Royal Bank of Scotland is closing more than 150 branches and axing hundreds of jobs in a move to slash costs as more customers switch to digital banking, reports The Financial Times.
The state-backed lender is to cut back its network to just over 1,000 branches after seeing a “dramatic shift” in customer preferences for mobile and online banking rather than over the counter services.
As part of the closures, some 774 full time jobs will be cut. Of these, about 300 staff will be redeployed elsewhere in the bank.
The measures come after the bank, which is 72 per cent owned by government, reported its ninth consecutive annual loss last month of £7bn.
Ross McEwan, chief executive, unveiled a fresh cost-cutting plan at the time in attempt to steer the bank back to profit next year.
RBS is aiming to make £750m of cost savings this year, of a total £2bn over the next four years to the end of 2020.
Gail Cartmail, acting general secretary of Unite, the union, said: “Banks have a duty to the wider community and that is especially the case for banks like RBS that have large taxpayer-owned shareholdings.”
She added: “It’s time for banking regulators and government to intervene, to force banks to maintain an adequate network that properly serves communities across the UK.”
UK banks have closed a total of 1,000 branches over the past two years as pressure mounts on lenders to reduce costs at a time when margins are being squeezed by record-low interest rates.
A report by consumer group Which? at the end of last year found HSBC had closed the most branches since the start of 2015, shutting 321, followed by RBS, which had removed 191.
RBS said transactions undertaken in branches had plunged 43 per cent since 2010, while online and mobile transactions had increased by more than 400 per cent.
But banks have nevertheless come under fire for closing branches at a rapid rate and doing too little to support elderly and small business customers.
A report by Professor Russel Griggs, a Scottish businessman, last year found that banks could “significantly improve the way closures are communicated” as well as “their engagement with customers and stakeholders”.
High street banks reached an agreement with the previous coalition government that included commitments to carry out impact assessments, give customers notice and help them to find alternatives when they closed branches.
RBS said it was going beyond this deal by giving six months’ closure notice rather than the agreed three-month warning.
RBS said: “We interact with our customers over 20 times more through digital channels than physical ones. We have 4.2 million personal mobile users, up by over two million since 2014.”
It added that the role of the branch was “fast moving to a centre for advice, away from basic transactions”.
The bank is deploying digitally trained staff in remaining branches to help customers use mobile and online services.
RBS is also rolling out 50 “community bankers” across the UK by the end of the year, to serve rural areas in particular, to provide support and advice.