As more bank cuts affect communities
CYBG turning city branch into SME co-working centre
George St branch in Edinburgh
CYBG, owner of Clydesdale Bank, is hoping to counter criticism of its branch closure programme by boosting its services to SMEs.
It will evolve its giant branch in the centre of Edinburgh into a co-working space for SME customers. The George Street outlet is expected to adopt the B Works brand which has been successful in London, Manchester and Birmingham, providing a range of services for businesses.
Helen Page, brand and marketing director at CYBG, told the CBI Scotland lunch in Edinburgh: “We are hoping to convert our George Street branch into co-working centre.”
The branch, which opened in January 2017, is housed in a former Waterstones bookshop and replaced the bank’ operations in Clydesdale Plaza, in Lothian Road.
Ms Page said the bank is redefining the role and purpose of its retail presence on the high street with B Works.
The announcement followed outrage at the bank’s decision to close more branches, including its last branch in St Andrews. Customers have been told they will have to travel to Dundee to find their nearest branch.
MP Stephen Gethins said: “North East Fife has been hit hard by the closure of several bank branches and post offices across the area in recent years.”
Clydesdale also announced its Brora branch will close from August following a “difficult decision” in order to meet “changing consumer demand”.
The closure will leave customers with no permanent bank of any kind in the community, forcing them to travel more than 46 miles north or south to the nearest Clydesdale branches in Dingwall and Wick.
East Sutherland and Edderton councillor Deirdre Mackay said: “They have provided advice on services offered by the Post Office and we haven’t had a permanent post office in Brora for over a year. It’s really rubbed salt into the wound. They haven’t done their homework.”
Branches in Arbroath, Glasgow and Largs will also close, leaving 62 branches across Scotland.
Ms Page told the CBI lunch: “Branches need to fit what customers want. We have closed branches but we are investing heavily in the network.”
CYBG announces half-year figures on Wednesday when it is expected to report that cost savings from the £1.7 billion merger with Virgin Money deal are higher than predicted and are expected to be running at £150m a year by 2021. The deal made CYBG the UK’s fifth largest banl
However, it is still embroiled in a legal action over the alleged mis-selling of tailored business loans to SMEs.
RGL Management Ltd (RGL) formally commenced legal action on 1 May for a large claimant group against Clydesdale Bank and its former owner National Australia Bank.
RGL’s claim overall group consists of almost 2,000 claimants from England, Scotland and Wales, and is still growing. The group includes a number of companies driven into insolvency.
The first claims were issued on 2 May in the Chancery Division of the High Court, representing 148 claimants.
RGL continues to verify and prepare further claims which will be issued in the English and Scottish courts.
The allegations against Clydesdale and NAB relate to the banks’ conduct in respect of TBLs and give rise to claims in Deceit, Misrepresentation, Negligent Misstatement, Breach of Contract and Unjust Enrichment.
RGL has instructed English solicitors, Michelmores, led by Partner, Garbhan Shanks, with specialist banking counsel, Andrew Onslow QC and Lisa Lacob. In Scotland, RGL has instructed Cat MacLean, Partner and Head of Dispute Resolution of MBM Commercial LLP and Craig Sandison QC.
The case is being funded by the UK’s largest litigation funder, Augusta Ventures. After the Event insurance is in place.
It is not possible to quantify the exact value of the claim at this stage. Direct losses alone will amount to hundreds of millions of pounds and the addition of consequential losses will make this value considerably higher.
A CYBG spokesman said the group action claim would be defended “in the strongest terms possible”.