There were 42 profit warnings in the first seven months of 2020, 36 of which (86%) cited the impact of the Covid-19 pandemic.

This means a quarter (25%) of UK-listed financial services companies issued profit warnings between January and the end of July this year.

This rise in the number of warnings equates to a 133% year-on-year increase (just 18 profit warnings were recorded between 1 January and 31 July 2019), and already surpasses the total of 29 profit warnings issued by the sector in the whole of 2019.

EY says its analysis shows FTSE banks, finance and credit services and non-life insurance companies are showing the most strain, while asset management and investment banking are more insulated.

Together, 23 companies from this group (47%) issued 27 profit warnings in the first seven months of 2020, which is more than double the total number of profit warnings the group issued in the whole of 2019 (11).

Of these, 21 profit warnings from this year have cited Covid-19 as the reason for a material downgrade in expected profits.

The FTSE investment bank and brokerage sector - including the asset management sub-sector – has fared better, with 15 companies issuing profits warnings, which represents 15% of this sector.

Tom Groom, UK head of financial services strategy and transactions at EY, said: ‘Since the financial crisis, banks, asset managers and insurers have all built up strong reserves and largely entered this period of economic challenge in a position of capital strength, but no sector has been immune, and the uptick in listed financial services firms issuing profit warnings is concerning.

‘As people’s jobs and finances are threatened by the pandemic, it is unsurprising that the banks, finance companies and insurers are seeing a particularly high volume of profit warnings.

‘As financial services firms navigate through the path to economic recovery, it will be vital that boards are ready to take quick and decisive action to reshape their business models and create cost savings where necessary.’