BANKS’ Brexit worries were a key theme in a quarterly survey of Britain’s financial services sector, published yesterday, even though business sentiment stabilized in the second quarter, ending a near two-year slide, and recruitment picked up.

The survey by the Confederation of British Industry (CBI) and PwC polled 100 firms across the U.K. financial sector found that a third of banks said they were “not so confident” of implementing Brexit plans by March. They were also worried about the status of their cross-border contracts during a transition period to the end of 2020.

A transition deal due to start next March when Britain leaves the European Union has yet to be ratified to give financial firms legal certainty.

The future shape of EU-U.K. trade relations in financial services, Britain’s most important economic sector, has also yet to be agreed. The lack of clarity has prompted banks and insurers operating in Britain to open hubs in the EU.

“Brexit continues to drive uncertainty amongst sector players, from the smaller operators to the market leaders,” said Andrew Kail, head of financial services at PwC.

“Location planning, people movements and client retention remain at the top of the agenda, despite the extra time afforded by the transition period,” Kail said.

Last week, the Bank of England (BOE) dismissed criticism from the European Union’s banking watchdog that lenders’ preparations for a potentially disorderly Brexit were inadequate.

BOE said the EU needed to reciprocate British willingness to legally underpin billions of pounds in cross-border derivatives contracts to avoid market disruption. (SD-Agencies)