Lionel Laurent is a Bloomberg Gadfly columnist covering finance and markets. He previously worked at Reuters and Forbes.

Happy Christmas -- if you haven't already been moved to Frankfurt.

That will be the message in this year's Christmas card from the British Bankers' Association, at least judging by the latest threats from the lobby group's CEO.

After the Brexit vote, bankers's fingers are "quivering" over the relocate button, Anthony Browne wrote in the Observer newspaper on Sunday. "Many smaller banks" plan to start moving operations before Christmas, the bigger ones probably in the first quarter of 2017. 

This is it. Really. Last warning. It's worth taking these kind of hyperbolic statements with a double pinch of salt. They've been threatened before and there are obvious downsides in moving material amounts of staff or business abroad too hastily.

Even financiers publicly planning a move, like wealth manager Alban de Clermont-Tonnerre -- who told Le Monde he had his packing boxes ready -- are at least waiting until 2017 or the triggering of official exit talks to make a final decision.

But set aside the headache of Brexit. We should accept that there will be fewer bankers in London -- but for reasons of profitability, not politics. Lenders are reducing headcount because much of the business isn't profitable in the era of low interest rates and increased capital requirements.

Slow Growing
EMEA revenues by institution
Source: Bloomberg Intelligence

Citigroup has cut enough staff in the U.K. capital that it may sub-lease office part of its London skyscraper to Her Majesty's Revenue & Customs, according to my Bloomberg News colleague Jack Sidders. The tax collector will surely find business less brisk with fewer bankers around.

That chimes with news back in March -- long before the Brexit vote -- that Barclays was also looking at doing the exact same thing. And Credit Suisse is another bank that flagged moves from London to Dublin, well before the terms "hard" or "soft" Brexit were coined.

These are the result of structural changes in the industry. Brexit is turning out to be a convenient fig-leaf for the kind of necessary cost cuts that are already underway.

The profitability of banks today is a more tangible problem for management than the shape of the European single market in 2019 (or 2022).

Keep Cutting
Investment banking return on equity (ROE) shows persistent pressure to cut costs
Source: Bloomberg Intelligence

Investment banks' return on equity has shrunk to less than 9 percent in 2015 from about 12 percent in 2010. Top U.S. banks' European businesses have not always performed well. Cutting or moving U.K. staff tactically for cost reasons makes total sense. It's surely what shareholders like to see.

This also explains why banks have started to float more realistic goals than a grand Brexit bargain. The BBA is also pushing for a tax cut, asking the government to phase out an 8 percent corporation tax surcharge as part of what it calls a "normalization" of banks' tax burden.

This is slightly reminiscent of previous stand-offs between banks and government in Britain: earlier this year, HSBC decided to keep its headquarters in London after winning a cut in a U.K. bank levy that was hurting their business.

Will the lobbying work? Banks have so far had trouble getting their doom-laden message heard by Prime Minister Theresa May, largely because the U.K. economy has by and large held up since the vote.

But with the pound knocked off its perch and growing turmoil about what shape Brexit actually takes, the industry clearly hopes that will change. Just don't expect the cost cuts to stop.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Lionel Laurent in London at

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