Fears of hundreds of bank closures at Lloyds, Halifax and Bank of Scotland

There are concerns High Street banking group Lloyds is set to close hundreds of branches - fuelling fears that communities across Britain will become "financial deserts". A leaked memo to staff said the group is looking to "evolve how (it) supports customers", which some employees reportedly believe is code for mass branch closures.

The change could reportedly see the number of branches operated by the group fall, yet any such move would reportedly be softened by measures to allow customers to use any outlet operated by the group. This would mean Halifax customers would be able to use a Lloyds or Bank of Scotland if their local branch closes, it is claimed.

Thousands of bank branches from across the sector have been closed in the past decade, leaving a black hole in many town centres. This is seen as a particular problem for older customers, who prefer to deal with bank staff face to face when handling their finances. It also makes life difficult for small businesses who need banks to deal with their cash takings.

Branch closures have also cut the number of free to use cash machines with the result people are increasingly being charged for access to their own money. In a memo to staff laying out priorities for the year, Lloyds’ consumer relationship chief Jayne Opperman allegedly said the group needed to “evolve how (it) supports customers” in physical branches even as “more people are choosing mobile over any other way to bank”.

The document, which has been seen by the Financial Times, reportedly added: "That’s why — from later this year — we’ll make it possible for customers to use any of our Lloyds, Halifax and Bank of Scotland branches, regardless of the brand they bank with, giving them access to the UK’s biggest combined branch network."

Banks in general have justified closures by saying they are simply responding to a shift by customers to shift to banking via the web and mobile phone apps. Jayne Opperman allegedly said in her memo that a key priority for the group is increasing its number of mobile app users — from 20mn currently — and that it would update its Halifax and Bank of Scotland mobile apps in coming weeks.

She reportedly added: "I know change can feel daunting, but when we embrace it, we create better outcomes for both our customers and colleagues."

The high-street bank has about 932 branches and around one in four are in locations that are relatively close to one another. Combining banking services across different brands could make some of those branches redundant, adding to concerns that it could pave the way for another round of mass closures.

Mark Brown, general secretary of BTU, an independent union at Lloyds, told the FT that the main driver of the alleged bank branch sharing decision was “to make it easier for Lloyds to close more branches and save more money”. He added: "We estimate that Lloyds will be able to close 233 branches at the virtual drop of a hat, with thousands of staff losing their jobs,."

Lloyds said it was “always looking for ways to make banking easier and more flexible for our customers”. High street banks have closed more than 6,000 branches in the past decade, according to consumer group Which?

These closures have helped lenders cut costs, but strained local communities’ access to cash and financial services. More than seven in 10 UK adults use cash at least once a fortnight, according to ATM network provider LINK. Just this week the Nationwide revealed that it has seen a 10 percent increase in the number of cash withdrawals from its ATM machines last year. It is thought that this was largely because other banks have closed branches and free to use cash machines.

The Labour government has pledged to combat the closures by accelerating the rollout of so-called banking hubs which offer services on behalf of finance giants. These are run jointly by banks, Cash Access UK and the Post Office in areas where lenders have retreated. It has set a target of 350 hubs over the course of the current parliament.

Lloyds’ strategy under chief executive Charlie Nunn has been to “deepen its relationship” with customers at the same time as becoming increasingly digital. As part of that effort, the bank has reviewed 2,500 jobs, and in 2023 embarked on a round of job cuts.