{"id":9826,"date":"2020-11-05T13:06:00","date_gmt":"2020-11-05T12:06:00","guid":{"rendered":"https:\/\/frankfurt-main-finance.com\/?p=9826"},"modified":"2020-12-09T14:35:20","modified_gmt":"2020-12-09T13:35:20","slug":"cfs-index-remains-positive","status":"publish","type":"post","link":"https:\/\/frankfurt-main-finance.com\/en\/cfs-index-remains-positive\/","title":{"rendered":"CFS Index remains positive"},"content":{"rendered":"\t\t
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Financial institutions: \nrising earnings and investment growth with slight decline in revenue \ngrowth and continuing job cuts \/ Service providers: strong revenue \ngrowth, rising earnings and investment growth, positive employee numbers<\/h3>\n

<\/span><\/p>\n

The CFS Index, which measures the business climate of the German \nfinancial sector on a quarterly basis, rises by +2.2 points to \n109.1 points for the third quarter of 2020. After the CFS Index fell \nbelow the neutral level of 100 points in the first quarter, as the \nCovid-19 crisis was starting to unfold, it quickly rebounded in the \nsecond quarter. The positive level was reinforced in the third quarter. \nThis development is based on rising earnings and investment growth \nacross the entire financial sector, as well as on tremendous revenue \ngrowth and positive employee numbers among the service providers. \nHowever, the positive trend is tempered by weaker revenue growth and \nongoing job cuts at the financial institutions. In view of the sharp \nrise in Covid\u201119 case numbers, the financial sector already held rather \ncautious expectations at the time of the survey, which was shortly \nbefore the government decision to tighten anti-coronavirus measures in \nGermany.<\/p>\n

\u201cThe financial institutions, whose traditional business \nmodels are already threatened by the sustained low interest rate policy \nand the emergence of digital competitors, are rigorously implementing \ninnovations and structural changes \u2013 with support from the service \nproviders. By doing so, they are also laying the necessary groundwork to\n withstand the further impacts of the coronavirus pandemic,\u201d comments \nProfessor Rainer Klump, Director of the Center for Financial Studies.<\/p><\/blockquote>\n

In spite of the Covid-19 crisis, the future international importance of the Financial Centre Germany<\/strong>\n is viewed with a little more optimism, following two weak quarters. \nWith an increase of +3.9 points, the index value currently stands at \n115.2 points.<\/p>\n

\u201cHesse and the financial centre Frankfurt have so far \nweathered the crisis much better than other European locations. The \npositive development of the CFS Index underlines the effects of the \nextensive aid measures and development loans of the Federal Government \nand Frankfurt\u2019s outstanding position in the European structure,\u201d \nexplains Gerhard Wiesheu, President of Frankfurt Main Finance. \u201cIn \naddition, shortly before the final spurt of the brexit negotiations, I \nam optimistic about Frankfurt\u2019s positioning as the regulatory hub of \nEurope and further impulses.\u201d<\/p><\/blockquote>\n

Third quarter: service providers see tremendous revenue \ngrowth; slight decline in growth among financial institutions \/ Earnings\n and investment volume positive across the financial sector<\/strong><\/h3>\n

As previously expected, the surveyed financial institutions report slightly lower growth in revenues<\/strong>\/business\n volume in the third quarter. The corresponding index value falls \n-3.3 points to 118.6 points. The service providers managed to fulfil \ntheir very optimistic expectations for the third quarter. With an \nincrease of +12.7 points to 113.2 points, the corresponding sub-index is\n slightly above its level from before the onset of the Covid-19 crisis. \nAt the time of the survey, the financial sector expects to maintain this\n level in the fourth quarter.<\/p>\n

The earnings<\/strong> of both groups follow a clearly \npositive trend in the third quarter of 2020. With an increase of \n+6.9 points, the corresponding sub-index for the financial institutions \nreaches a level of 114.8 points, which is 11.3 points higher than one \nyear ago. The service providers report a rise in earnings growth of \n+7.8 points in the third quarter, which brings them back to a positive \ngrowth level of 105.3 points. This increase is higher than previously \nexpected. Even based on indications given ahead of the decision to \ntighten anti-coronavirus measures, financial institutions anticipate a \ndecline in earnings growth in the current quarter, whereas the service \nproviders expect the positive trend to continue at this point.<\/p>\n

The growth in investment volume<\/strong> in product and \nprocess innovations also increased across the financial sector in the \nthird quarter, particularly among the service providers. The \ncorresponding sub-index for the financial institutions climbs \n+1.7 points to 104.5 points. The service providers report a huge gain of\n +9.1 points, almost entirely cancelling out the extreme decline of the \nprevious quarter. Nevertheless, with a value of 103.5 points, the \ncorresponding sub-index is still 10.6 points below its level of one year\n ago. As is the case with earnings, the financial institutions \nanticipate a decline in investment growth in the current quarter at the \ntime the survey is conducted, while the service providers foresee a \nslightly positive development.<\/p>\n

Financial institutions: further staff reductions in the third quarter \/ Service providers: job cuts halted<\/strong><\/h3>\n

Job cuts at the financial institutions, which have been ongoing for \nsome time, turned out to be higher than expected in the third quarter. \nThe employee numbers<\/strong> sub-index falls -5.2 points to \n92.3 points. Nevertheless, it remains 1.9 points above the level of one \nyear ago. After reporting job cuts in the previous quarter, the service \nproviders now see an improvement in their situation. The corresponding \nsub-index rises +6.3 points to 105.3 points and is now only 3.4 points \nbelow its level of this time last year. As for the current quarter, the \nfinancial institutions expect job cuts to ease off. The service \nproviders foresee a decline in recruitment, but are not anticipating job\n cuts. As with the other survey results for the fourth quarter, this \noptimistic assessment was made on the eve of the decision to tighten \nanti-coronavirus measures.<\/p>\n

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The results are based on a quarterly management survey in the German financial sector.<\/strong><\/p>\n

The Center for Financial Studies (CFS)<\/a>\n conducts independent and internationally-oriented research in important\n areas of Financial and Monetary Economics, ranging from Monetary Policy\n and Financial Stability, Household Finance and Retail Banking to \nCorporate Finance and Financial Markets. The CFS is also a contributor \nto policy debates and policy analyses, building upon relevant findings \nin its research areas. In providing a platform for research and policy \nadvice, the CFS relies on its international network among academics, the\n financial industry and central banks in Europe and beyond.<\/p>\n<\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Financial institutions: rising earnings and investment growth with slight decline in revenue growth and continuing job cuts \/ Service providers: strong revenue growth, rising earnings and investment growth, positive employee numbers.<\/p>\n<\/div>","protected":false},"author":7,"featured_media":8628,"comment_status":"closed","ping_status":"open","sticky":false,"template":"template-fullwidth.php","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_members_access_role":[],"_members_access_error":""},"categories":[106],"tags":[308,217,404,451,236],"class_list":["post-9826","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-centre","tag-cfs-index","tag-financial-centre-frankfurt","tag-financial-industry","tag-financial-sector","tag-survey"],"acf":[],"publishpress_future_action":{"enabled":false,"date":"2026-10-14 17:16:30","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"_links":{"self":[{"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/posts\/9826","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/comments?post=9826"}],"version-history":[{"count":0,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/posts\/9826\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/media\/8628"}],"wp:attachment":[{"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/media?parent=9826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/categories?post=9826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/frankfurt-main-finance.com\/en\/wp-json\/wp\/v2\/tags?post=9826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}