Activity in the UK financial services sector grew in the last three months at the fastest rate since June 2007, with profitability for investment management rising strongly for the fifth consecutive quarter.
According to the latest CBI/PwC Financial Services Survey, the improvement in the investment managers’ profitability was underpinned by ongoing growth in business volumes. The survey results showed that business both in total and with overseas customers was well above normal for the third quarter running.
The industry also hired more as numbers employed rose for the sixth consecutive quarter and the proportion of firms citing an expansion of capacity as a reason for capital spending over the coming year was the highest since June 2007.
The survey included all of the UK financial services sectors and asked how their business volumes fared in the three months to June, 37% of respondents said that volumes rose while 9% said they fell. The resulting balance of +28% is the most positive since June 2007 (+51%), although it fell short of expectations (+63%). A similar pace of growth is expected next quarter, by a balance of +24% of firms.
Overall, business grew across all customer groups, apart from business with financial institutions, where there was a modest decline. The strongest growth was seen in business with overseas customers, with the highest balance of firms since September 1999 describing this level of business as above normal. The value of fee, commission and premium income rose only slightly in the past three months, while the value of income from net interest, investment and trading was broadly flat. While the former is expected to pick up in the coming three months, the latter is expected to fall.
©2010 funds europe
