The Co-operative Bank has announced plans to close 18 branches and slash around 350 jobs, becoming the latest major UK firm to confirm mass layoffs during the pandemic.
The company blamed the Bank of England’s record-low interest rates, falling customer numbers in branches and “prolonged economic uncertainty ahead” for a cost-cutting drive.
The bank said it had begun consulting with staff and unions over proposal to cut staff numbers, with cuts expected to mainly hit middle management positions and head office roles. It said staff would be re-deployed where possible.
Co-operative Bank chief executive Andrew Bester said in a statement released on Tuesday: “Our people have shown great dedication and commitment to our customers over the past few months, so we are very sorry to announce this news today.
“Unfortunately, we’re not immune to the impact of recent events, with the historically low base rate affecting the income of all banks and a period of prolonged economic uncertainty ahead, which means it’s important we reduce costs and have the right-sized operating model in place for the future.”
He said the company had been forced to adapt to more customers choosing to bank online and lower transaction levels in branches, continuing a pre-virus trend. But he said the bank was in a “resilient position.”
The 18 branches are all expected to have shut down by 1 December this year. The bank said decisions were based on “careful analysis” of branch footfall throughout 2019.
Customers affected will be sent more information about their options including Post Office services, phone and online banking.
The Co-operative Group, which runs grocery, funeral, insurance and other services, sold its final stake in the Co-op Bank in 2017 after a turbulent few years which saw the bank eventually rescued by hedge funds.
“Falling central bank interest rates, in response to the coronavirus crisis, have squeezed banking profit margins, and put the loss-making Cooperative Bank under even more pressure,” noted Susannah Streeter, a senior investment and markets commentator at Hargreaves Lansdown.
“The dramatic switch to online banking amongst all demographic groups during lockdown has driven down demand for in-branch services. Already banks were dealing with a shift in the way customers do business, now that trend has accelerated, so it’s not surprising that the Co-operative Bank has announced this latest restructure as part of the ongoing turnaround plan to return the business to profit.’’
Full list of Co-operative Bank branches set for closure
The branches proposed for closure are:
City of London