UK financial firms hiring again: Poll - Economic Times

LONDON: Financial firms in Britain, including banks hit in 2011 by the euro zone debt crisis, have started taking on new staff again, confounding forecasts for more lay-offs, according to a new industry survey.

A balance of 19 percent of financial firms reported a rise in headcount in the first three months of the year, the survey by the Confederation of British Industry and accounting and consultancy firm PricewaterhouseCoopers (PWC) showed on Monday.

The percentages reflect the balance of responses, since out of the 95 firms surveyed insurers reported a big increase in headcount for instance, while securities traders and investment managers said it had fallen.

A balance of 20 percent also predicted a rise in employment by the second quarter. The CBI's previous report with PwC had suggested that 18 percent of firms on balance thought thousands more layoffs were in store after a rough end to 2011, when the crisis dragged on financial results.

The findings are equivalent to a small rise in employment numbers of about 5,000 in the first quarter of 2012 and of 9,000 in the second quarter, the CBI's chief economic adviser Ian McCafferty said.

Britain's biggest banks are Barclays, HSBC , and part-nationalised lenders Royal Bank of Scotland

and Lloyds, and about 1.035 million people worked in Britain's financial services at the end of 2011, according to official statistics.

Banks were among the surprise hirers this year, especially as profitability has not grown, hampered by a rise in costs, the survey showed. But their optimism grew sharply, while business volumes rose.

The European Central Bank has funnelled over 1 trillion euros into the financial system since December, helping to stabilise funding fears around banks and encouraging investors to start trading again.

INVESTMENT BANKS STILL SUFFERING

Still, banks that responded to the survey said business volumes were below what they considered to be normal and investment banking divisions were still suffering.

They are engaged in some of the same activities as securities traders, one of the segments in financial services where employment numbers fell, and where they could fall even faster in the next three months as business volumes falter.

Retail divisions were instead driving the hiring at banks, as the business had performed well and the fight for market share was growing, Kevin Burrowes, UK financial services leader at PwC, told reporters.

"As the government seeks to try to provide more competition in the sector the thing that is going to enable banks to retain their customers is high quality of service," he said, adding they were hiring in IT and customer handling roles.

"It's a very different story in investment banking."