Edinburgh 'will continue to attract financial jobs and investment'

Published on Wednesday 20 January 2010 20:49

EDINBURGH is likely to benefit from further consolidation in the UK financial services sector over the next few years, a senior figure at Scotland's biggest asset servicing firm said yesterday.

Allaying fears that the city's financial services sector is now past its heyday, Steve Smit, a senior director at US giant State Street, said Edinburgh's low cost base and well-educated, numerate workforce are likely to attract more jobs and investment over the next few years as the market as a whole undergoes further change.

Smit's comments to the Scottish Parliament's banking inquiry will add to a growing optimism in recent weeks that Scotland will continue to be a tour de force in financial services despite the damage to HBOS and Royal Bank of Scotland during the banking crisis.

Smit said international firms such as his own are likely to see opportunities for growth in Scotland over the next few years as the UK and global financial services markets experience further, inevitable consolidation.

Boston-headquartered State Street already employs 750 people in Edinburgh, rendering it Scotland's biggest asset servicing firm.

Smit told the parliament's economy committee: "We would expect further consolidation in the financial sector, across all sectors: asset servicing, asset management, banking and finance. We intend to be part of that consolidation and that would present us with the opportunity to substantially grow our operations in Edinburgh."

Asked if he thought Edinburgh's reputation had been tarnished by the banking crisis, Smit said: "The crisis was global in nature. It impacted financial centres across the globe. While certain institutions that are based here suffered definite impacts, I would not say the reputation has been tarnished any more or worse than other financial centres around the world."

Smit's comments come a week after Standard Life's new chief executive David Nish revealed that the life and pensions firm had recently taken on its biggest investment project for at least five years.

A spokeswoman for Scottish Financial Enterprise yesterday agreed that there is cause for optimism about the future of financial services in Scotland despite the recent problems.

She said: "While there is still restructuring and consolidation ahead, we definitely see more positive signs in the industry now than we did a year ago."