BusinessBusiness RecoveryRecovery hopes in financial services

Recovery hopes in financial services

Joint CBI-PwC study shows banks still on the ropes, but signs of improvement appearing in other areas of financial service sector

Many parts of the UK’s financial services sector expect business volumes to
rise in the next quarter after 21 months of falls, while optimism about the
overall business situation has risen for the first time in two years.

But the banking industry remains under pressure, the joint
CBI/PricewaterhouseCoopers financial services survey warned.

John Hitchins, UK banking leader at PwC said:

‘The UK banking industry has seen a further decline in confidence but the
rate of decline is slowing. While some respondents report an increase in retail
business, a sustained upturn is not yet on the cards.

‘Business plans for the year ahead are largely defensive. The probable impact
of the recession on impairment charges and the impact of new regulation, will
remain a significant pre-occupation for the sector for some time to come.’

The three months to June saw levels of business, income and profitability
continue to fall, but this was at a much slower pace than earlier this year,
suggesting the industry may now be on a gradual path towards recovery.

Insurance companies are the most optimistic about growth in business over the
coming quarter, while banks also expect volumes to rise. Building societies have
experienced extremely tough business conditions since early 2008, but are now
hopeful that volumes, income and profitability will stabilise in the next
quarter.

By contrast, securities traders and investment managers expect the recent
improvement in their business to be short-lived, with volume declines expected
to resume next quarter.

Ian McCafferty, CBI Chief Economic Adviser, said:

‘Having seen business volumes tumble continuously for 21 months, some parts
of the financial services sector look like they may be starting to come through
the worst. The pace of decline in incomes and profitability is slowing, and
business volumes are expected to rise in the next quarter.’

Related Articles

PwC must face MF Global lawsuit over accounting advice

Accounting Firms PwC must face MF Global lawsuit over accounting advice

1y Richard Crump, Writer
PwC’s business recovery services team appoints four new partners

Accounting Firms PwC’s business recovery services team appoints four new partners

1y Richard Crump, Writer
MPs call on FRC to widen BHS audit probe into PwC

Accounting Firms MPs call on FRC to widen BHS audit probe into PwC

1y Richard Crump, Writer
FRC investigation launched into PwC's BHS audit

Audit FRC investigation launched into PwC's BHS audit

1y Kevin Reed, Writer
UK votes to leave EU – accountancy profession reacts

Accounting Firms UK votes to leave EU – accountancy profession reacts

1y Fraser Simpson, Reporter
Take part in our 'Seven days in Accountancy' quiz

Accounting Firms Take part in our 'Seven days in Accountancy' quiz

2y Fraser Simpson, Reporter
New consortium enters fray to buy BHS empire

Accounting Firms New consortium enters fray to buy BHS empire

2y Chris Warmoll, Writer
PwC questioned over BHS ‘going concern’ audit

Accounting Firms PwC questioned over BHS ‘going concern’ audit

2y Chris Warmoll, Writer