Bank's customers could have accounts moved

By STEPHEN WOMACK
Updated:

More than a million customers could have their bank accounts transferred to new ownership after Royal Bank of Scotland put the 'For Sale' sign over more than 300 of its branches.

The sale covers not only the physical premises, but also the staff who work there and the customers - both business and personal - who bank through these branches.

Last year the European Commission ordered RBS and Lloyds to sell assets, including more than 900 branches between them, as part of the price for receiving State aid. The banks were given up to four years to arrange the disposals, though RBS is moving more quickly.

RBS cashpoint machine

On the move: RBS customers could see their accounts moved to new banks

But there are fears that the sales and subsequent restructuring could accelerate the pace of branch closures, leaving more consumers facing longer journeys to meet everyday banking needs.

Over the years, Financial Mail has closely tracked the branch closure programmes of organisations such as Barclays, HSBC, Nationwide Building Society and Lloyds TSB.

Derek French of the Campaign for Community Banking lobby group says: 'Depending on who buys the branches and what they already own, there is the prospect that any overlap between branches could speed the pace of closures.'

RBS has been ordered to reduce its share of the business banking and current account markets by selling the 311 RBS-branded banks in England & Wales. Only the handful of NatWest branches in Scotland will be sold.

The new owner could brand the branches under the historic Williams & Glyn name, which will also be sold as part of the deal. The Government is keen for more competition in banking and wants to see new entrants, such as Virgin, build a network.

Other possible bidders include National Australia Bank, which owns the Clydesdale and Yorkshire banks, and Santander. Although Santander has already absorbed Abbey, Alliance & Leicester and Bradford & Bingley, it wants to grow its share of the business banking market.

French says: 'The RBS branches are not really a viable network on their own. They are not evenly spread - about 40 per cent are in the North-West around Liverpool and Manchester and only one quarter are in the South-East. Buyers might want to pick off parts of the network that fit with what they already own.'

Lloyds Banking Group, meanwhile, has agreed to sell a long list of assets. These include all 185 Lloyds TSB branches in Scotland; the Cheltenham & Gloucester mortgage business, which has 164 outlets; about 250 Lloyds branches in England, which have yet to be selected; and online savings arm Intelligent Finance.

The aim is for the whole lot to be sold to one buyer, creating a ready-made competitor with about four million customers.

But chief executive Eric Daniels told MPs at the Treasury Select Committee last week that the bank was in no rush, having up to four years to do the deal.

French says: 'It is not going to be easy for the banks to parcel up the customers and branches and flog them off. Nothing like this has ever happened in Britain before.'

Dominic Lindley, policy adviser at consumer group Which?, says that Lloyds TSB and RBS must ensure that any asset sales are open and transparent.

He says: 'There needs to be a significant notice period for customers before any transaction takes place and no cherry picking of customers by either the seller or the buyer. And whoever buys must have full membership of the Financial Services Compensation Scheme.'

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