The total fell below the record pounds 16.1bn surplus of 1992 only because foreign-owned banks in London distributed more profits to their parents last year.
Alison Wright, director-general of British Invisibles, said: 'This reflects an increase in their profits that augurs well for London's continued pre-eminence as an international banking centre.'
She said the pounds 2.9bn that accrued to foreign-owned banks did not all leave the country. Some would have been reinvested in Britain.
Net overseas earnings from financial services rose by more than pounds 1bn. The Lloyd's insurance market achieved a turnaround, with a net surplus of pounds 76m, after three years of deficits adding up
to pounds 1.2bn.
Total insurance industry earnings rose from pounds 3.5bn to pounds 4bn, with improved performances by insurance brokers and Lloyd's offsetting a reduction in insurance companies' earnings.
The earnings of securities dealers climbed from pounds 1.5bn in 1992 to pounds 3.5bn, of which pounds 2.4bn were dealing profits.
Commodity traders increased their contribution from pounds 483m to pounds 624m in 1993, thanks in part to a successful year in derivatives markets. Banks' net earnings edged ahead to pounds 5.6bn.
Most types of institution, other than insurance companies, held or improved the income from their investment portfolios.
Banks' investment income enjoyed a particularly dramatic increase, from pounds 1.1bn to pounds 2.2bn, largely because of a continuing trend away from straight loans towards securitised lending and other forms of investment.
British Invisibles said the improvement in portfolio earnings between 1992 and 1993 was helped by the devaluation of sterling in September 1992. Most of the effect following the crisis in the European exchange rate mechanism was felt in 1993.
The City's deficit in direct investment, caused by the payment of pounds 2.9bn of profits and dividends overseas by foreign-owned banks, was the sole reason for the dip in the City's balance of payments surplus below the record of 1992. It followed several years during which foreign banks gave financial support to their London operations.
The financial sector remains the biggest contributor to Britain's balance of payments. The total current account deficit in 1993 was pounds 10.3bn.
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