A recent survey of 2,400 CEOs and other top executives in 52 countries worldwide found that most of the respondents expect revenues to return to pre-pandemic levels this year with profits to follow next year, according to Ernst & Young’s annual Global Capital Confidence Barometer.

And although the Virgin Islands and the Caribbean region will continue to feel the effects of the Covid-19 pandemic, EY partners said the region has the flexibility to adapt and find opportunities in the financial services and tourism sectors.

“The Covid-19 outbreak shook our communities and businesses to their core,” said Keiran Hutchison, EY’s partner for the VI and the surrounding  region, and the accounting firm’s regional strategy and transactions leader. “While risks and uncertainty still remain, it’s promising that the C-suite [of CEOs and other chief executives] has a more optimistic view of the year ahead and is acting proactively and strategically to reframe their future.”

Even as vaccine rollouts tick up in many countries, the survey found that the pandemic and its accompanying restrictions — and their negative effects on economic activity — still remain executives’ primary concern.

And with recovery dependent on how fast vaccines roll out, executives also reported concern that uneven distribution of vaccines in different countries could fragment the global economy.

Just 23 percent of respondents — 82 percent of whom are CEOs, CFOs and other Csuite-level executives — predicted a return to pre-pandemic profit levels this year, though 44 percent expected to achieve those levels in 2022.

As they seek regions for growth, 39 percent named Europe as the region with the most potential for generating new opportunities, followed by Asia-Pacific (30 percent) and the Americas (24 percent).

Regional effects

Those global effects will undoubtedly be felt in the VI and the Caribbean region. But Roy Bailey, VI country partner at EY, said in the press release that the territory’s financial services industry has shown in the past that it has the mindset to adapt.

“As the C-suite looks ahead, leaders have a strong [mergers and acquisitions] appetite and are looking more favourably to the future, with many already positioning their businesses to seize opportunities that will inevitably present themselves,” Mr. Bailey said. “The people and businesses of the British Virgin Islands have demonstrated time [and] again that whilst new challenges will always lie ahead, a committed, resourceful and adaptable mindset will enable them to continue to flourish.”

Even as they seek out new avenues, 86 percent of respondents are also looking at the pandemic as an opportunity to look internally for a strategic review as they try to determine which Covid-induced changes are temporary versus which are permanent, the survey found.

According to Mr. Hutchison, “Notwithstanding the challenges of the last year, the financial services jurisdictions in the Caribbean have all continued to see opportunities in global financial services and whilst the next 12 months will almost certainly see restructuring and capital recycling in the local leisure and hospitality sector, we expect that the mobility of global capital will bring new players and opportunities to all our regional jurisdictions.”

M&A prospects

The survey found that while companies are considering near term mergers and acquisitions, activity in that sector may decrease.

Despite low interest rates, accommodative capital markets and abundant private capital, all of which are favourable conditions for M&As, appetites for such deals, though still strong, has dampened slightly, the survey explained.

Just 49 percent of respondents are considering such deals, versus 56 percent last year.

For companies that do plan mergers, business resilience and digital strategy will be key, the survey found.

As long as lockdowns and border closures remain possibilities and pose challenges in reaching customers, 63 percent of respondents plan to continue to invest money in technology for digital engagement, which may have started out of necessity but is now starting to evolve into strategic vision, according to the report.

Overall, 87 percent of respondents said they believed their companies either overperformed or performed the same as usual during the challenges of 2020, especially in the area of overcoming the challenges many of them faced to digitise in the remote work environment.

They were also pleased with their operational stability and risk response, but less so with workforce management, customer engagement and financial performance, according to the survey.