Co-op forecasts 150,000 more bank posts cut

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The Independent Online
A further 150,000 jobs will be cut by high street banks over the next five years, according to Co-operative Bank's managing director, Terry Thomas. This is more than double the figure suggested recently by Brian Pitman, chief executive of Lloyds Bank.

Mr Thomas, whose own bank has announced a two-year moratorium on compulsory redundancies as part of its latest pay round, said Mr Pitman had probably minimised his estimate because of the likely anxiety it would provoke among Lloyds' staff.

"By the turn of the century another 100,000 to 150,000 jobs will have gone, because of the cost of bank and building society branches," Mr Thomas said.

"It doesn't take a genius to work out. Banking will be available by phone, cable and satellite. It's just common sense. I can't understand why everyone is surprised."

The Co-op has run a high-profile advertising campaign, highlighting its ethical stance on investment. Although the bank has cut 1,000 jobs, just under a quarter of its headcount, Mr Thomas does not expect further significant job cuts.

Over the past 10 years Co-op has nearly doubled its branch network, from 75 offices to 135. "We bit the bullet early on. Now we are penetrating the market and need the people we have," Mr Thomas said.

Bifu, the banking union that has been loud in its condemnation of job losses in the industry, was incredulous at Mr Thomas's new estimate yesterday. A spokesman, Noel Howell, said: "I think Mr Thomas must be talking out of the wrong end of his phone.

"People see phone banking as an adjunct to going to a branch. If banks go on closing branches, service will fall and there will be a customer backlash. Customer complaints are already at an all-time high."

Mr Thomas was unabashed: "Just look at what has happened to the steel and coal industries in this country over the past 20 years.

"You either sell something at a price which people are willing to pay or you end up without a job. Why should banking be any different?

"Nobody owes us a living. Yes, there will be a customer backlash if branches go on being cut, but people will be willing to pay for quality of service."

Bifu said that more than 115,000 jobs had already been lost among banks, building societies and insurance companies over the past five years, under the pressure of competition, cost-cutting and new technology. The current total headcount for this core financial sector is about 600, 000.

Mr Howell said Bifu was particularly worried by the prospects for big cuts by building societies that have recently merged, as well as insurance companies retrenching.