VANDALISM, SAY UNIONS – BUT THERE IS NO HOPE OF A U-TURN
TO many of Royal Bank of Scotland’s customers and staff, and to taxpayers who saved it from oblivion nine years ago, it seems like another slap in the face. RBS is to close a further 62 branches across Scotland, a move that prompted many to conclude that – in spite of a recent TV ad campaign in which it claimed to be ‘the Bank for Scotland’ – RBS is the Bank for Nowhere.
Large parts of Scotland will now lack any physical RBS presence, with the Borders and Highlands being particularly hit.
RBS is by no means alone in brutally cutting back its branch network. All UK banks say people are visiting branches less as they switch to the internet. Already this year, two other banking groups – Clydesdale Bank parent CYBG and Lloyds Banking Group – have announced the closures of 75 Scottish branches between them.
It costs a bank substantially less if it can persuade customers to do most of their banking online and using mobile apps than to sustain a branch network dating back to the Victorian era.
But given RBS’s avowed intention of becoming the UK’s number one bank for customer service, trust and advocacy by 2020, shutting down a third of its network in Scotland, with the loss of 158 jobs, seems mightily odd.
The situation seems even worse when you consider that, in its Customer Charter of June 2010, the state-rescued institution made a public commitment to not shutting down any branches if these were ‘the last bank in town’. It reneged on this promise at its AGM in June 2015, saying it was proving impractical.
Visiting a branch may seem old school but it does remain a way of life for many – older people and small businesses in particular.
A report into closures by Professor Russel Griggs has likened losing a local branch to ‘a bereavement’ for some people.
Businesses, especially smaller, cash-intensive businesses such as public houses and independent retailers, are seriously concerned about the practical problems, time and expense associated with having to travel further to get change and to deposit cash or cheques.
They also generally prefer faceto-face meetings with bank staff when seeking business advice about growth and finance.
Andy Willox, Scottish policy convener of the Federation of Small Businesses, said: ‘Ultimately, these changes will make it more difficult to run a business in much of Scotland – including many deprived communities and tourism hotspots.’
Trade union Unite, which represents many of the workers who are spending Christmas in the knowledge they risk losing their jobs next summer, is incredulous and suspects the closures spell the end of UK branch banking.
Regional officer Lyn Turner accused senior RBS figures of ‘filling their boots while they devastate local communities’, saying what they are doing ‘amounts to institutional financial vandalism on a scale which has never been seen in this country ever before. Customer service? Trust? Don’t make me laugh.’
In a memo to members, Unite said: ‘The sheer scale of this latest round of branch closures is savage. How can a UK taxpayer-backed organisation devastate local communities by disenfranchising them of the ability to bank at their local branch?
‘Once again, loyal staff who helped rebuild RBS over the last decade will be rewarded with the prospect of an uncertain future and a bleak Christmas.’
The political reaction has been one of shock and dismay, with politicians from all the major parties calling on the bank to reverse its decision or do whatever it can to mitigate the carnage.
SENIOR politicians, including Secretary of State for Scotland David Mundell and business minister Paul Wheelhouse, want meetings with the Gogarburn-based bank’s top management early next week.
Scottish Conservative finance spokesman Murdo Fraser said: ‘This will hit small communities particularly hard.
‘I’m calling on bank bosses to think again.”
Pete Wishart, Nationalist MP for Perth and North Perthshire, said RBS ‘must reconsider’ its cuts plan.
Western Isles Nationalist MP Angus MacNeil said: ‘I am flabbergasted at the proposed economic vandalism suggested by RBS with these branch closures.
‘They will have to drop Scotland from their name to stop giving false impressions. It is now easier for Dover people to bank in Calais than what they suggest for Castlebay in Barra.’
But experience suggests that RBS is very unlikely to reverse its plan.
The bank’s top management, led by New Zealand-born chief executive Ross McEwan and chairman Sir Howard Davies, have a single goal in mind.
They are desperate to return the bank to profitability by 2018 in the wake of nine years of losses – and are no less keen to see the Government sell its remaining 73 per cent stake so the bank can be returned to private ownership.
The duo were cheered when, in the small print of his recent Budget, Chancellor Philip Hammond declared that RBS is now effectively turned around and that the UK Government wants to restart share sales by April 2019 with a plan to sell £3billion worth of the shares it owns over the next five years.
This implies the sale of a total of £15billion worth of RBS shares by 2022, even though this would entail a nominal loss to taxpayers of more than £26billion. Mr McEwan and Mr Hammond are unlikely to let the complaints of many thousands of unhappy customers in the remoter parts the bank’s empire get in the way of this goal.
They are also unlikely to lose much sleep over it.