Outlook for financial services

Welcome to the Spring 2013 edition of the Ernst and Young Eurozone Forecast: Outlook for Financial Services.

As recent events in Cyprus have shown, the Eurozone’s economic recovery will follow an uneven trajectory. While some regulatory changes and ECB support have helped bolster confidence and recoveries are underway in some regions, there are still significant challenges on the horizon, and a divided outlook for the strengthening of financial services in Northern states compared to those in the South.

There are encouraging signs that non-performing loans will peak at the end of 2013, that investor risk appetite is growing along with moves away from ‘safe haven’ assets, and that there are opportunities on the horizon for insurers. Despite these signs of life, the Eurozone continues to risk experiencing a ‘lost decade’ of low growth.

What do Eurozone developments mean for your financial services organization and the wider industry? Read our Spring 2013 forecast to find out more, or contact us for in depth insight on the issues affecting your organization.

Outlook for financial services – key highlights Spring 2013

• Continuing low growth ahead for Eurozone financial services
• 2013 will see non-performing loans peak at a euro-era high of 7.2%
• Lending expected to contract by a further 1.7% before growing again in 2014.
• Life insurance premium growth expected to pick up between 2014 and 2017 but still remains at historically low average
• 2017 profits for life insurers are expected to remain 25% below 2008’s peak
• AUMs rose 11.6% in 2012 but further growth is expected to be held back between 2014 and 2016.

Andy Baldwin Head of Financial Services, Europe, Middle East, India and Africa

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