TSB – owned by Spanish company Banco de Sabadell (BME: SAB) since 2015 – has seen stocks occur unharmed on Wednesday afternoon despite news that the bank plans to close 164 branches and cut up to 1,000 jobs across the UK.
Describing the decline in customers visiting High Street Bank during the coronavirus pandemic, TSB announced that store closures reflect a shift in customer attitude towards a more efficient and simple online banking system.
TSB follows in the footsteps of John Lewis (LON: JLH), Pizza Express (HKG: 3396) and WH Smith (LON: SMWH), posting job losses this year and is the latest in numerous high street brands to sell closures.
The retail sector has been particularly hit by the pandemic as the lockdown measurements forced thousands of businesses to close doors to customers between March and June. Even if stores reopen in the summer, footsteps on High Street are well below the average period, according to data collated by the UK Retail Consortium (BRC) and Shoppertrak.
In particular, High Street Banks faces competition from online businesses, demonstrating a lifeline of millions of people to manage their personal finances during the peak of the pandemic, when access to in-store customer service declined.
TSB said it has registered around 4,000 new customers per day on its digital app compared to just 1,200 before the pandemic, showing more than 90% of transactions processed digitally this year.
Chief Executive Debbie Crosby commented on the company’s announcement.
“Closing any of our branches is by no means an easy decision, but our customers are banking differently, and there is a significant shift towards digital banking.
“We are restructuring our business, transforming our customer experience and setting us up for the future.
“This means finding the right balance between high street branches and digital platforms, providing the best experience for individual and business customers across the UK.”
Unite union, which represents TSB employees, stressed that not only bank workers, but also clients are hit by planned closures.
Unit National Officer Dominic Hook warned the Guardian on Wednesday.
“The financial services industry is socially responsible for staying away from local customers who continue to need access to banking operations at banking branches.”
Although job cuts and storage closures are not expected to be finalized until next year, TSB ensures that 94% of its customers will be located within 20 minutes of the High Street Branch.
Shares in TSB’s parent company Banco de Sabadell have grown 4.80% to 0.30 euros despite the announcement, and were surprisingly resilient at 14:45 BST, but have fallen from 0.39 euros per month earlier this month.
However, Banco de Sabadel was unable to fully escape the pressures of the pandemic. The stock slipped quite a bit from its peak at 1.07 euro at the start of 2020, but investors could be comforted by the knowledge that appears to have levelled over the last few months and staying within the 0.26-0.35 euro range.
