Bank Body Merger To Spur Lobbyist Job Cuts

Dozens of financial services lobbyists could lose their jobs under a reorganisation of the sector's trade bodies to be unveiled on Friday.

Sky News has obtained details of plans to be announced by Ed Richards, the former Ofcom chief executive, who was asked by the UK's biggest lenders earlier this year to streamline the industry's myriad professional associations.

According to a draft of the document, Mr Richards will recommend the "integration" of the British Bankers' Association, the UK Cards Association, Council of Mortgage Lenders and Payments UK.

He will also propose that another body, the Asset Based Finance Association, joins in the future, and call for "enhanced co-ordination" with the Building Societies Association (BSA) and the Finance and Leasing Association.

The review was initiated by the chairs of major lenders including Barclays (LSE: BARC.L - news) , Lloyds Banking Group (Other OTC: LLOBF - news) and Royal Bank of Scotland (LSE: RBS.L - news) amid a growing sense of frustration about the duplication provided - and fees charged - by dozens of organisations.

They believe there is scope to make financial savings and deliver more effective representation of key industry issues by reducing the number of bodies.

However, it has already sparked fierce resistance from some bodies, including the BSA, which wrote to Mr Richards last month to inform him that it did not wish to participate in the project.

"The building society sector is truly distinct from the banking sector, this includes corporate structure, legislative status and in some areas it is subject to additional layers of regulatory guidance," the BSA said.

Mr Richards will tell the industry on Friday that implementation of his plan would be funded by a £15.5m loan, which would cover the costs of an unspecified number of redundancies.

"Once the loan has been repaid members can expect reductions in current fee levels in the order of 30%," he will say.

The proposals may face a significant hurdle in requiring the approval of the members of the various organisations.

The CML's constitution, for example, is structured on a one member, one vote basis, while a number of other trade bodies have expressed doubt about whether the overall plan is viable.

One source said that if it does go ahead, there would be clearly identified and operational subsidiaries for each area currently represented by a standalone body.

The question of leadership is also unresolved, with many senior bank executives sceptical that the job will go to Anthony Browne, the BBA's current chief executive.

Sources say there are also doubts about what the new organisation will be called, with the word 'banking' unlikely to feature.

"Financial Services UK looks like a good bet," the source said.

Sky News revealed in January that a series of class action lawsuits over the Libor rate-rigging scandal had been acting as an impediment to plans for the trade associations merger.

"Issues of pension liabilities and the Libor action against the BBA are not thought to block or constrain the proposed solution, although further formal legal advice on Libor will need to be sought to ensure that the issue is appropriately handled," Mr Richards' paper said.

Friday's announcement will say that a launch of 'NewTA' will be possible by 1 May 2016, with full operational completion by 1 November, provided successful votes by the affected bodies' members by the end of February.