Bank Branch Closures Spark Fears For SMEs

4th December 2017.

Taxpayer-owned RBS has sparked concerns for small businesses after announcing plans to axe a quarter of its bank branches with the loss of 680 jobs.

The Royal Bank of Scotland (RBS) is to close 259 of its 1,003 branches in the UK, provoking concerns that small businesses are not getting enough support.

The Scottish secretary David Mundell has said he is seeking an urgent meeting with RBS to discuss the impact these closures will bring, describing branches in rural areas as “a lifeline for many people”.

UK lenders are closing a record number of branches this year as their customers increasingly choose to bank online. Union Unite has warned the wave of closures could “mark the end of branch network banking”.

RBS had already announced 158 branch closures in March with the loss of 500 jobs, with Lloyds axing 49 branches. Analysis by The Telegraph has put the total number of bank branch closures planned for this year at 661.

A spokesman for the Scottish Bank defended the decision, adding that over three years the number of customers visiting branches had fallen 40pc, while mobile transactions had jumped 73pc.

Business lobby group the Federation of Small Businesses (FSB) insists that while online banking remains popular, visiting bank branches is “still hugely valued” by small firms.

This is particularly seen in the more rural areas of the country, where access to cash can become problematic. FSB chief Mike Cherry urges this is “a big issue” for trade in thousands of towns and villages.

Scotland’s business minister Paul Wheelhouse supports Cherry’s claim, fearing the impact on the most vulnerable members of society, where going into a branch is the only feasible way to conduct banking.

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