MPS take aim at RBS over lat­est round of clo­sures

Loss of branches leaves vul­ner­a­ble fac­ing ‘fi­nan­cial ex­clu­sion’ and puts peo­ple at risk of fraud, they warn

The Sunday Telegraph - Money & Business - - Business - By Iain Withers

ROYAL Bank of Scot­land is fac­ing a po­lit­i­cal back­lash over plans to slash its branch net­work by nearly half in less than a year.

Nicky Mor­gan, the chair­man of the pow­er­ful Trea­sury se­lect com­mit­tee, told The Sun­day Tele­graph she was con­cerned the lat­est cuts could lead to “fi­nan­cial ex­clu­sion” for vul­ner­a­ble cus­tomers, such as the el­derly or dis­abled.

“They must not be left be­hind,” she said. Ms Mor­gan said she would raise her con­cerns with the Trea­sury to en­sure min­is­ters are “mon­i­tor­ing” the sit­u­a­tion.

Her in­ter­ven­tion comes af­ter the tax­payer-con­trolled lender – bailed out for £45bn at the height of the fi­nan­cial cri­sis – an­nounced a fur­ther 54 branch clo­sures last week.

It was the lat­est of three rapid rounds of cuts since last De­cem­ber, tak­ing the to­tal to 475. RBS had 1,003 branches.

Ms Mor­gan is ex­pected to raise her con­cerns with the Trea­sury by let­ter or in an ev­i­dence ses­sion.

“De­spite the growth of on­line bank­ing, there will re­main a group of cus­tomers who want to use branch ser­vices. Such cus­tomers, who are of­ten par­tic­u­larly vul­ner­a­ble, will ap­pear com­mer­cially less at­trac­tive to serve. But they must not be left be­hind,” Ms Mor­gan said.

The former ed­u­ca­tion sec­re­tary also warned that the rush to re­place phys­i­cal branches with on­line and mo­bile ser­vices made the im­por­tance of IT re­silience “greater than ever”.

Ms Mor­gan has been a vo­cal critic of IT fail­ures at fi­nance firms in re­cent months, in­clud­ing sys­tem out­ages at be­lea­guered bank TSB – where chief ex­ec­u­tive Paul Pester stepped down last week – and pay­ment ser­vices provider Visa.

Kevin Hollinrake, the chair­man of the all-party par­lia­men­tary group on fair busi­ness bank­ing, warned that cus­tomers were ex­posed to a greater risk of fraud on­line. “The move to­wards on­line bank­ing has seen a rise in in­stances of fraud,” he said. “This is hurt­ing fam­i­lies and busi­nesses and must be bet­ter un­der­stood, tack­led, and more read­ily com­pen­sated be­fore we lose brick-and-mor­tar banks.”

Con­sumer and small-busi­ness groups re­acted an­grily to RBS’S lat­est cuts last week. The Fed­er­a­tion of Small Busi­nesses ar­gued it made “a bad sit­u­a­tion worse”.

Gareth Shaw, money ex­pert at con­sumer group Which?, said the clo­sures were “an­other blow to RBS cus­tomers”, adding that across the in­dus­try as a whole 60 branches are clos­ing a month.

RBS said the 54 clo­sures in­volved branches in Eng­land and Wales that had been ear­marked for in­clu­sion in the aborted chal­lenger bank Wil­liams & Glyn. The lender an­nounced plans to close 162 such branches in May.

The bank in­sisted last week the cuts were a “dif­fi­cult de­ci­sion” and com­mit­ted to mak­ing no fur­ther clo­sures un­til at least 2020. Ross Mcewan, the RBS chief ex­ec­u­tive, had pre­vi­ously made this com­mit­ment for Scot­tish branches.

The state­ment added: “Cus­tomers of Royal Bank of Scot­land in Eng­land and Wales will be able to use Natwest branches and local post of­fices for their ev­ery­day bank­ing needs. We will now fo­cus on in­vest­ing in our net­work in Eng­land and Wales to make sure cus­tomers have a con­sis­tent range of prod­ucts and ser­vices.”

Nicky Mor­gan, the Trea­sury se­lect com­mit­tee chair­man, said min­is­ters are ‘mon­i­tor­ing’ the sit­u­a­tion

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