When the Halifax shut its doors in the West Yorkshire town of Horbury last July, 10,000 residents were left without a bank nearby. The move caused anger among locals, especially businesses, who were forced to travel to Wakefield or Ossett, about three miles away, to visit their nearest branch.
It's a tale that has been repeated across Britain as high-street banks have slashed costs and reduced their networks by almost half in the past two decades. The withdrawal has left almost 1,000 communities with no banking services at all.
But in the case of Horbury the story is set to have a happy ending because the residents have won their battle to have a bank brought back to the town. More than 1,000 of them, or one in 10 of the population, signed a petition asking the Co-operative, which already had a food store in the high street, if it could provide essential banking services. After such a massive community campaign, the Co-op agreed and a bank branch is returning next month.
"Getting a bank back in Horbury is really good for the town," said Ray Tindale, a Horbury pensioner who was hit by the banks' departure and signed the petition. "Most banks are making savings by getting rid of banks in small communities like ours, and the Co-op is filling this gap. Customers still want a local, friendly face that they can have a conversation with – they want a personal service. It will also help investment in Horbury, because if people withdraw money here they are more likely to spend it in the town."
The strength of feeling in Horbury was such that a meeting held last week to introduce the Co-op's new bank manager, Karen Rayner, attracted 100 people. "There is already a real sense that people need these services and there's been a lot of interest," she said. Banks close branches for a variety of reasons. The high number of mergers and takeovers of former building societies is one reason to cut back, and does account for a high proportion of the 7,388 closures in the past 20 years.
But lenders have also been quick to close outlets if they become "uneconomic", which is shorthand for "not making enough money". Such closures can be short-sighted – because disaffected customers simply take their accounts elsewhere.
The Co-operative Bank clearly hopes its move into Horbury will help it pick up new customers although, as it already has a presence in the town through its supermarket, there is also an element of giving loyal customers what they want.
Rod Bulmer, the managing director of retail at Co-operative Financial Services, said the mutual was keen to open more branches like Horbury. "While other major banks are being forced to close branches, and communities are being left without banking facilities, we're in the fortunate position of being able to open new ones,"
The Co-op is a year into a programme of introducing new in-store branches. Its plan is to increase its branch network of 344, which includes Britannia branches, to 500. Five in-store branches are already up and running at Hove and Peacehaven in East Sussex, Matlock in Derbyshire, Wickford in Essex and Marple in Cheshire. This week, the sixth branch opened at Holmfirth in West Yorkshire. Frances O'Dwyer, a Holmfirth resident, said: "I've been thinking of switching for a long time from my current bank and I like the ethos of the Co-op."
The beauty of the Co-op's move is that it already has a presence through its 3,000 supermarkets so doesn't have huge costs. It is more a question of identifying where there is a need – and space – for a branch. However, that doesn't mean new branches are simply crammed into a corner by the meat counter. In fact, they offer full branch banking facilities with Horbury, for instance, having four staff. "We are looking at an ambitious expansion of in-store banks to grow our high-street presence and give customers a compelling alternative to the big five banks," added Mr Bulmer. "We are committed to providing personal banking in the most convenient way to customers and to expand the availability of our services across the UK."
That's good news for hundreds of thousands of people who currently have no bank within walking distance. With Tesco set to ramp up its banking services soon, and the Post Office's People's Bank in the offing, credible alternatives to the traditional lenders are finally emerging.
17,292 The number of UK banks in 1990
9,904 The number of branches in January 2010 – the latest figure available from the British Bankers' Association. There have been further closures since then
7,388 Branches closed in the 1990s and 2000s
-45% Reduction in the size of the branch network since 1990
950 Communities without any bank presence, according to the Campaign for Community Banking
170 The number of branches for every one million inhabitants in the United Kingdom
1,010 The number of branches for every one million inhabitants in Spain. In France the figure is 440, in Germany there are 480 branches per one million people, and in Italy it's 570