RBS chief executive defends branch closures

The chief executive of the Royal Bank of Scotland has defended its closure of Scottish branches, saying mobile banks serve 440 communities.

Ross McEwan was responding to campaigns against the closure of 52 branches this spring.

A further 10 of the most remote rural branches are under threat and their usage is being reviewed.

His comments came as RBS reported a profit of £792m for the first three months of the year.

That was up from £259m for the same quarter last year.

Mr McEwan said the moves were in response to customer choices.

The first quarter of this year saw branch transactions down 7%, the use of cheques and cash machines both down by 17%, while downloading of the bank's digital app is up sharply.

As a result, more branches which are currently part of the Williams & Glyn network are expected to be closed.

Mr McEwan said the 10 more rural Scottish branches are being reviewed until the end of the year, though the company doing that work is not now able to do it, so another firm will have to be found.

Facing criticism that mobile banks do not stop long enough, Mr McEwan said some will be at a location for 15 minutes, but that can be extended if it is found that there is sufficient demand.

He said: "There are 440 communities that we get to every week. This is what people miss.

"This is a big network we've created. It just doesn't happen to be a branch in every village."

He added that it was now possible for NatWest customers to use RBS systems and vice versa.

With publication of the Royal Bank's first quarter financial results, Mr McEwan said there will continue to be cuts as the bank reduces the ratio of cost-to-earnings from 60% to below 50% by the end of next year.

A further review of more than 300 branches across the UK which are part of the Williams & Glyn network is planned.

It was to be split from the main bank, but after those plans failed, it is to be retained. That network has not had a branch review for nine years, and Mr McEwan said many of the branches are close to RBS or NatWest branches.

Mr McEwan said costs would also be cut as the bank outsources data centres to firms that can do that work more cheaply.

The bank is also restructuring its investment bank operations to reduce costs, and offloading office space, including the Bishopsgate office which has served as its London head office.

The Unite union has called for a moratorium on RBS branch closures following the publication of the latest financial figures.

The union's deputy Scottish secretary Mary Alexander said: "Here we have it in the black and white on the RBS balance sheet - RBS is rolling in profits.

"Surely now it's time for the bank to call a moratorium on the axe hanging over 62 branches in Scotland. After all, this is now a totally different situation profit-wise to when the plans were made to close one in three branches.

"What is the point of closing 62 branches to save next to nothing in the grand scheme of things against profits of three quarters of a billion pounds in three months?

"Time to call a halt to the closures to save the communities which stand now to face an economic whirlwind."

Meanwhile, Santander has said it will shut another six Scottish branches this year, in addition to the four closures it announced in December.

The Spanish-owned bank will close four branches in Glasgow in November, along with those in Milngavie and Lockerbie.

Next month, Santander will close branches in Linlithgow and Eastwood, as well as two in Edinburgh.