PracticeConsultingReport shows dip in business optimism

Report shows dip in business optimism

Costly new online banking ventures and tough competition for e-customers has dampened business optimism at UK banks since March, a joint Confederation of British Industry/PricewaterhouseCoopers survey revealed yesterday.

Bankers confidence over the last three months has been knocked as businessvolume has slowed down to its lowest rate for two years, according to the survey.

High expectations that the sector’s rush online would bring a revenue boom havebeen brought down to earth by a profits slowdown in addition to increased domestic competition.

John Hitchins, senior banking partner at PwC, said: ‘This survey highlights thefact that they are now taking a more realistic view of the future growth inrevenues against the cost of building infrastructure and long-term wait forreturns.’

IT investment and advertising budgets, however, continue to grow as the sectorgets ready to net new customers and boost sales.

In other financial sectors, securities traders reported the sharpest fall in confidence, followed by building societies and insurance brokers.

Fund managers and general insurers reported slight rises in confidence since the March survey. Sudhir Junankar, CBI associate director of economic analysis, said: ‘Firms are becoming increasingly concerned about the level of domestic competition and its likely impact on busines over the coming year.’

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