Lloyds Banking Group is to slash 25 lawyers from its litigation team as it attempts to streamline its processes in light of increased regulatory scrutiny.

The bank, which has been the subject of legal action over issues ranging from alleged interest rate manipulation to the misselling of payment protection insurance (PPI), is currently conducting a redundancy consultation for those affected.

A Lloyds spokesperson said the principal reasons behind the change were to "introduce a more streamlined and efficient operating model aligned with business needs" and to have a structure to deal with the "challenges" the bank faces now and in the future.

He added: "Lloyds Banking Group is committed to working through these changes with employees in a careful and sensitive way."

All affected employees have been briefed by their line manager, and the bank's recognised unions will continue to be consulted on the redundancies.

Reducing the size of the bank's in-house team may enable external firms to cash in on more litigation work.

The firms on the bank's litigation sub panel include Irwin Mitchell, which hired 39 'field representatives' to its debt collection, litigation and recovery services arm Ascent in September last year. Legal Week understands that cohort of staff came from Lloyds.

However, earlier this year the bank said it planned to hand more specialist work to its core panel of 10 firms.

That main roster includes Linklaters, which advised Clydesdale Bank on a record £20m PPI fine handed down by the Financial Conduct Authority last week, as well as disputes heavyweights Herbert Smith Freehills and Hogan Lovells.