Financial services sector booms as recovery takes hold - CBI
The financial services sector reported a surge in business in the last quarter, an industry survey showed on Thursday, as the economic recovery gathered pace.
According to the latest CBI/PwC financial services survey, business volumes grew at their fastest rate since June 2017 over the three months to June, a net balance of 40% of respondents said, compared to -3% in the first quarter.
Profitability grew at the fastest pace since December 2015, meanwhile, reaching 39% from 8%, while employment rose for the first time since December 2019, improving to 7% from -12%. The only sub-sector not to see either unchanged or rising employment was banking.
Optimism for the comings months remained positive across the sector at 41%, although that was down on March’s reading of 52%.
Rain Newton-Smith, chief executive at the Confederation of British Industry, said: “Growing business volumes across the sector is good news, especially when combined with rising profitability and employment.
“Meanwhile, regulation remains the main driver of disruption. This is sparking positive shifts in operating models, notably through greater tech adoption. However, firms are continuing to the adapt to the absence of an equivalence agreement between the UK and European Union.”
Isabelle Jenkins, head of financial services at PwC UK, said: “Today’s results point to the slightly stronger economic outlook we’ve been seeing, which can only be good news as the recovery continues.”
The quarterly survey also asked respondents Covid-specific questions. More than eight in ten financial services firms said there were planning to implement more hybrid ways of working; nearly eight in ten said they had conducted employee consultations of preferred ways of working.
The survey noted: “On balance, firms expect collaboration and informal engagement with colleagues to be best achieved in the office in the future, with administrative/business-as-usual tasks best delivered via working from home.”
Investment is set to be cut back on land and buildings – with a balance of -38% – over the year ahead. In contrast, expectations for IT spending are at their strongest for nearly two years, rising to 56% from 40% in March.
The survey of 118 respondents was conducted between 1 and 18 June.