Royal Bank of Scotland (RBS) is gearing up to close 150 or more branches and lay off hundreds of employees in an effort to reduce costs as the march toward digital banking continues to take hold.
According to a report in The Financial Times, RBS will reduce its branch network to slightly more than 1,000 branches after what the Times said was a “dramatic shift” in customers preferring to use mobile and online rather than walking into a branch. As part of the downsizing of the branches, the report noted 744 full-time jobs will be eliminated, with about 300 of the employees being redeployed elsewhere at RBS. The move, noted the report, comes after RBS, which is 72 percent owned by the government, lodged an annual loss for the ninth year in the row. The report noted RBS is looking to realize £750 million of cost savings in 2017 and a total of £2 billion by the end of 2020.
“Banks have a duty to the wider community, and that is especially the case for banks like RBS that have large taxpayer-owned shareholdings,” Gail Cartmail, acting general secretary of Unite, the union, in the report. “It’s time for banking regulators and government to intervene, to force banks to maintain an adequate network that properly serves communities across the U.K.”
The report noted that banks in the U.K have shuttered 1,000 branches during the course of two years due to increasing pressure on lenders to slash their costs. The Times pointed to a report by consumer group Which? that found at the end of 2016, HSBC closed the most branches since the start of 2015, shutting 321, followed by RBS, which closed 191. RBS has said that transactions at branches have dropped 43 percent since 2010, while mobile and online transactions jumped more than 400 percent in the last seven years.