Yahoo Finance City upbeat as banks find feet after Brexit vote shock
The UK’s financial services sector will be just fine after Brexit, if the string of surveys published in the days before the Government triggers Article 50 are to be believed.
Accounting giant EY and law firm Herbert Smith Freehills sent out reassuring reports in the days leading up to the UK's official EU exit date on March 29, both suggesting the City will cope well in the aftermath of Brexit despite it being on most banks worry lists.
Economic forecasting group EY Item Club said on Tuesday that even though growth for personal and business lending will slow in the next two years it will bounce back in 2019, with lending to businesses set to climb 6pc between 2016 and 2020 to £430bn.
Total assets in the banking sector will rise 4.2pc from 2016 to £7.3bn during that period, it forecast, while the wealth and asset management sector is predicted to grow despite the slowing economy, with assets under management to climb 12pc to £1.2tr in 2020.
“This is a key time for the UK’s financial services industry, just days from the triggering of Article 50,” said Omar Ali, EY’s UK financial services managing partner. “Brexit and wider geopolitics have injected a level of uncertainty and volatility we have not seen for some years, but the fundamentals of the UK financial services industry remain strong.”
Herbert Smith Freehills sent out an equally upbeat report the day before, having interviewed finance executives at 70 listed corporates during February and March.
The law firm found that 89pc of respondents did not think their spending plans would change as a result of Brexit, with 87pc saying that the banks they use to raise capital have not suggested that treasury products will change as a result of Brexit.
“No banks have turned down business with us – this is probably because of faith that the situation will get sorted out,” one finance executive surveyed said, referencing the concerns European banks currently have around passporting.
