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London - Britain's financial services firms saw an unexpected fall in profit in the three months to June, after six quarters of strong rises - the result of increased competition and costs, an industry survey showed on Monday.
Profits fell by 5% compared with expectations for a rise of 30%, according to the latest quarterly CBI/PwC financial services survey. Incomes from fees, commissions or premiums fell by 10%, disappointing a previous forecast for rapid growth of 34%.
Kevin Burrowes, PWC's UK financial services leader, said banks and insurers were seeing a growing competitive threat from non-financial services companies and new entrants trying to capitalise on improved economic conditions.
"This suggests that UK financial services will see increasing pricing pressure. There is now a growing willingness to partner with technology firms and emerging rivals," he said.
Burrowes added that regulation would remain a major concern and a key driver of operating costs.
Despite that, firms reported a rise in business activity in the three months to June and optimism for the future continued to pick up across the sector.
Some 37% of financial services firms said they felt more optimistic about their business situation, compared to 9% who were less optimistic.
