Branch closures hit poor hardest in the UK - An article from The English Guardian Branch closures 'hit poor hardest' Susan Smillie and agencies Thursday February 23 2006 The Guardian Bank and building societies have closed one in five branches in the last 10 years, with deprived areas bearing the brunt of the closures, research shows today. The study, from the University of Nottingham, found that 4,041 branches were closed between 1995 and 2003, while only 1,074 were opened. And the university found that branch closures were more likely to happen in multicultural inner city areas, hitting the UK's most deprived communities hardest. It said poorer, urban areas had lost nearly 3,000 branches over the period covered by the report, with some multicultural metropolitan areas losing 24% of their branches. This compared with an average closure rate of 20%. The study found that built-up areas, traditional manufacturing areas and student communities also experienced higher-than-average rates of branch closures. It said the findings suggested there was a twin-track pattern of branch closures, with customers in affluent suburbs, small towns, coastal areas and the countryside getting the best deal. Professor Andrew Leyshon, of the University of Nottingham's School of Geography, said: "The current research confirms that the branch networks of both banks and building societies have now been in a continuous process of decline since at least the late 1980s. "Against a background of overall decline, we anticipate a further reduction in the share of bank and building society branches located within less affluent urban areas and a relative increase in the proportion within suburban areas and small towns. "The closure of banks and building society branches can have significant consequences for customers, who may have to incur additional costs to travel to undertake transactions or obtain face-to-face advice, in addition to engendering a sense of loss and abandonment within local communities." He added that the loss of counter services and cash transmission was particularly problematic for local businesses. Adrian Coles, the Building Society Association's director general said that while the banks had closed one in five of their branches, the biggest building societies had closed one in 20. "Over the next few weeks we will see banks once again announcing record profits. This report is a timely reminder that the pressure to squeeze every last drop of profit has meant abandoning less lucrative customers and closing one in five of their branches," he said. "Former building societies are little better, and while some people may have benefited from the temporary windfall of a demutualisation, there are many more communities who today do not have a branch within easy access, as a result." The Campaign for Community Banking Services (CCBS) called on the banks to trial "shared branching" in deprived areas. "If the costs are shared, there is no reason why banks should not be able to deliver a profitable service even in poorer areas," said Derek French, director of the CCBS. "It is disgraceful that a government committed to reducing financial exclusion can stand by and allow the banks to abandon the weakest in society without considering any alternatives." There has been growing concern in recent years about financial exclusion in poorer areas. In February 2005 the government set up a financial inclusion task force to look at the effect of bank closures and lack of banking facilities on deprived communities. And earlier this month, the Treasury announced it would hold a summit to discuss the increasing number of fee-charging cash machines, which are often located in lower-income areas ID: 36905 Author(s): iff Publication date: 27/02/06

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