How bosses play down customer numbers to justify branch closures
UNDERHAND tactics used by some of Britain’s biggest banks to justify thousands of branch closures can be revealed today.
A Daily Mail investigation found Lloyds and Royal Bank of Scotland are downplaying how many people use the branches they want to shut.
Both banks, which were bailed out by taxpayers during the financial crisis, routinely publish figures showing that only a tiny number of regular weekly customers still use branches facing the axe.
But they use highly restrictive criteria which class a visitor as ‘regular’ only if they go into a branch as many as 48 weeks per year. It means customers who visit their local branch once a fortnight, or who usually use it weekly but go on holiday several times a year, are left out of the calculations.
Last year, Lloyds and RBS shut 439 outlets between them – around an eighth of their networks – and they are axing at least 519 more this year.
Campaigners last night accused the banks of trying to mask the truth about branches’ importance to justify savage cuts depriving rural communities of vital services.
Lib Dem leader and former business secretary Sir Vince Cable said: ‘These criteria are absurdly restrictive and suggest the banks are very much on a mission to get rid of branches as quickly as possible.
‘Quite apart from the rights and wrongs of closures, it does smack of dishonesty. If you’re a small business you may not go in every week, but you will still need to go in for a serious discussion about a loan.’ When they shut a branch, banks must reveal how many customers rely on it under industry rules. They typically say the branches have only a handful of regular customers and are no longer cost-effective.
But NatWest owner RBS classes a customer as regular only if they have been in for 23 weeks of the past 26.
Lloyds’ criteria are even more restrictive, at 48 weeks out of 52 weeks each year. This means even someone who went in every week apart from Easter, Christmas and a two-week summer holiday may not be classed as regular customers.
These definitions rule out many thousands of people who pop in to a branch only once every couple of weeks – even though a branch closure would severely limit their access to basic services.
It is also thought the figures count only those who make a transaction, meaning anyone who visits a branch for advice or information may not be included.
Labour MP West Streeting, of the Commons Treasury committee, said: ‘I don’t think this tallies with any reasonable judgment of what constitutes a regular customer.
‘Some banks are making arbitrary and frankly ludicrous assessments of what constitutes a regular customer to try and bypass the spirit of the rules. By Lloyds’ and RBS’s standards you would have to be a very, very high-dependency customer to be counted.’
The pair’s approach is far more restrictive than rival Barclays, which classifies someone as a regular customer if they use a branch just three times in a year.
RBS and Lloyds have used the numbers to justify the closure of branches all over the country. In Birmingham, for example, RBS said its NatWest city centre branch had just six regular customers and closed it in February.
The Federation of Small Businesses has repeatedly fought branch closures.
FSB chairman Mike Cherry said: ‘There are thousands of small firms who visit branches less frequently to cash cheques, access credit lines and set up new accounts … a lot of small business owners suddenly need access to in-person support at once – in the event of a widespread online banking glitch, for example. The banks need to recognise the importance of these more infrequent visits.’
Caroline Abrahams, of Age UK, said: ‘The ways some banks classify “regular customers” sets the bar far too high … a local bank may still be really important to you even if you only visit it once or twice a month.’
She added: ‘Further bank branch closures are terrible news for many older customers – particularly those who are offline or live in rural areas.’
Derek French, who ran the Campaign for Community Banking Services until 2016, said: ‘People in the communities affected will question whether the numbers are fair, or if they’re just being used as cover to close down branches which are still popular.’
He added: ‘It strikes people as very unreasonable to say branches are closing due to a lack of business if they themselves have to queue every time they go in.’
A spokesman for Lloyds said it publishes how many customers use a branch on a monthly basis as well as weekly, adding: ‘We use over 100 measures when assessing the impact of a branch closure…We are transparent about the reasons for closing a branch.’
An RBS spokesman said transactions at branches in England
‘Smacks of dishonesty’
and Wales were down 30 per cent since 2014 and that the same period saw a 53 per cent rise in the number of customers using mobile banking. He added: ‘Customers can choose from a range of digital, face-to-face and local options to suit their needs.’
Justin Modray of consumer group Candid Money said: ‘The rush to close bank branches can push customers on to the internet who aren’t comfortable with online banking. They could be vulnerable to fraudsters.’ ÷Have you been affected by bank branch closures? Email banks@dailymail.co.uk
IN normal circumstances, this paper would reluctantly defend the right of businesses to close down loss-making branches.
But there’s nothing normal about the case of giant City banks, bailed out by taxpayers to the tune of billions of pounds when their greed and recklessness brought Britain to its knees, causing a decade of austerity.
Leave aside the dishonest excuses, exposed by the Mail today, put forward by Lloyds and RBS for plans to axe 518 more branches this year, on top of the 439 they closed in 2017.
The truth is those vast bailouts (and RBS is still publicly owned) confer a heavy duty on the banks to give something back to the society they fleeced.
To the City, branch closures may be mere figures on a balance sheet. To countless small businesses, they mean massive inconvenience and hours added to the working day, as staff are forced to travel long distances with cash takings.
That’s not to mention the many account holders driven against their will to resort to internet banking, exposing them to cyberfraud (for which banks increasingly refuse to compensate victims).
These closures are not only a gross betrayal of social responsibility. They also open up a gap in the market, which the Mail urges rival lenders to fill. SLUMPED in an armchair and slurring his words, European Commission president Jean-Claude Juncker instructs the people of Italy to work harder. Try taking that message to the 33 per cent of young Italians who can’t find jobs because their economy has been devastated by the euro.
Indeed, Italy has achieved virtually no growth in the 18 years since it joined the currency – a politically inspired project, designed to bring about ever closer union under Brussels control.
Though the euro has boosted efficient Germany, making its exports cheaper, it has devastated southern Europe by inflating the prices of locally produced goods and services such as tourism.
In Italy, as elsewhere, it has thrown a despairing generation on the scrap-heap, leading to acute social problems and opening up a yawning skills gap. No wonder half the continent is in political turmoil.
Every word Mr Juncker utters makes millions of Europeans more envious of Britain’s resolve to break free.