Don't 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's 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
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
Seemingly unconcerned about the potential upset such action might cause,
GMAP happily dubs this a “slash and burn'' approach in its marketing
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's high-street banks have proved
themselves to be corporate sociopaths.
In Barclays' case, it seems that bank doesn't even care if its customers
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.