Hundreds more jobs under threat as Yorkshire Bank group closes another 50 branches

Yorkshire Bank and its sister Clydesdale are planning to close a further 50 branches which could involve making hundreds of people redundant as it invests £350m on online and technology.
Yorkshire Bank chief executive David DuffyYorkshire Bank chief executive David Duffy
Yorkshire Bank chief executive David Duffy

The banks’ chief executive David Duffy said it is too early to say how many jobs will go, but confirmed that the branch network will be reduced from 248 to less than 200 as it reacts to an increase in demand for online banking.

“At a number of branches we looked at, customers have fallen away as they move to digital,” he said.

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“We are taking out branches where there isn’t business. We are opening branches in Liverpool, Birmingham, Manchester, Edinburgh and London. We will put new branches in where there is a big footfall and we will provide longer opening hours.

“We are reacting to what customers are doing.”

He added that all the remaining branches in Yorkshire will be transferred to a “very high-tech” digital platform which will be state-of-the-art.

He said the bank is not saying where branches will close or how many redundancies there will be at this stage, but said the group hopes to reduce headcount through attrition and voluntary redundancy.

“We will try to avoid compulsory redundancies. That is what we’ve done so far,” he added.

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He said that redundancies could be decreased if the business picks up.

The banks’ parent company CYBG, which was spun off from former owner NAB in February, said it will cut costs by a further £100m and the 50 closures will take place over the next three years.

CYBG’s latest cost cutting drive comes after it recently announced plans to shut 26 branches nationwide by the end of September and reduce its workforce, with nearly 500 jobs axed over the past 18 months. It will deliver the new cost savings by the end of September 2019 to help it meet performance targets earlier than planned.

The challenger bank said its new strategic plan takes into account revised expectations for the UK economy after the Brexit vote.

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“It’s to early to say what the impact of Brexit will be,” said Mr Duffy.

“It will take a couple of years for the long term impact to become visible. We have decided to be extra cautious.”

The £350m investment in online and technology comes as people increasingly ditch branch visits and manage their accounts online. Mr Duffy said it is now possible to open an account with Yorkshire Bank online in 11 minutes.

The group has already trimmed costs to around £730m in the current year, which is 4 per cent more than originally targeted. It has cut its branch numbers by nearly a quarter since 2013, from 323 to 248 this year. Staff numbers are around 7 per cent lower since March last year, down from 7,018 to around 6,500.

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In an investor presentation, the group said it wants to improve its customer-facing operations, but also have “smaller and more efficient” support teams.

The group said it expects its net interest income to be “broadly stable”, but now expects its residential loan book to grow at a slower pace following the Brexit vote.

It expects growth of around 5 per cent by 2019, against previous expectations for 8 per cent by 2020. It reported a 4.2 per cent fall in underlying earnings to £107m in the six months to March 31.