TSB managed to make a small profit in Q1 2019 but Sabadell has made it clear to Debbie Crosbie, the new Chief Executive Officer, that she needs to cut costs quickly and it looks like the ex C&G branches are going to take the brunt of this race to the bottom. A year-on-year analysis of the latest results shows that the performance of the business was down significantly in all key areas. And let’s not forget, the 5% interest rate paid on the Classic Plus Current Account, which was introduced to stop the exodus of customers post the IT debacle, ends in July and the fear now is that many customers will move their accounts.

To recap, TSB’s IT meltdown last year, which saw 1.9 million customers denied access to their personal and business accounts, will have cost the bank up to £400 million to put right, and that excludes fines by the FCA and PRA. Those fines alone could be up to £100 million.

Sabadell’s Chairman, Josep Oliu Creus, who is calling the shots in TSB, made it clear the bank must reduce its costs significantly over the next few years to recover the money it’s spent on cleaning up the IT mess. History tells us that the bulk of those savings will come from reducing staff numbers and closing branches. All the other banks have done exactly the same when seeking to reduce their costs.

Members with longer memories will recall that two years ago we predicted this cost cutting would start soon after the Sabadell sale but our claims were rejected by TSB management and those staff who were taken in by the publicity. However, it did not take a genius to work out that Sabadell has only one business model and that cost cutting is at the heart of it; we are now going to see that model applied.

TSB recently announced that it would be closing branches and reducing the opening hours of many more across the country. A lot of those branches that are reducing their opening hours are ex C&G branches. And let’s not forget that at one stage Lloyds Banking Group had decided to close all the C&G branches and they were only saved because it was forced to create TSB by the European Union. Those branches with reduced opening hours will be closed over the next few years as Debbie Crosbie seeks to reduce costs. Members will be aware that Lloyds Banking Group followed a similar approach: close the branch for 3 days a week, get customers used to it not being open and then close it down permanently when there is less opposition. It’s branch closures by stealth.

The bank makes much of the fact that when the Very Reverend Henry Duncan established the world’s first Trustee Savings Bank in Ruthwell, its sole purpose was to serve local people in the community. It’s that approach to banking which was supposed to make the ‘new’ TSB different. When it was launched TSB said: “We provide local banking for Britain to help local people, businesses and communities thrive together”. However, TSB is proving to be no different to the 4 big banks. It is sacrificing local communities, where branches are central to community life, on the altar of cost savings. We expect that up to 150 TSB branches, many of them ex C&G, will be closed over the next few years and hundreds of jobs will be lost. At the time of the IT crisis, TSB acknowledged that branches were a lifeline for those customers who wouldn’t normally visit their branches. And when a branch is closed, it can’t be reopened again very easily.

Members who would like to discuss the Union’s Branches Campaign in more detail, should contact the Union’s Advice Team on 01234 716029 (Choose Option 1). 

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