Banking union Bifu attacked the branch closures as a "horrendous number, and wholly unnecessary".
Noel Howell, a Bifu spokesman, said that TSB had informed the union that the first 71 branches to be closed from the beginning of 1995 to the end of April contributed £10m profits to the bank. The first 71 closures would involve 300 job losses and would affect 200,000 customers, Mr Howell said. "Why close branches that are profitable?" he asked.
Sir Nicholas told the TSB's annual general meeting: "We do not like doing this but the fact is that some branches can never expect to make a reasonable return on the capital invested in them. Fewer customers use branches than used to...We still have 1,200 branches and a process of carefully judged amalgamation and closure must continue if we are to have the resources to provide a first-class service to customers, while maintaining shareholders' rewards for risking their capital.
Mr Howell said last night: "There's nothing carefully judged about closing 200 branches in a year."
The TSB chairman sought to reassure shareholders that a Barings-style derivatives disaster could never happen to the bank. For the first time the annual report detailed TSB's internal control systems. "There is a strong control culture in place," Sir Nicholas said.
TSB has been the subject of continued speculation because of its declared interest in buying a building society. Sir Nicholas said: "We will build on the group's streams of income and we will keep a careful eye on the opportunities to acquire other businesses which would add value to our existing businesses - and by that I mean value for shareholders."