LONDON: Britain’s financial services firms saw an unexpected fall in profit in the three months to June, after six quarters of strong rises — the result of increased competition and costs, an industry survey showed yesterday.
Profits fell by 5 percent compared with expectations for a rise of 30 percent, according to the latest quarterly CBI/PwC financial services survey.
Incomes from fees, commissions or premiums fell by 10 percent, disappointing a previous forecast for rapid growth of 34 percent.
Kevin Burrowes, PWC’s UK financial services leader, said banks and insurers were seeing a growing competitive threat from non-financial services companies and new entrants trying to capitalise on improved economic conditions.
“This suggests that UK financial services will see increasing pricing pressure. There is now a growing willingness to partner with technology firms and emerging rivals,” he said.
Burrowes added that regulation would remain a major concern and a key driver of operating costs.
Despite that, firms reported a rise in business activity in the three months to June and optimism for the future continued to pick up across the sector.
Some 37 percent of financial services firms said they felt more optimistic about their business situation, compared to 9 percent who were less optimistic.
Reuters
