Bank branch closures are hurting small firms, says FSB as Lloyds announces profits

FSB
Mike Cherry, National Chairman of the FSB

Closure of high street banks is hurting high streets throughout the country, FSB National Chairman Mike Cherry has claimed.

He took the stand in response to announcement of Lloyds’ pre-tax profits hitting £3.1bn in the first half of 2018 amid plans to close more than 80 bank branches.

He said: “The rapid pace of bank branch closures is hurting high streets all over the country. Thousands of small businesses regularly use branches to deposit and withdraw cash, access advice around new finance and receive in-person support when online banking services crash.

“We’ve lost more than 1,500 branches in the past two years alone – a figure that’s set to rise to 2,000 by the end of this year. On top of that, we’ve lost 1,500 cash points since LINK announced cuts to cash machine funding a few months ago.

“This squeeze on banking services and free access to cash means less footfall on struggling high streets and less cashflow in local economies. The result of which is, inevitably, slower growth.

“More than 90 per cent of our members use online banking. There are plenty of occasions, though, when those online services need to be complemented by in-person advice and support. We need to remember that over a third of adults, often vulnerable consumers, do not use online banking.

“A key issue is that banks are under no obligation to publicly consult on branch closures before final decisions are made or invest to improve replacement Post Office services as they leave town. The Access to Banking Standard must be strengthened.

“We urge all small firms who secured a business loan prior to 2010 to consult the Financial Conduct Authority’s guidance on Payment Protection Insurance before the deadline next year. Too many small firms were mis-sold PPI policies. It’s vital that all those affected receive compensation.”