Global volatility slowing financial services growth, shows research
The latest CBI/PwC Financial Services Survey has found that financial services firms experienced slowed growth in business volumes during the three months leading to September.
The rise in overall business volumes was at the slowest pace in two years, coming on the back of almost two years of strong expansion. However, overall optimism about business was stable due to over two and half years of continuous improvement.
Income growth for financial services firms seems to have been affected by an atmosphere of strong competition, which has impacted fees and commissions. Net interest, investment and trading income have also all been subject to the effects.
CBI Director of Economics Rain Newton-Smith said: “The winds of volatility blowing through global markets have left a clear mark on the financial services sector, impacting business volumes and investment intentions, particularly in investment management and securities trading."
“Nevertheless, building societies’ business volumes have rebounded, and with financial sector costs under control, profitability is in good shape. At the same time, investment in IT is set to increase as firms aim to improve efficiency," he added.
UK financial services leader at PwC, Kevin Burrowes commented on the findings of the joint report.
“Business confidence among banks flat-lined in the quarter leading to September 2015, leaving the sector cautious over its short-term outlook. Recent macro-economic events such as the fall in oil prices, China’s Black Monday, and the ongoing turmoil in global stock markets might have fuelled this sentiment. With interest rates expected to remain on hold, growth for UK banks continues to be challenging," he said.