The rumours on the merger were sparked when a consultation paper was published last month, involving major high street banks, such as Barclays, HSBC and Lloyds Banking Group. The paper noted that numerous financial trade associations in the sector may be duplicating efforts of similar issues, and discussed the possibility of merging trade bodies to make one superior outfit.
“Stakeholders believe trade associations can be more effective, describing a lack of coordination amongst different associations.”
“The research, analysis, and stakeholder interviews conducted to inform this paper suggest that a single trade association with a federated structure could deliver the most impact.”
Commenting on the consultation, the CML said: “Financial services are a vital part of UK economy, and housing and mortgages are vital for British households. We welcome the opportunity to contribute to this review.
“We look forward to sharing our views on promoting the interests of all varieties of mortgage lenders and their customers, as part of a wider debate as to how trade bodies can deliver first class support for financial services firms.”
In response to the review, a BBA spokesman told B&C: “These are interesting proposals. It is important for our members that they get effective representation and value for money from their trade associations. We will respond fully to this consultation in more detail in due course.”
The responses from the consultation led B&C to ask key players in the industry as to whether they believe a merger of two or more trade bodies would be positive change to the financial sector.
Yasin Patel of Mayfair Bridging believes that a merger of financial trade bodies could be advantageous, resulting in fewer fees and less administration work.
"In recent years we have seen significant structural change in the banking industry, however there remains a number of different trade bodies and organisations associated with this industry. Anything which streamlines the number of trade bodies can only be a good thing, as this will lead to a simplifying of administration and a reduction in costs,” added Yasin.
Backing the other corner, Charles Haresnape of Aldermore Bank told B&C that although there are no current merger proposals, he disagrees that streamlining trade bodies together would be more efficient.
“My own view is that this will not be beneficial, as trade bodies often address specific aspects of the industry,” he said.
“I think mergers would increase, not decrease, cost and bureaucracy, as Councils are proposed to oversee various trade bodies.
Charles added that his preference is for trade bodies to be left unaltered, as they all offer different expertise to the sector.
Bob Sturges of Omni Capital reminds that: "Care should be taken when reading too much into rumours of a proposed merger between industry trade bodies” .
“Such rumours have been doing the rounds for a number of years and have come to naught.”
As an “interested” outsider, Omni Capital is not a member of either BBA or CML, however Bob believes that it would be a surprise if a merger was to occur.
However, Bob maintains that as the CML is a respected body, with authoritative data and members which are responsible for important economic activity, a merger with the BBA, at a time where the reputation of the banking industry has plummeted, may not be positive for both associations.
"The BBA represents a sector that even its apologists would admit is 'damaged goods.' The reputation of British banking has rarely been so poor. While some of the criticisms are ill-informed and driven by ulterior motives, many are well-founded and deserved. A merger of the two would not be to the obvious advantage of the CML or its members,” he added.
"That said, to rule out a future merger would be foolish,” Bob admitted. He added that British banking could redeem itself and a merger could present advantages, such as the prospect of cost-saving.
“But before we get too excited,” he said, “I would wait for a definitive statement from the bodies concerned before taking too seriously another 'merger' rumour."
Leave a comment