British lenders launch joint branches after closure backlash
Reuters
Published Mar 11, 2019 08:37AM ET
British lenders launch joint branches after closure backlash
LONDON (Reuters) - Three of Britain's biggest banks have agreed to open jointly-owned branches offering basic services to businesses, following a public backlash to deep cuts to their own branch networks.
Royal Bank of Scotland (LON:RBS), Lloyds Banking Group (LON:LLOY) and Barclays (LON:BARC) said they would pilot six so-called 'Business Banking Hubs' for their customers across the country.
The hubs will offer extended opening hours but much more limited services - specifically the ability to pay in large volumes of coins, notes and checks and exchange cash - than their regular branches.
Banks have faced criticism over branch closures with the Banking Standards Board saying in November they were damaging small businesses, while campaigners say they disadvantage vulnerable people less able to use online banking services.
A spokesman for NatWest, the biggest unit of RBS, said the joint branches would be staffed during the initial pilot to ensure self-service units were operating correctly, before a final decision is made on the project.
The initiative is unusual as ownership is split three ways and the branches will not carry the brands of any of the three banks. They will be run by cash management vendors G4S (CO:G4S) and Vaultex.
The modest initial roll-out of business hubs is dwarfed by the number of bank branches closed in Britain in recent years, which has prompted widespread criticism of big banks by lawmakers, businesses and consumer groups.
Britain has lost nearly two thirds of its bank and building society branches over 30 years, with the number falling to just over 7,500 last year, down from 20,500 in 1988, according to research by consumer campaign group Which? in November.
The first Business Banking Hub opened on Monday in Birmingham, with further hubs to open in Manchester, Crosby, London, Leicestershire and Bristol in the coming weeks.
"These business banking hubs mark a welcome step forward, and hopefully are a sign of things to come," said Mike Cherry, national chairman of the Federation of Small Businesses.
"While the initial raft are largely being opened in urban locations, we look forward to working with lenders on how such hubs can be set-up in the rural areas that need them most."
Previously major banks tried to plug the gap by offering banking services through Post Office branches or via mobile banking vans.
"We have listened to what our business customers really want from our cash services... we are creating an infrastructure that allows small business owners and entrepreneurs to do what they do best - run their business," said Alison Rose, deputy chief executive of NatWest.
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Written By: Reuters
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