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December 17, 2012

KPMG grows 9% in Europe and 4% in the UK

KPMG Europe increased its fee income by 9% to €4,997m (£4.065m) with the UK firm reporting a 4% increase to €2,154m (£1.774m) in the year to 30 September.

KPMG reported last week that it grew the network globally by 1% in the past fiscal, attributing the somewhat low growth compared to the other Big Four to challenging global economic conditions, especially in the last six months of the fiscal year.

KPMG Europe said that on a like-for-like basis and at constant exchange rates, revenues were up 4% percent to €5,198m and profits for the year reduced by 5% to €861m. UK profits droped 13% to £349m.

Turkey was the fastest growing country for KPMG Europe with 20% revenue increase and in Germany the firm recorded a 6% increase to €1,247m.

KPMG Europe chairman Rolf Nonnenmacher said: "The downturn in Europe has become a long and lingering one and the environment is difficult for companies across sectors. In such times, it is vital that we focus relentlessly on providing our clients with the services they really need, to help them follow their change strategies and achieve sustainable growth. If we continue to do this, we can look to the future with confidence."

Nonnenmacher also said that the current audit market debate taking place in the European Parliament is cause for "major concern"."We are not against change, nor are we interested in special pleading. But EC reforms could end up having the unintended consequence of weakening rather than strengthening standards – the last thing we need at a time when investor sentiment is so volatile. Any reform to the audit regime in Europe must be done with the very greatest of care."

For KPMG Europe audit revenues were flat bringing in €1,886m. Tax revenues increased 2%, transactions and restructuring were up 3%, risk consulting by 16% and management consulting 7%.

KPMG increased its headcount by 8% across Europe.

UKIn the UK KPMG announced in the autumn it is cutting up to 3% of its workforce and 4% growth in the UK bellow the average 8% growth among Bog Four firms in the UK.

As profits dropped 13% most of KPMG UK’s service lines recorded growth apart from tax, which decreased by 3%. .

When interviewed for the International Accounting Bulletin UK survey early this month KPMG UK chief executive Simon Collins said that recovery didn’t come strongly enough in the past fiscal year and "we reluctantly realised towards the end of the year that we are going to have to do something about staffing levels".

"We are a business that hires a lot of people each year, and while letting over 300 people go is always distressing, in terms of the shape and size of our business it doesn’t signal anything internally or externally about our commitment to the market."

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