Five bank branches to close each week

A new report suggests five bank branches a week will close between now and 2018, as figures show the number of branches has halved since 1990.

Bank branch closures are an emotive subject. And promising not to close branches – or at least, appearing to give that promise – has landed two of the nation’s biggest banking names in hot water.

Last week the Advertising Standards Authority banned two television ads from Royal Bank of Scotland (RBS) and NatWest. In them, the banks claimed that they provide banking services wherever and whenever they are the “last bank in town”.

However, the ads attracted complaints for being misleading since there is at least one area (Farley in Yorkshire) where NatWest closed a branch despite being – you guessed it – the last bank in the town.

RBS mounted the defence that its claim to provide “banking services” did not necessarily mean keeping the branches open, but that was dismissed.

It’s just the latest sad chapter in the disappearance of many high street bank branches up and down the UK.

Disappearing branches

A report last year from the Campaign for Community Banking Services (CCBS) demonstrated just how banks and building societies are no longer the reliable presence on the high street they once were.

Since 1990, the number of branches has fallen by 7,555 - that’s almost 50%! And while things have slowed somewhat over the past decade, there were still 1,889 closures.

In 2010 alone there were 180 closures, while 2011 saw a similar number disappear.

How we compare

According to the research by the CCBS, the UK now boasts about 160 bank branches per million inhabitants. This jumps to 190 when you include building societies. Here’s how that number compares with our continental cousins:

Nation	Branches per million inhabitants
Spain	940
Italy	560
Germany	470
France	420

That strikes me as a pretty staggering difference. Spain boasts five times more branches per million inhabitants than the UK!

Deserting whole communities

It’s not just about how many branches we have as a nation – it’s exactly where those branches are located that matters. And more CCBS data suggests a number of communities are at risk of losing their branches altogether.

There are 414 rural communities where only one bank remains, and 466 urban communities in the same boat. Some of these branches are now ‘protected’ as a result of pledges by the respective banks to maintain that branch presence. That said, there’s no guarantee how long those pledges will remain in place.

Here’s the breakdown of where you will find the sole bank communities:

Region	Rural sole bank communities	Urban sole bank communities	Total
North East	14	24	38
North West	31	52	83
Yorkshire & Humberside	19	45	64
Merseyside	2	23	25
East Midlands	28	19	47
West Midlands	15	41	56
East of England	34	44	78
Greater London	-	55	55
South East	51	50	101
South West	42	37	79
Wales	34	12	46
Scotland	144	64	208

As you can see, Scotland is particularly exposed.

It’s only going to get worse

The CCBS believes we are likely to see even fewer branches on the high street in the next few years. It believes that the number of branches in Britain will fall from 9,550 today to 8,000 by 2018. That’s the equivalent of five branch closures a week.

As a result, both the CCBS and the Forum of Private Business are lobbying the Government to pressure big banks into sharing premises in order to stem the tide of the biggest banking brands, that many people rely on, vanishing altogether.

Some rare good news

However, not all banks and building societies are cutting back their presence on the high street. Yorkshire Building Society has announced it plans to open 12 new branches over the next two years.

The mutual has made big strides already in growing its branch network thanks to its mergers with Norwich & Peterborough Building Society and Chelsea Building Society, which has resulted in its number of branches rocketing from 135 to 224 over the last three years.

And Lloyds has made clear its intentions to maintain its branch network (for now anyway) with the pledge not to close any more branches over the next three years.

Do we even need bank branches?

All this raises the question of exactly what purpose the bank branch fulfils in 2012. With so many people doing their banking online now, is there even a need for branches to exist?

From my own point of view, the only times I go to the bank are when I need to pay in a cheque. That’s no more than a handful of times a year, and with cheques in their death throes, I won’t even have to do that too much longer.

What do you think? Is it inevitable that more branches will disappear? And is that automatically a bad thing? Share your thoughts in the Comments section below.