Cuts in bank jobs 'draw to a close': Survey shows layoffs at lowest level since 1990 but warns of more to come

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The Independent Online
JOB shedding in the financial services sector is 'drawing to a close' after falling to its lowest rate since December 1990, according to a survey by the Confederation of British Industry and Coopers & Lybrand.

However, although business levels have risen strongly, banks, life insurers and general insurance companies still expect to make further job cuts this year.

A division has emerged between fund managers, securities traders and insurance brokers, who are taking people on because of buoyant business levels, and the larger retail companies, including banks, which are still cutting staff.

The downturn in employment is expected to come to a virtual standstill over the second quarter of 1994, according to the latest quarterly financial services survey.

The survey found that overall business volumes increased at the quickest rate for more than four years - apart from the three months to last December - although the pick-up was less than expected.

Profitability was up for all sectors apart from building societies.

The volume of business is still expected to increase more rapidly over the next three months. But expectations are not as optimistic as reported in the last quarterly survey.

Staff in the high street banks have borne the brunt of cost-cutting in recent years and will continue to do so, with more cuts this year from the likes of Barclays and NatWest.

However, the banks are spending more on staff training, according to the survey, and are also investing heavily in new technology.

Business confidence in financial services has risen for the sixth successive quarter.

Banks, venture capitalists and finance houses reported the largest improvements in confidence since January with only general insurers and securities traders indicating falls.

Sudhir Junankar, the CBI's associate director, economic analysis, said: 'This survey shows clearly that financial services are now sharing more fully in Britain's economic recovery. Overall business levels still remain below normal but the position has improved markedly since the second half of last year.'

He said although companies were keeping costs firmly under control 'the survey indicates that the shakeout of jobs in the sector is likely to be drawing to a close. However, we need to be cautious as financial services continue to face strong competitive pressures in the home.'