TSB is to take the axe to one seventh of its workforce and one third of its branches in a drastic attempt to adjust to changing customer behaviour and the headwinds created by Covid-19.
The bank said it was cutting about 900 jobs and shutting 164 branches, with Debbie Crosbie, chief executive, announcing it was necessary to accelerate a three-year cost-cutting plan first announced in November.
It said 969 roles would be lost, mainly in branches now earmarked for closure, though these would be partly offset by the creation of some new jobs. Most of the reductions would be met by voluntary redundancy, it said.
The newly announced branch closures will bring the network down to 290 by next summer, down from almost 630 seven years ago. The bank is already in the throes of a programme to close 82 branches by the end of this year.
TSB was carved out of Lloyds Banking Group in 2013 and after a short period as an independent listed company was sold to Sabadell, the Spanish banking group, in 2015 for £1.7 billion. It has 5 million customers and a full-time workforce of 6,800 people.
Ms Crosbie, who was drafted in to run the bank last year after a calamitous IT blunder that involved customers being locked out of their accounts for weeks, said that fewer people were using branches and more were banking online.
She said 94 per cent of customers would still be within 20 minutes of a branch after the cuts. “And we’ll still have more branches than Virgin Money and Co-op Bank put together.”
TSB has been hit by a rise in bad debt provisions and thinning interest margins brought about by the crisis and last month reported a loss of £66 million for the first six months of 2020, compared with a £21 million profit last time.
Ms Crosbie said she still hoped to achieve a net saving of £100 million over three years, but raised doubts about her profit target of £130 million by 2022. “We haven’t dropped it, but we will be looking at what is realistic in the current climate.”
“Closing any of our branches is never an easy decision, but our customers are banking differently — with a marked shift to digital banking,” Ms Crosbie said. People were signing up to TSB’s mobile banking app at the rate of 4,000 a day, compared with 1,200 a day before Covid.
TSB said it would be introducing a team of 100 “mobile advisers” who would operate in Citizens Advice and other premises in rural areas and places affected by the branch closures.
Unite, the union, said that TSB staff would be devastated by the news. “ Not only do these staff deserve more from their employer after showing the utmost loyalty to TSB, customers will be deeply hit by these branch closures.”
TSB said it would publish the locations of branches earmarked for closure on its website this afternoon.
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