View more on these topics

Nuki&#39s Eye

Don&#39t you just love it when the banks get it wrong. For months now, a


swell of popular discontent has been building against the high-street


banks. As I said in this column a month ago, it was only a matter of time


before the tidal wave broke, crushing the bad guys and leaving the rest


gasping for air in its wake.


But despite the riptide of negative publicity, Government review and


political condemnation that preceded it, few, if any, of the pinstripes saw


last week&#39s wall of rage descending on them before it was too late.


At Barclays, I can only assume the public relations people were out to


lunch when they cleared the press notice announcing that 171 branches were


to be closed, affecting many small communities and some 500 dull but


hard-working staff.


Perhaps the press release they had put out only hours before informing us


that Barclays chairman Sir Peter Middleton had quadrupled his pay to £1.76m


last year had gone to their heads.


Or perhaps the fact that the bank had shed 30,000 jobs in the last decade


while boosting its profits last year to a record £2.5bn had con vinced them


that they could do no wrong.


Whatever the thinking, it was a huge mistake. What better example of pure


greed could there be than a bank which makes £2.5bn a year announcing that


it can no longer afford to service pensioners, small businesses and anyone


else for whom a cash machine is no use?


Barclays may have been responsible for bringing the wrath of public


opinion down on the industry but it is not alone in stitching up the most


vulnerable part of its customer base. Lloyds TSB has closed more than 500


branches in the past decade and plans to close hundreds more. Like


Barclays, it too is recording record profits although some branches


allegedly make losses of up to £100,000 a year.


Some reporters predicted at the weekend that as many as 4,000 bank


branches could go in the next five years, slashing the total national


network by up to 50 per cent.


Research by consultant GMAP, which works for Barclays, Lloyds TSB, and


HSBC among others, suggests that each bank could survive with just 800


branches.


Seemingly unconcerned about the potential upset such action might cause,


GMAP happily dubs this a “slash and burn&#39&#39 approach in its marketing


literature.


Others are concerned about the negative publicity such policies have and


are taking pre-emptive action. One bank, for instance, is reported to have


instructed staff to keep customers standing in long queues to deter them


from valuing their local branches.


To say this all adds up to banks having no social conscience is an


understatement. Over the last week, Britain&#39s high-street banks have proved


themselves to be corporate sociopaths.


In Barclays&#39 case, it seems that bank doesn&#39t even care if its customers


know it.


Such arrogance is a big mistake as car industry executives will testify.


We may all need a bank but the choice is growing. Moreover, many account


holders may decide that a new bank designed without branches is better than


one which closes them down.


As you might expect, the banks claim that they have no choice other than


to close branches if they are to survive but perhaps they could be a tad


more inventive. Maybe they could get together and do a deal where at least


one “multi bank” branch was left open in each town.


I suggest they tag this proposal on to the end of their next meeting on


interest rates and other remarkably synchronised charges.

Recommended

Battle is on as Standard action group wins chance of a vote

The gloves are off in thebattle to keep Standard Life mutual followingthe action group&#39s successful req^_uestfor a vote on demutualisation.Standard Life chairman John Trott told 200 members at Tuesday&#39s annualgeneral meeting it had received a “requisition” from the Standard LifeMembers&#39 Action Group on demutualisation which, at first sight, it believesis valid. If valid, a special […]

Consumer confusion &#39shows need for IFAs&#39

IFAs say research proves the need for independent fin^_^_an^_^_cial adviceas the public floun^_ders under a bombardment of pro^_ducts andinformation.An FSA survey suggests that consumers have difficulties understandinginformation and identifying products to meet their needs.The research found that res^_pondents were aware of the need for financialproducts – with one third saying a life event had prompted […]

Endowments appear in their true colours

Millions of borrowers will be receiving a letter from their mortgageendowment provi^_der over the course of the next year providing projectionsof the potential maturity value on their contract.The industry will be using a traffic light system to indicate to borrowershow likely it is that the target will be met.What often seems to be forgotten in […]

Track-seat driver

Barclays Global Investors has introduced the BGI Multinational fund totrack the FTSE Global 100 index, which comprises 100 of the world&#39s leadingcompanies.The panelists agree that the fund fits into the market well. Macfarlanesays: “The fund fits well into the index-tracking stable of funds currentlyoffered by many compan ies. It is better than many of the […]

Choose life…

Sarah Scott  – Marketing Consultant, Royal London  This month sees the return of Renton, Sickboy, Begbie and Spud in the sequel to the film Trainspotting. Just over 20 years later, we return to see exactly how life treated the characters whose lifestyle was less than ideal back in 1996. Did they choose a job, choose […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment