A&L to shut one in seven branches

Alliance & Leicester, one of the UK's medium-sized mortgage lenders, will close one in seven of its branches, with a possible loss of 310 jobs, following a slump in the number of customers going into the bank's high street network.

Alliance & Leicester, one of the UK's medium-sized mortgage lenders, will close one in seven of its branches, with a possible loss of 310 jobs, following a slump in the number of customers going into the bank's high street network.

A&L, which is struggling to make headway against its larger competitors, said just 1 per cent of its customers were using the branches which will be closed from 1 October this year.

Most cuts will be to branches in London and the South-east, though there will be other closures across the country.

A&L said it was taking this opportunity to cut costs from the branch network by about £5m a year because customers were increasingly carrying out transactions over the internet and telephone.

Less than 3 per cent of total sales were carried out in the branches earmarked for closure - which make up 15 per cent of its total network. Overall, A&L said it was now opening 34 per cent of new current accounts via direct modes, such as over the telephone. That compared with the industry average of just 9 per cent.

Richard Pym, chief executive of A&L, said: "Times are changing. British banking customers ... are finding it more convenient to use the telephone, the internet and cash machines for regular transactions, and are increasingly looking at branches as places for more complex issues."

A&L is the latest bank to make cuts in its branch network, built up over 100 years and comprising a large element of the fixed costs of the retail banking operation. It will close 46 of its 300 branches.

Barclays attracted massive opprobrium in 2000 when it shut 171 branches. Northern Rock last year announced the closure of 20 small branches but said it would open 10 sites in major cities.

A&L's own trade union for staff expressed dismay at the possibility that 310 jobs would be cut, including 111 full-time roles. Clare Clark, the general secretary, said: "Staff are shocked and angry at the way the company is handling the proposed closures."

A&L said it would try to find new roles for many employees. It was still committed to having a branch network, it added, and would invest £35m in improving remaining branches.