Shares in US cash machine manufacturer NCR hit a 52-week low on Wednesday after an analyst downgraded the vendor's stock following concerns that banks in North America are cutting back expenditure on ATM upgrades.
NCR shares closed down $1.23, or 5.6%, at $20.97 on Wednesday, after falling to a new 52-week low of $19.64 earlier in the day, after an analyst at Robert W. Baird downgraded the ATM vendor from "outperform" to "neutral". The stock has traded as high as $29.39 in the past 12 months.
An AP report states that the analyst warned investors that larger US banks, which have more ATMs and greater exposure to the subprime crisis, "will exhibit a greater reduction in capital available for ATM upgrades in the near term".
The note to investors says that although NCR's initiatives to improve margins will "bear fruit in the long run", the majority of margin improvement is expected to occur in 2009 to 2010.
Fears that banks will cut back on technology spending have been growing since the credit crisis in August last year.
The first signs of a possible tail-off emerged in early September, when dealing room vendor Tibco warned of a sudden drop in license sales at the end of its third quarter. This prompted some analysts to suggest that that the ongoing credit crunch may be hitting banks' budgets.
In November UBS analysts downgraded UK banking systems vendor Misys from 'neutral' to 'sell' following concerns that financial firms are reviewing IT budgets. UBS analysts said banks are reviewing all spending programmes closely and forecast a 20% decline in treasury and capital markets licence sales in the first half of 2008.