Financial services firms most optimistic in 17 years

Optimism in the financial services sector surged in the three months to September as companies reported that they were the most positive about their overall business situation for nearly 17 years.

A survey by the CBI and PwC revealed that employment also grew, but that business volumes had fallen unexpectedly, particularly in the banking sector.

Lower levels of business with industrial and commercial companies and overseas customers were blamed for the fall in business volumes, but volumes with private individuals were stable.

CBI director of economics Stephen Gifford said:  “With optimism rising and jobs and profitability growing, this is an encouraging quarter for the financial services sector, despite a fall in business volumes in banking.

“Firms are expecting positive momentum to carry into the next three months, alongside a strong recovery in business volumes, which will boost profits further.  

“Financial services companies are less worried than they were about a potential lack of demand, but dealing with regulation is increasingly weighing on plans for business expansion.”

PwC UK financial services leader Kevin Burrowes added: “Banks’ optimism is increasingly buoyant despite seeing a slight seasonal blip in commercial and industrial volumes. Activity and profitability are expected to grow as the economy recovers, and investment in new products and infrastructure is increasing.

“Regulation continues to be the sector’s greatest source of uncertainty, particularly as UK macroeconomic concerns start to fall away.”

 

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