The survey by the Confederation of British Industry (CBI) and accountancy firm PwC showed investment intentions and optimism firmed, while business volumes grew across all industry sub-sectors for the second consecutive quarter except for life insurance.
Overall profitability continued to grow but at a more moderate pace compared with the previous quarter, accompanied by a steady increase in business confidence.
The research also showed that stronger employment plans suggest firms are ready to spend more and move forward from recent restructuring. Some 45 per cent of financial services companies say they increased employment, while only seven per cent said that it had decreased.
Moreover, firms expect employment to rise even more in the next quarter, with a +46 per cent balance.
Matthew Fell, CBI director for competitive markets, said: Financial services firms are growing steadily and are optimistic about their business situation. The fact that competition is growing as a potential business constraint highlights intensifying activity in the sector.
Its also particularly encouraging to see that investment intentions continue to be positive across the board for the second consecutive quarter, strengthening further in some cases.