Profits and optimism across the financial services industry increased in the final quarter of last year, despite a fall in staff numbers and business volumes, a survey out today showed.
The number of people employed across the sector fell more sharply than expected, and almost a third of firms warned a lack of staff would hamper their prospects over the coming year.
Of 94 firms that responded to the survey, conducted for the CBI and accounting firm PwC, 25 per cent reported a rise in volumes, with 30 per cent experiencing a fall. The resulting balance of -5 per cent represented the second consecutive quarterly decline, confounding expectations of a return to “moderate” growth.
However, a third of companies said they expected volumes to start growing again next quarter, and overall optimism rose for the first time since March 2012.
Catrin Thomas, financial services partner at PwC in Scotland, said: “As we kick off 2103, we welcome the banks’ return to optimism and their positive outlook in terms of revenue and profitability, however we must temper [with] caution.
“We have seen similar surges in confidence in the past, only for the industry to be disappointed as they deal with the unrelenting challenge of regulatory reform combined with issues such as skills shortages and growing capital challenges.”
Matthew Fell, director for competitive markets at the CBI, said there were concerns staff shortages would limit investment over the coming year, and headcount – which has shrunk for three consecutive quarters – is predicted to fall again during the next three months.