Bank branch cull

RBS has continued in its relentless drive to decimate its network of bank branches, after it announced this week (May 1) that it would be closing 162 more outlets – resulting in nearly 1,000 job losses.

The bank has said that 109 branches will close in July and August 2018, with the remaining 53 closing in October and November 2018. These branches are being sacrificed after RBS’ failed Williams and Glynn project, which saw the bank waste nearly £2bn in creating an IT system for the spun-off brand that it said would not survive in the end as a standalone bank.

Now, about 60 per cent of the Williams and Glynn branches will be axed in the latest cull, effectively leaving many of the bank brand’s 1.8m personal banking customers and quarter of a million small businesses without a proper bank to go to.

RBS has played down the affect these bank closures would have – noting that all of the closed branches would be within 0.6 to 2.6 miles away from a NatWest or RBS branch. But what the bank failed to mention is that many of these branches offer only counter services where you can only pay and withdraw cash.

People who need full banking services – such as the ability to open an account or the more complex banking needs of a local business – will be left in the lurch. A Unite analysis has found that in 71 of the 162 branches which will now be closing, customers will be forced to make return journeys of 25 miles. In the most extreme cases, customers will find themselves making a round trip of 130 miles just to access full banking services.

“The Williams and Glyn saga rolls on as Royal Bank of Scotland continues with its shambolically poor management of this business,” noted Unite national officer for finance Rob MacGregor. “How does a taxpayer funded institution spend £1.8 billion on a failed IT project and in the next breath demolish the much needed local bank branches?

“Today nearly 1,000 employees have finally been told of their dark futures because the bank has been calamitously managed for too long,” he added. “Ending years of speculation Royal Bank of Scotland has effectively turned its back on the Williams and Glyn customers and staff.”

More branch closures

The latest closures come after RBS announced it would shutter 52 branches in Scotland and another 197 NatWest branches, while ten Scotland branches were granted a ‘stay of execution’ earlier this year after a concerted Unite campaign.

While RBS, which is 71 per cent owned by the government, is a major culprit in the ongoing cull of bank branches across the UK, other big banks are doing the same – in 2017 alone, the big four banks, including HSBC, RBS, Barclays and Lloyds, closed or announced they would close nearly 1,000 bank branches.

The banks have often cited changing consumer preferences and the rise of online banking technology as a reason for closing local branches. But the latest TSB scandal – which saw many of the bank’s customers unable to access online banking for almost a week – tells a different story.

“The TSB computer systems crash last week has demonstrated without question that the banking system needs its branch network more than it ever has,” said MacGregor.

Consequences

Even the Conservatives have acknowledged the impact that bank closures have – on poorer people, the disabled, and small businesses in particular.

In response to this week’s news from RBS, Treasury committee chair and Tory MP Nicky Morgan said that in recent years, “retail banks have made decisions to shrink their branch network on the grounds that more people are banking online. But branches remain vital for many, particularly vulnerable people and those in rural areas.

“As a result of RBS’s decision, there is a risk of increased levels of financial exclusion,” she added. “It’s important for the government to monitor this trend. If financial exclusion is increasing, the government may be required to intervene.”

Research has shown the devastating consequences of branch closures. An analysis by the Office for National Statistics (ONS) found that it is poorer people who suffer most from bank closures – 90 per cent of bank closures in the last year have happened in areas where income is below the national average.

One study by Nottingham University found that when bank branches close, predatory financial institutions such as pay day lenders come in to take their place, doubly hitting lower-income families.

And another analysis found bank branch closures dampen small business lending growth by 63 per cent.

‘Essential’

What’s more, the demand for a local branch still very much persists – in two different surveys asking people the importance of having a local bank branch, about 60 per cent said it was ‘essential’ or ‘very important’, a figure that rose to nearly 70 per cent for small business customers.

Labour’s shadow City minister Jonathan Reynolds highlighted what a future Labour government would do to tackle the issue of bank branch closures.

There would be “mandatory consultation around the closure of bank branches which includes the regulator,” he said. “We cannot abandon communities by leaving them without the basic banking infrastructure they need.”

MacGregor reiterated Unite’s call to RBS management “to not to abandon their responsibilities to the communities across the country who depend on Williams and Glynn banking facilities. These plans cannot be put into motion for the sake of consumers and staff.”