ACTIVITY in the financial services sector has rebounded strongly, according to a survey today.
The latest CBI/PwC Financial Services Survey reported a robust rise in business volumes and an increase in profits for the three months to March – with profit growth driven mainly by a further widening in spreads and an increase in income from fees, commissions and premiums.
But the pace of growth was slower than expected, partly due to a surprise rise in costs, particularly staff costs, following an unexpected rise in employment.
Financial services companies said they were more optimistic about their overall business situation while business volumes and profits are both expected to grow again in the next quarter. However, regulation and compliance costs are likely to remain a drag on business.
CBI director Matthew Fell said: “This has been a strong quarter for the financial services sector, with robust growth in business volumes, an increase in profitability and upbeat investment intentions.
“Concerns over the lack of availability of professional staff have eased since January and overall employment rose unexpectedly this quarter.
“But recent problems in Cyprus risk re-igniting concerns about eurozone stability. At the same time, regulation and compliance are still likely to be significant drags on business throughout this year.”
