Going... and gone: branches on the HSBC closure hitlist

Remember the adverts for the ‘world’s local bank’? Things changed as a key service is wiped out

FOR years, HSBC branded itself as the world’s local bank, perpetuating the belief among customers that it cared passionately about having a presence on the high street. Not any more. The boastful advertising has disappeared – and so has its commitment to ‘local’ communities. The Mail on Sunday has obtained exclusive details of the cuts the bank has made to its branch network this year. They make for grim reading.

According to details confirmed by the bank, HSBC has shut 218 branches so far this year, with another 57 poised to shut by early in the New Year.

It will shrink HSBC’s branch network down to little more than 700. No other bank has shut so many this year. Between them, the Big Four – HSBC, Royal Bank of Scotland, Barclays and Lloyds – have shut more than 500 branches this year.

The HSBC cuts are countrywide, in both rural and urban locations. Even branches in city centres such as Sheffield have been axed. In many cases, a closure has left a town bankless. Swathes of suburban London branches have also been culled. The rash of closures is on an unprecedented scale. HSBC shut 47 branches in 2013. In 2014, 95 were axed and last year 109. The current closure rate is equivalent to four branches being shut every week.

If the bank continues closing branches on a scale similar to this year, it would be branchless by the end of 2019, effectively turning its retail banking operations into a clone of its online bank, First Direct. At best, it would only have branches in major cities and towns.

HSBC is not alone in its cuts. Last year, Royal Bank of Scotland closed 234 and it has just confirmed that another 86 have been put on notice of closure across both the NatWest and Royal Bank of Scotland brands. This is on top of 51 shut this year.

Lloyds, embracing the Bank of Scotland and Halifax brands, has also aggressively shut branches. It will have closed 212 this year and put a further 49 on notice of closure. Barclays has shut 50.

The scaling back of high street banks is, in part, in response to changing banking habits as more customers go online. HSBC says use of branches is down more than 40 per cent over the past five years – with 93 per cent of contact with the bank now made via the telephone, internet or smartphone.

Some 97 per cent of cash withdrawals, it says, are via a cash machine.

Royal Bank of Scotland says branch transactions have fallen 45 per cent over five years. Indeed, in recent letters (see below) to customers of branches doomed for the axe, it implies that it is they – and their failure to use the branch enough – who are to blame for the closures.

Though phone banking has cut the need for many people to use branches, there are still customers who depend on them. These include the elderly and local businesses.

Caroline Abrahams, director of charity Age UK, is disappointed by the marked increase in closures. She says: ‘Older people are often the worst affected when a bank pulls out of a town.

‘Many are not online or live in areas with poor internet and mobile phone service. They also have mobility and transport challenges.’

For customers keen to maintain a face-to-face relationship with their bank, there are alternatives. Metro Bank is committed to opening new branches, though they will be primarily located in the south of England. It now has 48 branches extending as far north as Cambridge, with another in Basingstoke, Hampshire, in the pipeline.

Nationwide, a building society, has 700 branches but is keen to open more, especially in towns where all the banks have pulled out.

Other building societies, including Coventry and Cumberland, provide current accounts, though their branches are not countrywide. The Post Office also offers banking facilities and current accounts through Bank of Ireland, although its services are basic and inadequate for most small businesses.

On Friday, HSBC insisted it was keen to maintain a ‘sustainable network for the future’. It said that customers who might have difficulty accessing an alternative branch when theirs closed would be offered ‘one-to-one appointments to discuss their future banking needs’.

It would also provide ‘training on internet, mobile and telephone banking as well as on debit card use, including cashback’.

If it continues at this rate, the bank will be branchless by late 2019

Older people are often the worst affected when a bank pulls out