Profits and revenue up as finance recovery takes hold

Wednesday 01 July 2015

Good news for the finance industry – profits, revenue and spending all increased last year, showing that Jersey’s economic recovery has begun.

Stats for 2014 showed that the finance sector saw a 25% increase in profits, led by the dominant banking sector which saw profits rise to almost £1.2 billion.

But profits have still not returned to the peak of 2008.

Full statistics for the Island’s economic performance in 2014 won’t be released until the end of September, but this morning’s news will be a welcome sign for the industry and ministers that after six years of shrinkage in the economy, things are starting to turn around.

But it wasn’t all good news – average employment costs were down by 2% and the average annual bonus across the sector was down 14% to £4,900.

This morning’s figures show:

- Industry profits were up 25% to almost £1.5 billion.

- Revenue was up 2% to £2.4 billion.

- Spending on goods and services was up 4% to £740 million.

- Banking accounted for 81% of the total profits across the sector.

The figures have been welcomed by Assistant Chief Minister Philip Ozouf, who has political responsibility for the financial services sector.

He said: "The results of the Survey of Financial Institutions are extremely welcome news and a further strong indication - together with strong growth in overall employment and in earnings - that the economy returned to growth in 2014. 

"The survey backs up the anecdotal information that we have had from financial services industry and signals that we are on the right track. Industry profits growth last year was better than expected and shows very positive signs that the financial services industry is returning to more normal profit levels, despite a number of challenges remaining in the economy. The banking sector, in particular, is now in a strong position for the further restructuring which is to come over the next three to four years as UK banking sector reform is implemented.

"The banking sector showed the biggest increases but this is an industry-wide improvement driven by smaller sectors, such as trust and company administration and fund management as well as large institutions – an increase in activity in trusts and funds provides additional activity for banking. There is real growth in what financial services spends on goods and services in the local economy which is also positive for the non-finance sector.

"The news that the level of growth in employment of school leavers and university returners are at the highest levels since the mid-1990s is also extremely good news, indicating that the sector is now recruiting and training for the future."