The banking sector is defying economic uncertainty with a confident outlook for growth, according to new data from Lloyds Bank.
UK financial institutions are increasing investment to drive growth and long-term transformation, according to Lloyds’ latest Financial Institutions Sentiment survey.
In fact, 55 per cent of institutions expect their business to grow over the next 12 months, the survey has found. This increases to 83 per cent of firms anticipating growth within their own businesses over a five-year period. To support these ambitions, 25 per cent anticipate further expansion within financial services, while 58 per cent expect to maintain their current trajectory, underlining a stable and resilient outlook across the sector.
Having surveyed over 100 senior decision-makers at banks, asset and wealth managers, insurers and financial sponsors, Lloyds found that the financial services sector remains focused on transformation and future competitiveness.
To deliver this growth, institutions are focusing on strategic priorities. The survey shows that 46 per cent of institutions are looking to expand in existing markets, while 42 per cent are investing in emerging technologies such as AI and automation. Meanwhile, over a third (37 per cent) are developing new products and services.
These ambitions are being backed by capital. Thirty-seven per cent of respondents plan to increase capital expenditure in the coming year, with investment channelled into digital transformation (47 per cent), workforce development (46 per cent) and AI applications (37 per cent) – a clear signal of intent to enhance productivity and future-proof operations.
Resilience in financial services
Confidence in the long-term outlook remains resilient, with a majority of institutions expecting growth in the UK economy (58 per cent) and the financial services sector (56 per cent) over the next five years.
“This year’s survey paints a clear picture of a sector that is resilient, ambitious and ready to invest,” explained Lisa Francis, head of institutional coverage at Lloyds. “Despite headwinds, financial institutions are continuing to focus on what matters: delivering for clients, investing in people and embracing new technologies. At Lloyds, we’re seeing this momentum across our customers and investors.
“There is a tangible sense of long-term opportunity, with the UK’s financial sector continuing to be well positioned to support sustainable growth and deliver great benefits for our clients and for the wider economy.”
The survey’s optimism considers the UK’s ongoing relevance as a global financial centre. Sixty per cent of respondents believe the UK will retain its international financial hub status, whilst recognising that continued reform and investment will be essential to sustaining this leadership position in a rapidly evolving global landscape.
