Ministers Try to Show Unity Before Brexit Negotiations

The two U.K. government ministers who will represent Britain's banking sector in upcoming Brexit negotiations held their first joint meeting with financiers Monday in an effort to show a united front after months of infighting.

The U.K. Treasury and the newly created Department for Exiting the European Union, or Dexeu, butted heads soon after the June vote amid a power grab for influence in the negotiations to quit the European Union, government advisers and bankers have said.

On Monday Chancellor of the Exchequer Philip Hammond and Secretary of State David Davis co-chaired their first round-table discussion on Brexit with executives from the U.K.'s banking, insurance, asset management and market infrastructure sectors. The meeting was attended by the chairs of Barclays PLC, Santander U.K. and top executives from Goldman Sachs Group Inc. and BlackRock Inc., among others.

The effort to mend relations follows complaints by bankers of having to hold multiple meetings with the two departments to discuss the same issues. The U.K. Treasury has said it would represent the finance sector in the negotiations, but Dexeu is in charge of leading the overall talks.

After the vote to leave the EU, tensions initially flared when some bankers said that it was difficult to get Dexeu to understand their position, that the industry needed Brexit to be phased in over several years to give them a chance to reshape their businesses. The U.K. Treasury has been more understanding on this point, they say.

Mr. Davis's position seems to have softened of late. Last week he said the U.K. would consider making payments to the European Union's budget to secure the best-possible trade access to the bloc. That marked a turnabout from earlier when Prime Minister Theresa May suggested the U.K. would prioritize taking control of immigration during negotiations. Meanwhile coordination between the two departments has improved, officials say.

Monday's meeting was held on neutral ground in a skyscraper in central London. Bankers voiced their views on concerns and opportunities for the sector after Brexit, according to a person familiar with the matter. Mr. Davis and Mr. Hammond put out a joint statement saying they recognized the importance of the U.K.'s financial center. "We will work together to ensure it continues as the hub for both Europe and the rest of the world," said the statement.

Keeping the financial sector both happy and in the U.K. has potentially huge ramifications for the country's public finances. The sector accounts for 12% of exports and £ 60 billion of tax revenue each year, the government said.

Banks are already scoping out foreign hubs in the EU to house parts of their business if the U.K. does leave the single market as expected.

Write to Max Colchester at [e-mail]

(END) Dow Jones Newswires

December 05, 2016 11:25 ET (16:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.