According to UK Financial firms business is coming back to normal two years after the recession. The employers’ organization the CBI and accountants PwC announced that there is a strong business growth for the last three consecutive quarters. About 22% of the financial services firms surveyed said that business activity has increased well more than predicted 15%. This is quite close to the 27-28% range before the recession in September 2007.
After that date a sustained decline in financial services sector was observed; as the sector was first hit by US sub-prime mortgage crises and then by global financial crisis in Sept 2008.
According to a recent survey, the next 30% of the firms expect further business improvement in next three months. However, this new predicted ‘normal’ reflects lower expectations. Mr. Andrew head of PwC said that “Despite of strong round of annual results, banks are increasingly realistic about the challenges ahead. Although they have reported normal business for the first time since the financial crises, yet this new level is much lower than the business activity in 2007, before financial crisis.
The banks have shown weakest business growth levels, despite of increase in profitability due to stronger margins and decline in non-performing loans. The best performers in the last three months are financial firms operating in private sectors particularly related to life assurance and wealth management. However, employment levels in the sector is reported to follow a declining trend, despite of the fact that firms are planning to invest more in office space and IT over the coming year.