The latest figures published this week in the Survey of Financial Institutions reinforce a trend for stability and sector growth within Jersey’s finance industry, according to Jersey Finance.
Overall total annual net profits generated by the industry in 2013 stood at £1.18bn, a level consistent with figures for the past two years and the fourth best performance in the last 15 years.
The survey highlighted the importance of the banking sector, which represented 79% of all profits for the industry last year, whilst profits generated by the fund management sector grew by 38% compared to 2012 and the trust and company administration sector saw profits increase by 3%. Net profits for the accountancy sector were calculated as £28m, an annual increase of 4% and the highest level since 1998, whilst the legal sector has seen an increase on its profits of more than a fifth since 2009 pre-crisis levels.
The figures also highlight the value of the finance industry to the local economy. Local finance firms spent £710m last year, with more than two-fifths of that (£310m) being spent on local goods and services, equating to almost £800k every single day. The banking sector accounted for around half of all on-island expenditure.
Encouragingly, from an employment point of view, total expenditure on employment grew by 3% last year to around £720m, whilst 310 local school leavers or students were employed by the finance industry in 2013, the largest annual intake since 2008. The survey also found that the number of staff employed in compliance roles increased by 35% in 2013, highlighting the importance firms are attaching to meeting the requirements of a rising tide of regulation. Despite this, the net profit per employee increased slightly on the previous year, suggesting that efficiencies in client service continue to be made.
Geoff Cook, CEO of Jersey Finance commented:
“These results paint a picture of stability and incremental growth in sectors of the industry, particularly within fund management, and re-affirm the trends we have been seeing over the past few months, with our member firms indicating that new business activity overall is picking up. Considering the banking industry globally is still in recovery following the financial downturn, it is encouraging that banking activity and profits in Jersey have stabilised and, with interest rates set to move upwards in the not-too-distant future, a further restoration of bank profitability can be expected.
“Meanwhile, it is also encouraging that Jersey’s finance industry has maintained its workforce and at the same time continued to invest in the local economy. Local student recruitment is at its highest level in six years, tying in with the latest very positive Business Tendency Survey results which indicated optimism in the finance industry about future business prospects, whilst the industry continues to spend approaching £1m per day in the local economy, despite the relentless drive to cut costs in the face of tough competition.”
Category: Finance & Business