Newcastle BS to cut 19 branches

By THIS IS MONEY
Updated: 06:22 EST, 9 August 2005

ONE of the UK's top 15 mutual lenders, the Newcastle Building Society, has confirmed it is cutting 19 branches as part of a cost-cutting exercise.

The company said the branches are outside its North-East heartland and are being closed due to falling customer usage.

The building society added that staff recruitment has become increasingly difficult at the branches , with employee turnover in the affected branches twice that of those based in Newcastle.

Five branches will be closed in Scotland, with the remainder going in locations in Yorkshire, Lancashire and the East Midlands.

Newcastle BS chief executive Robert Hollinshead said: 'The business reasons for the branch closures are compelling. I know customers will be upset at this move, but it is best for the society as a whole.'

Existing customers of the closing branches will be able to continue to use the building society via direct methods.

Around 100 jobs are expected to be lost as a result of the closures but a spokeswoman said it hopes to offer as many people as possible alternative roles.

The move will leave the company with 33 remaining branches. In last year's accounts, Hollinshead referred to Newcastle's High Street presence as a 'key element' of its distribution channel. But he also admitted that the society had 'an unusually large branch network'.