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

Friendly society bond for cautious investors

Scottish Legal Life Assurance Society is offering a second unit-linkedguaranteed investment bond for cautious investors.Scotland&#39s biggest friendly society is offering a “cast-iron” guaranteethat at least the initial capital invested in the bond on the fifthanniversary of the policy will be returned.Minimum investment in the bond is £3,000.Investments of more than £5,000 made bef ore April […]

IFAs miss domain event as addresses go quick

IFAs appear to be failing to embrace the technological revolution, leadingthem to miss out on scooping some of the best internet address namesavailable.Many of the top domain names which would have been ideal for IFA websiteshave fallen into the hands of speculators looking to cash in by sellingthem on.Among the potential addresses already taken are […]

Putting a value on customers

Marketing initiatives have to change. The cost of retaining customers andacquiring new ones has been growing steadily as the proliferation of newmarketing avenues continues.The question how best to attract new business is difficult. If you chooseTV commercials, bear in mind there are soon expected to be nearly 500channels. Press advertising has become more difficult as […]

Surplus to requirements

I am the owner/director of a small company and am in my early 50s.I have had a small self-administered scheme for around 15 years.As a result of some hefty contributions in the early years when businesswas good, it is worth around £500,000, including the company premises andsome loans to my company.However, business has been poor […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment