More Cuts to Take UK Financial Job Losses to 132,000
U.K. banks and other finance firms will shed another 18,000 jobs in the first quarter of 2013 after cutting 25,000 in the last quarter, according to a report by a business lobby group.
The Confederation of Business Industry (CBI) together with audit firm PricewaterhouseCoopers have published the results of a survey of 94 businesses including banks, building societies, insurance companies and trading and investment houses.
The estimates show that 25,000 jobs were shed in the last three months of 2012 and 18,000 more are expected in the next three months. That would bring the total job losses to 132,000 since the fourth quarter of 2008, when the global financial crisis began.
Employment in the sector peaked at 1.1 million in the third quarter of 2008.
"The number of people employed in the financial services sector fell more sharply than expected. This was the third consecutive quarterly decline and headcount is expected to fall strongly again next quarter," the CBI said in a statement.
In the U.S., 380,000 jobs have been lost in the financial industry since the crisis began in 2008, according to data from the Bureau of Labor Statistics.
The banking industry was projected to be worst hit with responses from 15 banks showing that 91 percent thought further job losses would be made in the first quarter of 2013. Compared to 45 percent that had a similar view in the total number of respondents for the whole sector.
However, the data also point towards a definite change in sentiment for the banks. Respondents signaled that optimism had returned to the sector despite income volumes, business volumes and numbers employed all falling in the last three months.
"The banks reported a dramatic return to optimism, with the highest balance of respondents since 2004 feeling more confident than three months ago, reflecting positive forecasts for revenue and profitability," Kevin Burrowes, U.K. financial services leader at PwC, said in the statement.
"Although very welcome, banks made similar forecasts before, only to be disappointed."
In recent months, the new CEO of Barclays, Antony Jenkins, has announced that some parts of the bank will "shrink" under a new cost cutting plan. The Royal Bank of Scotland has also said it will cut 3,800 jobs by the end of 2013. Banks have been retrenching to meet new rules on capital requirements under Basel III and weak performance of their investment banking operations.
(Read More: Why New Basel Rules Won't Make Safer Banks)
"The U.K. banking sector is well capitalized by European standards, but banks now expect the ability to raise finance to be a significant limitation on business during 2013. This implies that their upbeat predictions for growth could be undermined by an inability to commit sufficient capital to lending," Burrowes said.