The financial services arm will be headed by new hire Laura Chisholm. Chisholm joins as an account director from Cicero and is a former public affairs executive at HBOS and environment desk officer in the shadow cabinet.
Agency boss Charles Lewington said that 'increased regulation, tougher supervision and political intervention' will be necessary at a time when the impact of the global credit crisis is continuing to widen.
He added that there was a gap in the market for consultancies with a specialist understanding of political and regulatory currents flowing from financial services, and the evolving market of sovereign wealth funds and growing power of private equity.
'The UK banking sector was one of the most regulated in Europe before the credit crunch - not that it prevented some risky trading decisions - and it looks like being given yet more hoops to jump through,' said Lewington.
'The Government is acting to increase depositor protection and address weaknesses in the tripartite relationship between the Treasury, Bank of England and the FSA, which itself is employing 150 supervisors to boost supervision of "high impact" companies.'
Chisholm will work alongside Lewington on existing Hanover clients, including Nationwide, HSBC and Mizuho. By the end of the year the agency hopes to expand the department under Chisholm.
'Now more than ever businesses need to work with the Government, MPs and regulators to ensure that the current climate does not result in decisions that damage the industry's competitiveness,' said Chisholm.
Industry watchers told PRWeek that increasing levels of M&A activity are likely to have political ramifications and MPs are expected to demand that the industry finances new debt advisory services.
Meanwhile the Office of Fair Trading continues to launch new investigations into bank charges - even at the height of the aggressive short-selling of UK bank stocks.
As a response to this, some financial agencies have made concerted efforts to gain a foothold within the public affairs sector. In 2005 FD bought LLM to form FD-LLM (PRWeek, 5 August, 2005). Earlier this year it bought Brussels PA shop Blueprint (PRWeek, 21 March).
College Hill has also joined the arena with the purchase of Comminique to work alongside Warwick Smith in the agency's College Public Policy offering (PRWeek, 20 June).
And Lansons, one of the financial services sector's biggest agencies, has had its own public affairs unit since 2005, headed by board director Ralph Jackson and head of public affairs Ben Abbotts.
Some City and Corporate agencies with public affairs arms:
City PR agencies with PA offerings