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Bank branch closures in the spotlight as profits soar

As two of the biggest banking groups in the UK report soaring profits, FSB Chairman Mike Cherry has urged Lloyds and Royal Bank of Scotland not to reduce the number of bank branches throughout the UK.

As Royal Bank of Scotland (RBS)’s profits soared to £1.2 billion in Q1 2018, FSB National Chairman Mike Cherry, said: “With RBS’ finances improving, it’s disappointing to see the majority taxpayer-owned bank continuing to reduce in-person support for the public. Local businesses rely on local bank branches, as do their customers.  

“The 180 branch closures that RBS has planned will hurt high streets and particularly affect vulnerable consumers. When a bank branch closes it makes accessing cash that much harder. Less cash flow in a local economy means less growth. 

“The services which RBS is offering businesses facing branch closures are falling way short of the mark. While an expansion of mobile bank van services in Scotland was promised, it has emerged that many communities are actually facing shorter visits from these lifeline vehicles. This leads to business owners travelling for hours to deposit cash, when they should be using that time to grow their firms.

“More than 90 per cent of our members bank online. There are times when we as small business owners have to visit branches though, not least when taking out a float at the start of the day and depositing cash after closing to protect ourselves from theft. Equally, as we’ve seen in recent days, there are times when online services are shut off and you need to meet with a real person. 

“RBS should return the support it’s received from the public by meeting business and consumer demand for a properly resourced branch network.”

Mr Cherry re-iterated his message with the announcement that Lloyds’ pre-tax profits rose to £1.6 billion for Q1 2018.

“Now that Lloyds is well and truly back in the black, it should reconsider its aggressive branch closure programme, said Mr Cherry. "The public was there for the bank during the financial crash. It’s high time that support was returned. 

“With profits like these, is another 70 branch closures really necessary?  

“When a town loses a bank branch it hurts vulnerable consumers, high street footfall and small business revenues. We’ve seen challenger banks who are expanding their branch networks also report strong results, so we know it’s an approach that works from a commercial perspective. 

“If a small firm can’t deposit and withdraw cash easily it has to store more on site, making it a target for theft. Equally, many small business owners have working relationships with branch staff that go back years. That’s not something that can be replaced by an app. 

“If the developments at TSB over the past few days have taught us anything, it’s that sometimes you just have to visit a branch in-person. 

“Alongside branch closures, the big banks are now trying to force through a cut in funding for cash machines. If LINK’s proposed reduction to the ATM interchange fee is allowed to go ahead, serious damage to high streets could be done. The regulator must intervene before that happens.”