LONDON (Reuters) - Britain's financial services sector took on new staff in the first quarter with more gains expected, a business survey said, signalling that a prolonged period of job losses may be ending.
The survey from the CBI employer's lobby and consultancy PwC said sentiment in banking improved for a second straight quarter and employment grew by 2,000 in the three months to March.
The same number of new jobs is expected in this quarter.
"The banks' return to confidence continues, although the improvement is less marked than in the previous quarter," said Steve Davies, a partner at PwC.
"Business is expected to improve across retail, commercial and financial segments and headcount has begun to grow again," Davies added.
Banks had been laying off thousands of staff as they try to boost profitability hit by tougher bank capital requirements, fines for misconduct and lower trading volumes.
Despite signs that headcount is edging higher, banks are hesitating over investment because of uncertainty over returns, the survey said.
"Regulation and compliance are still likely to be significant drags on business throughout this year," said Matthew Fell, CBI director for competitive markets.
Reporting by Huw Jones; Editing by Elaine Hardcastle