Confidence among firms in the UK’s financial services sector fell again in the fourth quarter of last year, making 2016 the “gloomiest” year for the sector since the 2008 financial crisis.
That’s according to the latest report by the Confederation of British Industry (CBI) and accountancy group PriceWaterhouseCoopers, which found that 45% of the 103 firms surveyed were less optimistic about the outlook than they were in the previous quarter.
Optimism continues to drop amid mixed picture for UK financial services according to the latest #CBIPwC survey https://t.co/rDCRyBkkVt
— PwC UK (@PwC_UK) January 23, 2017
Only 10% of the firms said they were more optimistic.
While Brexit occupied a large part of that gloominess, wider macroeconomic uncertainty, increased competition and meeting regulatory compliances were also prevalent issues.
The survey shows overall confidence fell for the fourth successive quarter.
It wasn’t all bad news though. Most of those surveyed expect profitability to pick up over the next three months, while the new regulations mean firms are looking to increase their headcounts and invest in IT.
“Ruling out membership of the Single Market has reduced options for maintaining a barrier-free trading relationship between the UK and the EU,” said CBI chief economist Rain Newton-Smith.
She added however: “Businesses will welcome the greater clarity and the ambition to create a more prosperous, open and global Britain, with the freest possible trade between the UK and the EU.”
Sainsbury’s chairman on the naughty step
J Sainsbury plc (LON:SBRY) chairman David Tyler has been given a telling off from his board after it emerged he used some of the firm’s staff and suppliers to help refurbish his country home.
Sainsbury’s sent Tyler a warning letter after an internal investigation concluded there had been “material breaches” of three company policies dating back to 2013.
Tyler – who was paid the best part of £500,000 by the supermarket last year – used a member of the sustainability team to review plans for underfloor heating at his barn conversion in East Sussex.
To make it more embarrassing for the former Logica chairman, he headed up a review into sponsorship deals with the son of Sainsbury’s then chief executive, Justin King, only a year earlier.
King was ultimately found not to have breached any rules.
Paddy Power trumped by Trump
UK bookmaker Paddy Power Betfair plc (LON:PPB) has revealed that it took a £5mln hit from Donald Trump’s election triumph last November.
The FTSE 100 group was so confident that Trump’s Democratic rival Hillary Clinton would win that it paid out early on more than US$1mln worth of bets.
A series of “customer-friendly” losses towards the end of year – including the US election and European football results – led to betting losses totalling £40mln in the final quarter of 2016.
Despite the results, the group – which was created following a £5bn merger between Paddy Power and Betfair last year – said it still expects to meet its earnings target in 2016.
Earlier this month, PPB’s bookie rivals William Hill PLC (LON:WMH) also reported that unfavourable football and horseracing results hit operating profits by £20mln.
And finally…
Sticking with the bookies, you may have seen that Paddy Power was taking bets on the colour of President Trump’s spray tan for his inauguration on Friday.
We paid out on Trump's skin colour being CINNAMON on Friday. We kindly refunded all other selections, because we're good craic that way. pic.twitter.com/39w9Eb6LyY
— Paddy Power (@paddypower) January 23, 2017
Paddy ended up paying out on the 8/1 outsider ‘cinnamon’, although the £5mln hit mentioned above couldn’t have hurt too much as the bookmaker also refunded all losing bets.