The irony of TSB’s announcement yesterday of 82 branch closures and 400 redundancies will not be lost on staff coming just a few days after another major IT meltdown which saw the bank telling customers to visit branches to get emergency money. When another IT meltdown happens again, and it will because the TSB platform is still not stable, customers won’t be able to visit 82 branches because they will have disappeared. And that’s just the beginning because we expect TSB to announce further branch closures later next year. Hundreds of staff who saved TSB following its major IT meltdowns are being sacrificed on the altars of costs, efficiency and technology.
As we predicted from the day Debbie Crosbie walked over the threshold in Gresham Street, her job is to get TSB ready for sale to the highest bidder and that’s what today’s announcement is all about. It means reducing costs, increasing cross sales and stabilising the IT platform. And the new ‘TSB purpose’ is little more than a combination of words being used by Lloyds and HSBC!
What’s also clear is that there will be a big push on sales, so members shouldn’t be surprised if we see some of the old sales tactics of the past coming back; albeit updated for the ‘new’ world.
The key headlines from the announcement today are as follows:
- The closure of 82 branches in 2020 with the loss of 400 jobs. We expect the bank to announce further branch closures in 2020, in order to meet its cost saving target of £100 million by 2022.
- The bank’s cost: income ratio is currently 85% (85p of every £1 of income is spent on costs) compared to 67% for its peer group (Santander UK, Nationwide, CYBG, Virgin Money and Metro) The increase in the cost:income ratio from 75% in 2015 to 85% today was overseen by the TSB Board. To put that in perspective, Lloyds has a cost:income ratio of 46.5%.
- More sales of packaged accounts – which will be dressed up with new names – to the existing customer base to replace fee income lost from overdrafts and changes to the Plus account.
- Big push into unsecured lending with market share increasing from 2% to 4% over the next few years. TSB looking for a £5bn net increase in customer lending between now and 2022. Staff are going to come under pressure to increase sales in all channels of the bank but particularly branch banking. And that’s why all staff left after the cull of branch jobs will be accredited to sell to customers, whether they like it or not.
- In addition to the 400 branch redundancies, the bank is looking to make savings of £34 million from non-branch areas. That will mean building closures and more redundancies in non-customer facing roles.
The union expects that all redundancies will be on a voluntary basis and staff will get the full severance terms but members should be alert to the danger of TSB trying to get rid of staff on the cheap, through for example a trawl to find disciplinary, sickness or performance cases, knowing full well that it will be making redundancies. Members who are approached by the Bank should contact the Union’s Advice Team immediately.
TBU will be producing a more detailed Newsletter in the next few days. In the meantime, members with any comments or questions can contact the Union’s Advice Team on 01234 716029.