March 30 (Bloomberg) -- U.K. financial-services companies, may cut as many as 15,000 jobs, 1.4 percent of the industry’s workforce, in the second quarter as business confidence declines further, the Confederation of British Industry said.

“Sharp drops in revenues and profitability are causing continued suffering, while business volumes remain very weak,” Ian McCafferty, CBI chief economic adviser, said in a report based on a quarterly survey of financial companies. “Firms are making heavy cuts to staff numbers and investment plans to make savings and reflect weak demand.”

Revenue continued to “fall sharply” in the first three months of the year as companies cut costs. HSBC Holdings Plc, the U.K.’s biggest bank, last week said it will fire about 1,200 workers in the U.K. after the economy contracted more than initially estimated in the fourth quarter. About 1.05 million people work in the U.K. financial services industry, according to the confederation.

About 34 percent of companies surveyed said they were less optimistic about the financial services industry than they were in December, the CBI said.

Banks cut jobs at a record rate in the three months through early March, helping to reduce costs at the fastest rate since 1993, the CBI said. Banks expect revenues to halt their decline in the next three months, the survey showed.

“There is cautious hope for stabilization in the coming quarter,” said Andrew Gray, U.K. banking adviser at PricewaterhouseCoopers LLP, which conducted the survey with the CBI. “With a continued squeeze on margins, as well as ongoing pressure from non-performing loans, overall profitability has been at a historically low level.”

The CBI surveyed 90 financial-services companies, including banks, building societies, insurers, brokers and fund managers from Feb. 18 to March 4. The CBI represents about 240,000 companies that employ one-third of the private sector workforce.

To contact the reporter on this story: Jon Menon in London at jmenon1@bloomberg.net

Last Updated: March 29, 2009 19:01 EDT