Lloyds Banking Group to Shutter 56 Branch Locations


January 2020

Lloyds Banking Group to Shutter 56 Branch Locations

Lloyds Banking Group will close 56 high street locations across the UK this year, in response to “changing customer behaviour.”

31 Lloyds, 10 Halifax and 15 Bank of Scotland locations will shut between April and October 2020. The closures will lead the loss of “under 80” jobs, with most employees deployed to other branches, according to banking industry union Accord.

Lloyds said it was committed to maintaining the largest branch network in the UK, but that was responding to “changing customer behaviours and the reduced number of transactions being made in branches,” as customers flock to online banking.

According to a Which? study, 55 bank branches have been mothballed each month since January 2015. Lloyds itself has closed 569 branches over the last two years while transforming some of its remaining locations into “micro-branches” without traditional counters.

The rapid rate of closures across the sector has slashed the number of bank branches by more than a third in five years, raising concerns that some customers reliant on cash and in rural locations could be locked out of the financial system.

Consumer advocate Which? said: “The loss of yet more branches to an already devastated network will hit communities across the UK hard, as there is still a clear demand for access to traditional banking services and cash.”

In November Which? revealed that 11 million Britons exclusively use non-digital banking options, including branches, ATMs, Post Office locations and telephone banking. Customers also report being uncomfortable using websites and apps to complete some banking tasks, especially applying for credit cards or loans.

The Lloyds Banking Group has 22 million current account customers, just 13 million (59%) of whom actively use online banking platforms and nine million (41%) of whom actively use mobile apps.

But other, especially younger, consumers, are embracing banks which operate exclusively online, without any high-street presence. Digital bank Monzo gained the second most current account customers between July and September 2019, after building society Nationwide. Fellow app-based bank Starling also saw its best quarter for sign-ups yet.

To compete with the app based startups, brick and mortar banks are also moving into the cloud. NatWest has launched an app-only bank account dubbed Bó, and TSB has committed to investing £120 million in its digital channels—while closing 82 million branch locations.

However, online platforms are also vulnerable to technological faults and cyberattacks. Between October 2018 and September 2019, the banking sector was hit by 265 IT outages which affected customers’ ability to make transactions—the equivalent of five a week.

Lloyds, Halifax and Bank of Scotland themselves saw their online systems crash in the first hours of 2020, locking millions out of their online banking and apps.

A spokesperson for Lloyds said customers affected by the closures could continue to use Post Office locations to access financial services and mobile branches which visit rural communities.