Stop bank closure call

The 72 per cent taxpayer-owned bank RBS – which benefited from a £45bn bailout after the financial crisis – today (February 24) reported its ninth consecutive year of losses, as it struggles to pay off fines for past misconduct.

Last year’s loss of nearly £7bn brings the bank’s total losses since 2008 to £58bn – far exceeding the £45bn taxpayers fronted to save the bank from collapse. Recent losses include nearly £6bn in conduct and litigation costs.

Of this figure, about £3bn has been put aside to pay off the US department of justice over the bank’s mis-selling of mortgage backed securities which helped precipitate the global financial crisis.

RBS chief executive Ross McEwan has said that in order to fix the bank’s problems, he would oversee a four-year long cost-cutting plan through 2020.

“There will be job losses we have to go through and that will be across the business,” McEwan said.

Unite has argued that such cost-cutting measures will invariably mean sacrifices from the workforce, who played no role in bankers’ past sins but are now yet again being asked to pay for them.

“Workers in finance continue to pay the price for the reckless greed and ambition of the past,” said Unite national officer Rob MacGregor. “Nearly 10 years on, shamed banker Fred Goodwin’s legacy haunts RBS employees and their families.”

‘Stark reminder’

RBS boss McEwan noted that the fines the bank is still paying and which are contributing to its nearly decade-long stint of abysmal performance are a “stark reminder of what happens to a bank when things go wrong and you lose focus on the customer, as this bank did before the financial crisis.”

But Unite has long argued that bank branches are the heart of a customer-centred approach – that RBS has slashed 520 branches since 2014 shows that the bank under McEwan is still far from being focused on the customer.

Between 2010 and 2016, RBS has cut 2,100 branches down to 1,600. It has also broken an explicit promise it made in 2010 to not to close branches that were the last in town. In 2015 alone, RBS left nearly 200 towns without a local branch.

“RBS is chief among its competitors in shutting branches and slashing jobs,” said MacGregor. “Its ruthless approach to pay for the mistakes of the past jeopardises customer service and risks leaving communities and businesses reliant on their local bank branch high and dry.”

Despite RBS haemorrhaging tens of billions of pounds over the years, top earners at the bank continue to rake it in, with 87 bankers taking home more than €1m (£850,000) each in 2016. The top eight earned £11.3m between them, and McEwan last year was paid £3.5m, including a £1m role-based allowance.

Bonuses for staff on the other hand fell by 8 per cent to ÂŁ343m. And despite top bankers earning six figures or more, the average annual salary at the bank is still little more than ÂŁ30,000.

RBS shares – the majority of which are owned by taxpayers – fell by 2 per cent after the latest profit losses were announced today to 244p, a massive drop from the 502p average price that taxpayers paid to bail out the bank.

Slammed

MacGregor slammed the reckless way that RBS is continuing to be run and called for an immediate moratorium on further bank branch closures.

“After nine years of constant flux, taxpayers who still hold the majority of the shares in RBS, along with loyal staff and customers are left wondering when and where it is going to end,” MacGregor said.

“While banking habits have changed, we would urge RBS and the government to pause and reflect on the bank’s current path, which risks cutting too far, by putting a moratorium in place on further branch closures.”

Unite argues there is still a high demand for bank branches despite greater use of online banking.

Last month, UNITElive reported on a new survey which found that although 56 per cent of people used online banking last year, an astounding 44 per cent – which accounts for some 20m people – still did not use it, with many citing a poor broadband connection as a primary reason.

A separate survey by Accenture also found that the number of people using bank branches is actually going up, not down, with 53 per cent of those surveyed saying they visited their bank branch at least once a month this year, up from 47 per cent in 2010.

Perhaps most surprisingly of all, people aged 18 to 21, dubbed ‘Generation Z’ are using bank branches more than any other age group, with one in four using their branch at least once a week.