Select Committee on Treasury Minutes of Evidence


  During the Treasury Select Committee session on 18 April 2000, Barclays Group Chief Executive,Mr Matthew Barrett, promised to write to the Committee on two matters. I hope the following information is sufficient for your purpose.


Q.   "Were you losing millions of pounds in the 171 branches"?

    (a)  The annual costs saved by closing the 171 branches on 7 April 2000 will amount to £20 million.

    (b)  By closing these branches we have avoided one-off capital expenditure amounting to £46 million.


Q.   "Your chief executive of financial retail services was quoted as saying that a fee of £1 was reasonable, but he said it was still only sufficient to recover about 25 per cent of your costs". "Why then is your analysis in Barclays so much at odds with the analysis that Mr Cruickshank quoted"?

  The remarks referred to in the transcript were distinguishing between on the one hand the aggregate cost of running our cash machine network and on the other the aggregate amount recovered on the transactions for which we intend to levy a charge. Each transaction processed through our cash machine network creates a cost for us whether or not we impose a charge on the user.

  As a result of our abolition during last year of so-called disloyalty fees, the income we generate from ATM transactions will fall. This income loss will partly be offset from next year by the introduction of pre-notified user fees for certain non-customers withdrawing cash from Barclays cash machines.

  Based on our assumptions about which users we will charge and for what transactions, and based on our original assumption of a direct user fee of £1 per cash withdrawal, we were saying in the remarks quoted that we expected to recover no more than 25 per cent of our total annual cash machine running costs. This is because the majority of transactions processed by our cash machines will be free.

5 May 2000

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