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Banks defend branch closures and savings rates

Aberfeldy bank branch closure
Branch closures, like this one in Aberfeldy, have swept through the country (pic: Terry Murden)

Britain’s bank bosses have been accused of failing to pass on higher interest rates to savers and closing branches against the wishes of vulnerable customers.

Four chief executives of high street banks faced a grilling from MPs on the UK government’s Treasury select committee who criticised the way customers were treated.

Labour’s Angela Eagle said there was a lack of generosity on the part of the banks in relation to rates they offer on instant saver accounts.

Tory MP and former minister Andrea Leadsom asked lenders whether they relied on the “inertia” of customers.

Dame Alison Rose, Natwest’s chief executive, defended her bank’s record on promoting savings, pointing to a digital regular saver paying 5%.

She said it “is encouraging people to build that savings habit.”

Dame Alison Rose: significant shifts in behaviour (pic: Terry Murden)

The bank leaders insisted they remain committed to physical branches, despite a string of recent closure announcements.

Ian Stuart, chief executive of HSBC UK, said the bank is “absolutely committed to a physical footprint in the UK”.

He told the hearing: “We think it’s important, but we have to get it scaled properly for the long term.

“Customer behaviours started to change in 1982 with the advent of the cash machine. And it’s been on a journey from that point and it’s speeded up.

“And through the pandemic it accelerated, there’s no question that customers changed their banking behaviours.”

Mr Stuart said 98% of the bank’s transactions in December were digital.

Dame Alison said: “We’re seeing significant shifts in customer behaviour. But we recognise we need to look after all of our customers and make sure that we support particularly vulnerable customers.”

Lloyds Banking Group chief executive Charlie Nunn, said: “We remain very committed to our branch network.”

Matt Hammerstein, chief executive at Barclays UK, said: “I definitely refute the idea that we rely on inertia, I don’t think that’s in any way representative of the way we design products or the way we engage customers.”

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