Britain's banking system is restructuring at a ferocious rate. Nearly a quarter of all jobs in the sector have gone over the past 10 years, as banking chiefs have lopped off excess branches on the high street.
Sir Brian Pitman, chief executive of Lloyds, compares this process to the shakeout that British manufacturing underwent in the early 1980s.
Lloyds Bank's takeover of Cheltenham & Gloucester building society signals the spread of the rationalisation to the building society movement.
It appals unions such as the Banking Insurance and Finance Union.
Alan Piper, assistant general secretary of Bifu, said: "The job losses are a scandal. They penalise the staff of the banks, and the branch closures penalise the customer. All this is happening while top pay increases are going up by huge amounts."
The culprits are new technology, deregulation and increasing competition.
The number of branches has plummeted by 2,500 in the past five years, while the number of automated cash dispensers has soared.
Thus the number of bank cashiers needed has fallen. The rise of telephone banking has also contributed. Pioneered by Midland Bank's First Direct, all the high street banks are now peddling their own versions. This has further diminished the need to have staff in local branches.
The Thatcher government opened the door to the shakeout by sweeping away regulations that prevented building societies and life companies from competing with banks on their own turf.
Ironically, the increasing profitability of the building societies, coupled with their historically low cost levels, has led to them either converting to become banks, or being bought up by the banks themselves.
Abbey National was the first to convert from a building society to a bank in 1989 under new legislation.
It can now raise finance cheaply on the international money markets in the same way as the banks, instead of having to pay relatively high rates of interest to savers.
The newly merged Halifax and Leeds will convert to become a bank in about two years' time, creating a huge new competitor to the banks on the high street.
Indeed, while the traditional banks have been shedding staff and branches since the late 1980s, a similar, savage shakeout is likely in the building society sector once they convert to plc status and have to answer to shareholders.Reuse content