Study finds most bank branch closures in poor areas

Study finds most bank branch closures in poor areas

	Published : Thu, 23 Feb 2006 10:25 By : Amy Watts Print this Story

LONDON: Some of the poorest areas in Britain were the worst affected by the closure of branches by the banks and building societies, an independent study has revealed.

The University of Nottingham, which carried out a research-based study, showed that less affluent inner cities and predominantly manufacturing areas have seen closures of the branches, while areas defined as "middle England -- constituting the suburbs, small towns, coastal and countryside areas -- witnessed the lowest closure rates.

The Economic and Social Research Council-sponsored study showed that more than 4,000 branches of banks and building societies were closed during 1995-2003, while only 1,000 new branches were opened. Almost 24 per cent of the closures were in 'multicultural metropolitan areas', including inner city areas, while suburbs and small towns accounted for about 17 per cent.

The report said the reasons given for closure vary from measures to cut costs to failure of the branches to meet performance targets to changes in population patterns. Major banks closed 22.4 per cent of their branches, the 10 biggest converted building societies closed 19.3 per cent of branches and the top 10 building societies 5.1 per cent of branches.

The report comes just ahead of the leading banks in the country coming out with their financial results. Barclays Bank had already published its performance report, having recorded an all-time high profit of 5.3 billion pounds.

The British Bankers Association defended the closures. Its spokesperson, Brian Capon said modern banking provides multi-channel approaches, through branches, the phone and the Internet, and branches are very much like any other retail outlet. "Sometimes you have to make tough decisions based on how many people are coming through the door."

The university's researchers, Professor Andrew Leyshon, Dr Paola Signoretta and Dr Shaun French, felt that the closures could lead to additional travel costs, inconveniences to local communities and more pressure on small businesses.