead, when sinking markets and slowing economies are expected to dampen wealth creation worldwide.

"There are people that qualify for private banking that are being looked after by the retail banks," Flavel said at the Reuters Wealth Management Summit.

"There is a lack of supply of private banking services," he said, stressing that while it may be harder to find potential clients in a downturn, many investors may well welcome the special attention provided by a private bank.