The 2013 Jersey Financial Institutions Survey out this morning shows a return to growth for our fund management and trust sectors up 38% and 4% respectively, on the prior year, with aggregate profits for the industry overall exceeding a billion for the third year in a row.
Banking was slightly down on 2012 but a still turned in a respectable performance with profit of £930m, whilst the total industry contribution of £1,180m was the fourth best performance in the last 15 years.
The highlights were:-
o Banking: £930m
o Trust & company administration: £123m
o Fund management: £34m
o Legal: £66m
o Accountancy: £28m
Whilst good levels of corporate profits are a healthy indicator, what is arguably more important to the general population is employment levels. It is pleasing to note that the number of local staff recruited directly from school and university was 310FTE (full time equivalents); 100 higher than any period since 2009. This ties in with the very positive business tendency survey results which indicate optimism in the finance industry about future business prospects.
Given that Banking accounts for almost four fifths of profits for the industry as a whole and around 60% of bank business is derived from deposits the continuing low interest rates have delayed a return to the peaks of 2008. However, with interest rates set to move upwards, possibly as soon as 2015, a further restoration of bank profitibality can be expected. What is also pleasing is that despite the relentless drive to cut costs in the face of tough competition, the finance industry continues to spend approaching £1m per day in the local Jersey economy.
The CBI/PWC survey released earlier this week demonstrates an equally positive picture in UK Financial Services trends. The survey shows that UK financial services continue to enjoy an improving outlook, with economic growth stimulating confidence, demand and volumes of business.