Profit grows in financial services

Profit grows in financial services

Business volumes have improved for a second consecutive quarter, underpinning vigorous growth in profitability, according to the latest CBI/PwC financial services survey which is conducted on a quarterly basis and covers ten sectors of UK financial services.

Volume growth is expected to strengthen further next quarter and profitability is predicted to remain solid. Employment has now been growing steadily for the past two years and is expected to rise further in the coming three months.

Investment intentions for the year ahead are robust across all categories, increasingly driven by a desire to boost efficiency/speed, expand capacity and reach new customers.

Paula Smith, PwC’s UK asset management leader said, “Investment managers have had an impressive three months. Optimism has risen yet again - for the ninth quarter - although for the first time the pace has slowed. And there is reason for this sentiment; business volumes have expanded again, driven by demand from private individuals and financial institutions and incomes from fees, commission and premiums are growing at a remarkable rate. Profitability has rapidly picked up pace, as has employment.”

However, she added that investment managers need to remain aware of possible constraints to their business that might curtail this strong growth. “Demand, regulation and competition will all play a part and need to be given the correct amount of focus. It is good to see that investment managers are reacting to this through investment intentions in order to increase efficiency and to reach new customers.”

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