TSB is set to announce the closure of 14 branches following the biggest IT meltdown in UK corporate history. It is also planning to reduce the opening times for many branches in an attempt to reduce costs. Lloyds Banking Group adopted a similar strategy and that inevitably led to more branch closures with customers forced to do their banking elsewhere.
Following the IT meltdown – which saw 2 million customers locked out of their accounts – TSB was saved because customers could access their accounts by using branches. To now close branches and reduce opening times is a kick in the teeth for those staff that saved the Bank from total collapse.
In an interview a few months ago, Richard Meddings, Executive Chairman, acknowledged the role branches played in the IT meltdown and said:
“Our issue was primarily an access issue, so if you lose your online capability, having the physical branch network made a real difference. We didn’t get given the best branch network when we left Lloyds so there will be some that will be closed, some will open, we’ll invest in others. [But] our plans [for cutting branches] are different today to what they would have been if we had this meeting when I joined the board last October.”
It seems that the TSB Board has conveniently forgotten what the branches did and is now intent on cutting branch numbers and that will inevitably mean more job reductions over the course of the next few years.
As a challenger bank, TSB is heavily reliant on its branch network footprint. Closing branches will further harm its already damaged reputation and will reduce its visibility when it needs all the profile it can get.