Royal Bank Of Scotland (RBS) has refused to reconsider its plans to close at least 52 branches in Scotland. MPs, businesses, consumers and unions had all asked the bank to stop the closure plans, but at their annual general meeting yesterday the bank’s board of directors refused to be budged.
Bank chairman Sir Howard Davies told shareholders at the Edinburgh meeting the branches were being closed as their use had fallen sharply as customers turned to digital banking. He also laid some of the blame on its competition responsibilities brought on by its plans to scrap the sell off of its Williams & Glyn brand. Part of that deal was that the bank is being forced to encourage small business customers to switch to other lenders to increase competition.
Said Sir Howard: “It would be difficult for customers to transfer or get them to transfer if their branches were still open.” Chief executive Ross McEwan said he and the rest of the board were ‘well aware of the issues’ for communities and vulnerable customers, but added “I’m convinced that if we as a bank don’t respond or put in place other alternative actions … this bank will continue to have difficulties.”
At a Unite union protest outside the AGM union officer Lyn Turner said the savings the bank would make did not justify the impact on their customers and also meant the loss of 300 part time jobs. She said: “This is purely about profit. They are turning their backs on local communities and local businesses.” The Scottish closure plan originally called for 62 branches to be shut down, but the fate of 10 is being reconsidered with a decision expected later in the year. It is part of a much larger cull of branches with 100 more putting up the shutters across the rest of the country.
Outside the AGM tThere was also speculation about the timing of the government’s rumoured sell-off of 10% of its shareholding for an estimated £3 billion. Retiring chief financial officer Ewen Stevenson told journalists that the sale might be delayed because of ‘market turmoil’ over the rise of Eurosceptic parties in Italy. He said: “Obviously, when you look at what’s been happening in the markets in the last few days with Spain and Italy and a significant sell-off in bank stocks, I would be surprised if now is an optimum time to sell stocks.”
If the sale does go ahead it will be the second sell-off of RBS shares. The first was in August 2015 when former Chancellor of the Exchequer George Osborne sanctioned the sale of 636 million shares for a loss of £1 billion. The new sale will also be at a loss as the current share price is 12% lower than it was in 2015, making the government’s 71% holding worth less than £25 billion.
The Labour government pumped £45 billion into RBS at the height of the 2008 financial crisis, but current Chancellor Philip Hammond has already said he thinks it unlikely that all the money will be recovered, but would try ‘to achieve far value.’ He told the House Of Commons: “We have to live in the real world and make decisions on the future of our holding in RBS in the best interests of taxpayers.”
“Royal Bank Of Scotland (RBS) has refused to reconsider its plans to close at least 52 branches in Scotland.”