HALF of all bank branches at risk, says ex-Barclays boss
‘Must live up to responsibilities’
UP to half of all bank branches will close in the next five to ten years in a blow to millions of customers, a senior banker warned yesterday.
Antony Jenkins, ex-boss of Barclays, said 3,500 of the UK’s 7,000 branches are at risk.
He stressed the onslaught of closures in the past decade was happening faster than expected as banks slash costs. Jobs are being axed as more people bank online and office tasks are automated.
His comments come after consumer group Which? revealed banks had closed almost 3,000 branches in the past three years – around 60 every month.
At the same time, free-to-use cash machines are being scrapped across the country. Critics say the closures have left shopkeepers and vulnerable people in towns and villages abandoned. Three years ago, Mr Jenkins warned technological changes in Britain would cause an ‘Uber moment’ – like the shake-up in the cab industry – that would see widespread bank branch closures.
But yesterday he admitted he had underestimated the pace of change. At the moment there are around 7,000 branches operated by the country’s biggest retail banks, including Lloyds, Royal Bank of Scotland, HSBC, Barclays, TSB, Santander, and the Nationwide building society – meaning 3,500 could be at risk.
Mr Jenkins, who ran Barclays from 2012 to 2015, said: ‘I predicted that somewhere between 20 and 50 per cent of the jobs would go away in financial services and about the same number of branches would be closed.
‘I think, actually, I under- estimated on the branch closure side. We’ve already seen something like 25 per cent of branches close between 2011 and 2015.
‘My expectation is that at least another 50 per cent of branches will close over the next five to ten years.’ He said an even greater proportion of jobs could also go in the banking industry, including customer service, middle managers and administrative roles.
He told BBC Radio 4’s Today programme: ‘These things get automated and the jobs will go away. Of course, new jobs may be created, but my expectation is there will be many fewer than the ones that are eliminated.’ Yesterclays day the ‘ Big Four’ banks – Barclays, HSBC, Lloyds and RBS – said they currently operated about 4,500 branches in total across the UK. They have axed nearly 4,000 in the past decade.
RBS, which runs NatWest, has closed around 1,380. The figure for Lloyds is 1,200, HSBC 800 and Bar- nearly 500. But there are growing concerns that shutting branches could trigger a rise in fraud, as customers not used to the internet are forced online where they are easy prey for criminals.
Caroline Abrahams, of Age UK, said: ‘Closing branches cuts costs for the banks, but it’s at best an inconvenience and at worst a serious blow for the millions of older people who are not online or au fait with mobile banking.
‘Older people have the right to make and receive payments in a way that is safe, convenient and affordable and our banks need to live up to their responsibilities.’
UK Finance, which represents banks, insisted that branches were only closed as a last resort.
A spokesman said: ‘Bank branch visits have fallen by a quarter since 2012 with the development of new technology. All major banks offer day-to-day banking services through 11,500 Post Office branches.’
MoST people will never have heard of Halesworth, a small market town deep in the Suffolk countryside that 5,000 people call home.
Better known are the seaside resorts of Aldeburgh and Southwold, and the ports of Lowestoft and Yarmouth.
Halesworth is rarely mentioned in the national news, though the director Danny Boyle (lately of James Bond fame) and writer Richard Curtis (Four Weddings And A Funeral) recently attracted attention when they filmed scenes there for a comedy.
In a previous age, the TV presenter David Frost’s grandfather ran an ironmonger’s shop near the bridge over the River Blyth. The Thirties Labour Party leader George Lansbury, grandfather of actress Angela, also grew up there, in a house on the main street, which is known as Thoroughfare.
Sacrifices
Good things tend to happen slowly in Halesworth. But bad things come in a rush.
In the past 18 months, two of the town’s bank branches have closed. First my wife’s bank, HSBC, shut suddenly, telling her and other account-holders to use a branch 12 miles away in a town she never visits. Then Lloyds followed suit.
Now the last one, Barclays, says it will axe its Thoroughfare branch in November.
This final insult is the worst. Barclays is an institution with strong links to East Anglia, founded by Quaker families in the 19th century when, like today, people were wary of sharks in the City of London. But they did trust country Quakers with their money — for the Society of Friends, to use their real name, were famous for their probity and honesty, as they still are.
That used to be a heritage of which Barclays, now commanding a market value of at least £ 33 billion and employing almost 120,000 staff around the world, was proud.
But looking after shire account-holders is no longer a priority. A wave of branch closures across the country has left thousands of people without a local bank, and thousands of towns and villages no longer have a free cashpoint.
Worse is to come. Yesterday, former Barclays boss Antony Jenkins said banks had underestimated the pace of automation.
‘We’ve seen something like 25 per cent of branches close between 2011 and 2015. My expectation is that at least another 50 per cent of branches will close over the next five to ten years.’
As ever with the banks, it seems profits come first and customer service last.
How different it was in their hour of need during the financial crisis in 2008, when taxpayers were expected to make huge sacrifices to fund bailouts running into tens of billions of pounds.
Look how these thankless banks now repay us.
Barclays and HSBC were not saved from bankruptcy by taxpayers, but Lloyds was, with a £20.3 billion bailout.
The announcement last December that Lloyds would close its Halesworth branch — along with those in Southwold and Bungay — was said by the bank to be due to declining customer numbers.
But Southwold’s then mayor, Matthew Horwood, countered: ‘The Lloyds branch was open three days a week and on each day there were queues. over55s made up 60 per cent of their customers.’
Typically, these closures come at a time when the bosses of Britain’s biggest banks have seven-figure pay packages and record perks.
Jes Staley, the chief executive of Barclays, reportedly earned £3.8 million last year, including £ 2.35 million in salary, a £ 1 million bonus, almost £400,000 towards his pension and £62,000 in benefits. In his spare time, he sails his 90 ft custom-made yacht.
How such opulence contrasts with the lives of the bank’s hard core of pensioner customers. They were told of the closure of the Barclays branch in an odious letter from its regional director.
The decision, she explained, was ‘never an easy one’. The bank blamed ‘an 11 per cent reduction in personal counter transactions in the last two years’. Weasel words, of course, because it seemed an ‘easy’ decision to ignore the wishes of its customers.
Typical of those is Alexander Carr, 73, who runs the Market Place Wine Shop. He fears the closure will ‘kill Halesworth’ because people will begin to stop shopping in town.
Banks, like post offices and local libraries — also being closed at a depressingly fast rate across the country — act as focal points for communities. People meet, chat and plan their lives there.
When they close, community spirit starts to die.
Demand
Ann Green, who runs a second-hand bookshop next to Halesworth’s Angel Hotel, despairs. Most of her sales are for small cash sums. Where is she supposed to deposit her takings at the end of the day?
Barclays says only 217 customers use the branch ‘exclusively for their banking’. So don’t those 217 matter?
So much for the bank’s mission statement that it measures and rewards people ‘ not just on commercial results, but on how they live our values and bring them to life every day’.
Despite mostly banking online, sometimes I use my local branch — and there are always five or six people in front of me, even with three cashiers on duty.
If that doesn’t prove the demand for a fully functioning branch with trained staff, what does?
Across Britain, 300 more bank branches will shut this year, following a record 800 closures last year.
The banks are doing it for one reason only: to boost their profitability in the quickest way, by cutting costs.
Betrayal
But customers are not fools. They don’t like being told to bank online when they know rural areas have notoriously poor internet coverage.
To make matters worse, there are an estimated 5,000 villages and towns without a free cashpoint, and some of the rest are under threat.
Businesses that offer cash facilities are being charged extra council tax, so they are removing the cashpoints. This is especially problematic in the countryside, where cash is still king.
By closing local branches, the banks continue to treat us with contempt.
Why hasn’t anyone explained to these arrogant fools that they should start putting the customer back into their calculations? Because, if we have another banking crisis, the public will rightly refuse to see them bailed out again.
It doesn’t seem so long ago that banks respected their customers and branch managers were held in esteem.
In the 19th century, the Suffolk & Halesworth Bank printed its own banknotes. The well-to-do would tuck an S&H five-guinea note into their hatband as they walked into the Angel for lunch with their bank manager.
The bank was open from 1782 until 1896, when it became part of Barclays. The new partners were H. E. Buxton, C. S. orde, F. E. Babington, A. R. Buxton and G. F. Buxton.
What would Messrs Buxton, orde and Babington think of their successors’ betrayal of their customers?