One in three Halifax branches ‘to close’ as Lloyds mole reveals plan for biggest bank cull ever
(DAILY MAIL) More than a third of the Halifax branch network faces closure by its owner Lloyds in one of the biggest bank culls in history.
The move, which immediately sparked bitter criticism, would wipe out 550 small branches and ‘agency counters’ inside the offices of estate agents, solicitors and financial consultants.
It would cause huge job losses and intensify fears that the historic Halifax name may disappear completely.
Altogether, the Halifax, once Britain’s biggest building society, has about 1,300 branches.
Details of Project Tulip – the name given to the closure plan – were leaked to The Mail on Sunday by an executive angered by its secrecy and the impact it will have on communities.
The insider claimed Lloyds Banking Group plans to stagger the closures to minimise unfavourable media coverage and avoid customers swamping helplines.
Some 26 Halifax outlets were told in June they will close in what the source described as a ‘pilot’ series of closures, codenamed Project Holland.
The source added: ‘I was told in a meeting earlier this year that another 150 will be served with notice of closure next month and a further 374 in January next year.’
The plan represents the biggest cull since Barclays announced three years ago that it planned to close about 200 High Street branches in the UK and cut 1,203 jobs.
An LBG spokesman insisted a final decision on the closures had yet to be made but admitted Halifax was under review.
Concern about Halifax’s future began when it merged with Bank of Scotland to form HBOS. It was then acquired by Lloyds Banking Group in a catastrophic deal pushed through by Gordon Brown at the height of the banking crisis.
The Prime Minister, seeking to save HBOS from collapse, waived competition rules which would normally have prevented the creation of such a powerful bank. But he later came under pressure when massive HBOS losses destabilised Lloyds – the bank is now 43 per cent state-owned.
Politicians and unions responded angrily to the closure plan, saying it would harm vulnerable communities and threaten the livelihoods of thousands of local retailers.
Many of the outlets targeted are in rural areas, villages and small towns, and will leave customers facing difficult journeys.
Derek French, of the Campaign for Community Banking Services, called it a ‘severe blow’ that will leave the elderly and disabled in the lurch by forcing them to travel further for banking services.
Wendy Dunsmore, of the Unite union, said: ‘LBG is sending an extremely confusing and worrying message to its staff and customers. We are demanding an urgent meeting with the bank.’
The whistleblower said there was internal debate at Lloyds over whether to adopt a ‘big bang’ approach – carrying out the closures in one swoop – or in a ‘phased roll-out’, which would see branches close over a number of weeks and months.
‘In the event, we decided to phase them out to reduce the impact,’ said the source.
But according to the insider, when the news of the first phase, Project Holland, was broken to each manager in June, there was no mention of closures being part of a much wider cull.
Among the reasons given to managers were ‘poor brand representation’, ‘poor customer experience’ and ‘declining transactions’.
The source said: ‘We weren’t giving them the full picture and staff were annoyed by that. I understand some of the managers and agents weren’t fooled and said so.’
Franchisees were made to sign a contract preventing them from allowing a new bank to trade in the building for three months after closure – so Halifax customers were not lured away.
Internal documents include advice to LBG staff on how to handle the closures, with one section cynically entitled ‘High-level story to be used if agents begin to piece the Holland picture together’.
It tells them to inform affected agents: ‘As part of this review, we have identified a small number of agencies nationally, where, due to a number of factors, it is becoming increasingly difficult to maintain the desired service in a profitable way.
‘The decision has therefore been taken to withdraw these agencies. Regrettably this office is one of those where we are looking to withdraw.’
The source said the plan had caused disquiet among many staff.
‘Many of our customers, particularly the elderly, have passbooks and bank in a traditional way. So to take away what is the hub of their community is devastating,’ said the insider.
‘Unsurprisingly there will be a huge drive to retain customers. And to be more specific, it’s all about hanging on to customers with large savings. They are the big prize.
‘Staff have been told to direct people to other Halifax branches, to get them to bank online or by phone or to move to a Lloyds branch. In some cases our staff are asking customers to switch to a Lloyds savings account with a lower rate of interest.’
The news follows confusion over the future of the Cheltenham & Gloucester network, also owned by LBG. In June, Lloyds announced the closure of 168 C&G branches, but earlier this month reversed that decision.
Last week, it was announced that LBG is to cut a further 200 jobs in the group’s general insurance arm, taking total job losses to 7,500 this year.
Lloyds, headed by chief executive Eric Daniels, has been struggling since it bought HBOS last September. HBOS made a loss in 2008 of almost £11billion and the two banks together are expected to make a loss this year.
When The Mail on Sunday put the figure of 550 closures to a senior LBG spokesman, he said: ‘You have got your story to do at the end of the day and you will.’
In a formal statement Lloyds said: ‘Halifax has taken the difficult decision to close 26 agency counters. A strategic review of the agency network is currently under way.’
The spokesman claimed that no branches were under review. But our source insisted: ‘That is ridiculous. We were told there would be small branches among the closures.’