UK financial services sees profits surge

The UK's financial services sector has seen a rise in profits and business volume. Picture: PA

The 100th survey of the sector by the CBI and accountancy firm PwC, published today, shows that business volumes grew at their fastest rate since 2007.

Rising volumes helped push up overall profitability, which bounced back after the previous quarter’s contraction.

Business volumes are predicted to grow strongly again in the next quarter, and the momentum is expected to continuer.

Allan McGrath, financial services partner at PwC in Scotland, said: “As we reach a significant milestone in our survey work with the CBI, it is encouraging to see an increasingly optimistic industry, particularly with regards to growing volumes and revenues.

“Firms appear to be much better equipped to cope with what has been an unrelenting regulatory and compliance agenda, although the twin demands of Solvency II and the increasing Financial Conduct Authority focus remains a concern.

“The industry in Scotland – and the UK – is very much focussed on boosting its core business through customer retention, product and service development, and greater efficiency.

“Investing in systems, IT and digital capabilities is also a priority across all sectors, especially within banking, asset management and insurance sectors.”

The news comes as figures from banking trade body the BBA, released over the weekend, showed that employment in the sector rose last year for the first time since the financial crisis.

Retail banks added about 1,500 jobs in 2013, after shedding more than 32,000 staff between 2008 and 2012 in an ;effort to preserve profitability.