Optimism in the financial services sector has stabilised in the three months to March. This was according to the latest CBI/PwC Financial Services Survey published on Monday.

According to the quarterly survey report seen by IBTimes UK, 33% of the 98 firms surveyed said they were more optimistic about the overall business situation compared with three months ago. Meanwhile, 29% were less optimistic, giving a net balance of +4%.

The report said this was a stark improvement over the -35% optimism reading seen in the quarter to December. This improvement in sentiment, which had deteriorated throughout 2016, the report said was amid the broadly resilient economy.

That said, sentiment was seen to vary across sectors. While it was unchanged in the banking sector, there was an improvement in optimism among building societies, life insurers, insurance brokers and investment managers when compared to the previous quarter. In contrast, finance houses and general insurers were seen to be less optimistic.

The report also threw light on business volumes and profits. Both of them were reported to have seen an uptick in the first quarter of 2017.

Business volumes, in particular, were said to have expanded at a faster pace than expected in the previous survey. While 34% of the firms said that volumes were up in the quarter, 17% said they were down, giving a net balance of +18%. This was a stark improvement over the +2% seen in December. Sector-wise, building societies and investment managers were seen to have reported a solid expansion of activity.

Going forward, business volumes was expected to grow but at a slower pace in the quarter to June. While 23% of firms said they expect volumes to rise next quarter, 14% expected it to fall, giving a net balance of +9%.

With regards to employment, the survey showed an uptick in the same in the three months to March. While 30% of the firms said they had increased employment, 19% said that had decreased it, giving a balance of +11%. The report further showed employment numbers were expected to see a more solid growth next quarter.

The report also showed how these firms would invest over the next 12 months. It showed that while firms spending on IT were expected to continue to rise at a healthy pace, other forms of capital spending by them was expected to be cut back slightly.

Commenting on the overall report, Rain Newton-Smith, CBI Chief Economist, said: "It's great that financial services firms have begun the year with a spring in their step – notwithstanding Brexit uncertainty – with volumes expanding at a robust pace, profitability improving and hiring on the up."

"Underlying business in the sector is holding up well, and optimism about global markets, along with stronger global growth, is having a positive knock-on effect. However, whilst demand in the wider UK economy has proven resilient, growth is likely to slow as the year goes on, amid broader uncertainty and higher inflation."