1Introduction
1.On 1 December 2017, the Royal Bank of Scotland (RBS) announced plans to close 62 RBS branches across Scotland leading to 158 job losses.1 A full list of the affected branches can be found on RBS’s website.2 This is part of a programme of 259 branch closures across the UK, including 197 operated under the NatWest brand. Should these closures go ahead there will be 89 RBS branches left in Scotland.3
2.RBS defended the closures, stating that it was a response to increasing numbers of customers accessing services online or via mobile devices. The bank said it has seen a 40% drop in the use of branches since 2014 with mobile transactions having increased by 73% over the same period, these figures appear to be UK wide covering RBS, Natwest and Ulster Bank of Northern Ireland branches.4
3.Reaction to the announcement has been highly critical, with business groups, communities, unions and politicians from all the major parties in Scotland expressing concerns. There have been calls from a number of sources for the UK Government—which currently owns a 70.85% stake in RBS as a result of its financial bailout of the bank following the 2008 financial crisis—to use its majority shareholding to intervene and force RBS to reconsider the closures.
4.Given the extent of the most recent round of closures, and the widespread concerns that have been expressed about the likely impact on businesses, communities and staff, we decided to hold a short inquiry to discuss the closure proposals with affected groups and examine the closure decision with senior staff from RBS. We held a public evidence session on 17 January where we heard from Scottish Rural Action, Unite Scotland, Scottish Chambers of Commerce, the Post Office and senior RBS executives. We also invited the public and interested organisations to comment on the closures by submitting written evidence or posting in an online forum hosted on MoneySavingExpert.com.5
5.Following this session RBS announced its decision to delay the closure of ten branches by six months to give these branches the opportunity to improve their performance, after which the decision to close them will be reviewed again.6 We held a second evidence session with RBS, including their Chief Executive, Ross McEwan, on 8 May to discuss these developments. We also took the opportunity to hear from the Lending Standards Board, who oversee the voluntary code of practice on branch closures, to which RBS is a signatory. We are grateful to all those who contributed to our inquiry.
6.We begin this Report by focusing on the role of RBS itself - making recommendations to RBS as a company about the standards we expect of it, given the extent of public ownership. We then turn to what action we believe the Government and regulator should take before finally considering the adequacy of alternative methods of banking that were raised during this inquiry.
1 BBC News RBS to close more than a third of branches in Scotland 1 December 2017
3 BBC News RBS to close more than a third of branches in Scotland 1 December 2017
4 RBS, Help and support for personal and business customers - Alloa branch closure, accessed 15 May 2017
5 http://forums.moneysavingexpert.com/showthread.php?t=5762807&page=1#topofpage
Published: 27 May 2018