Financial companies left behind in upturn
STRESS levels are mounting at financial services firms even as corporates across the board begin to recover, according to the latest monthly City A.M./Begbies Taynor health monitor for the Square Mile.
While companies in Greater London showed a marked improvement in June, with 23 per cent fewer suffering from serious problems, woes continued to pile up in the business district. The number of firms struggling to finance themselves in central London rose eight per cent to 1,886. In the City itself, 1,435 businesses were on the brink of insolvency, an increase of 12 per cent.
Our numbers indicate the nascent recovery is putting strain on the already-stretched balance sheets of lenders, insurers and services outfits. More than 110 financial services companies gave off signs of distress last month, up from 85 in May. Those providing support to the property sector also experienced greater difficulties. Just under 100 corporate estate agents, architects and surveyors found themselves in trouble, up from 92 in May.
Nick Hood of Begbies Traynor, said: “Despite talk of better times for City businesses, it seems they are still suffering the fallout from the financial crisis. As public sector cuts begin to bite later in the year, there seems little prospect of a significant improvement in the financial health of London-based companies.”