Two-thirds of the 125 global financial services companies in a new Ernst & Young survey don't expect a return to growth until the first half of 2010.
Half of those respondents said growth would come in the first half of next year; half believed it would be later.
The remaining third of respondents expected growth by the end of 2009. Almost 40% of businesses said their businesses had improved over the last 12 months, compared with almost 50% that had not.
"The financial services industry has certainly been battered," says Diane Sinhuber, Ernst & Young Partner and Financial Services Industry Leader. "But when the recovery phase comes, these companies are likely to emerge stronger, healthier and more focused on risk management than ever before."
Many firms are cutting costs to return to profitability. About 60% said they had more chances to improve cost cutting in the last six months and 40% plan to hive off their non-core or non-performing businesses.
The majority are also looking into their risk management policies following the financial crisis. Seventy per cent of institutions in the survey said they had permanently changed their risk management strategy; 68% have implemented permanent changes to their regulatory framework. More than half said they have changed their operating model.