Is Midland Bank set for a return to the High St?
But 8,000 staff are to be axed as branches are shut to cut costs HSBC considers resurrecting name to boost retail business
SIXTEEN years after it disappeared from Britain’s high streets, the Midland Bank could soon be opening its doors again.
HSBC is considering resurrecting the former household name as it plans to axe 8,000 of its British staff – a sixth of the workforce – and close branches to cut costs and boost profits.
Chief executive Stuart Gulliver said he would consult customers on the name for the bank’s retail operation, leaving HSBC as the term for its investment arm.
The rejig would also mean that the HSBC brand would cease to be a presence on the high street.
HSBC took over Midland Bank in 1992 and rebranded all the branches in 1999.
Midland, which called itself ‘The listening bank’, was founded in Birmingham in 1836. Speculation that it could be reborn grew after HSBC said that by 2019 it would move the HQ for its branches from London to Birmingham.
Yesterday, Andrew Mitchell, the Tory MP for Sutton Coldfield, said: ‘Birmingham looks forward very much to hosting HSBC. Given its history with Midland Bank, revert- ing to that name would bring back memories of a successful operation and a respected old name.’
Another option would be for the branches to be brought under the banner of First Direct – the name of HSBC’s online bank, although this is thought to be less likely.
Dozens of its 1,057 UK branches are expected to close in the revamp. HSBC said it would lose up to 8,000 staff over two and a half years through ‘ natural attrition’ rather than redundancies, meaning workers who leave will not be replaced.
Dominic Hook, of the Unite union, told BBC Radio 4’s Today programme: ‘It’s really sad that all our members – all the hard work they’ve done to try to get the bank back working properly after all the scandals of the last few years – are going to be paying with their jobs.’
HSBC – Europe’s largest bank – has been hit hard by low interest rates, a slowdown in Asian markets and the tougher regulations imposed after the financial crisis.
But it has also faced a string of scandals, including a £1.2billion US fine for laundering money for Mexican drugs gangs, a £216million penalty for rigging foreign exchange markets and a criminal investigation over allegations that its private Swiss bank routinely helped wealthy clients dodge taxes.
The renaming of HSBC’s retail arm is the result of tough rules forcing banks to ringfence their high street operations from their investment arms, which were nicknamed ‘casino banks’ because of the risky deals they made.
The regulations are designed to protect savers and break up the banks so they can fail without the taxpayer having to bail them out.
HSBC is expected to sell off its retail operation once it has been rebranded and focus its efforts on Asia, where it made 78 per cent of its £12billion profits last year.
It has already threatened to relocate its headquarters overseas from London in protest at the stricter controls, which it said were expensive and bureaucratic.
Yesterday the lender said it would make an decision on its future by the end of the year. But experts suggested the timing of the announcement was designed to put pressure on the Chancellor as he prepares to deliver his annual Mansion House speech tonight on the state of the economy.
David Buik, from the broker Panmure Gordon, said: ‘This timing is no coincidence. Stuart Gulliver is giving George Osborne a rap on the knuckles – he’s effectively saying stop banker bashing.’
City – Page 60
‘Stop banker bashing’