Bankers Still In Decline As Financials Generally Better

The financial services sector expect business to get better over the next few months for the first time in two years after falls lasting nearly two years. Optimism has risen for the whole business position for the first time in two years. The CBI Financial Services Survey suggests that despite business continuing to fall it is much slower than previously. It is hoped that the general trend will continue to improve though doubts remain over a uniform recovery across all sectors.

Banks increased their spreads to record proportions but remain in decline after giving support to profitability. Business volumes remain well below normal but are set to increase over the next few months. Building societies recorded decreases in income values and spreads leading to lower profitability. Employment is falling. Business volumes have risen in finance houses but not profitability. There have been further sharp falls in employment but less than the last quarter and it expected to continue.

Both general and life insurance volumes have fallen over the last three months. There is optimism in both sectors as volumes are expected to rise. Insurance brokers and securities traders have both seen increases in profitability but securities traders remain cautious. Insurance brokers expect their increases to continue into the next quarter and employment falls were slowest for over a year. Investment managers have seen little change in the quarter despite predictions of falls and employment actually rose. Anticipated falls in volumes and profitability and expected fall in employment mean the outlook for the next few months is not much different.