View from City Road: Bank balance in jobs is tricky

The job cuts at NatWest are not quite the same as a coal mine closure, with employees outside the gate at 5pm on a cold Friday afternoon. Although the job-for- life principle has long gone and forced redundancies are now on the agenda, the banks still have the flexibility to ensure that most of a job reduction programme is by natural wastage, early retirement and voluntary redundancy schemes.

Whether the banks achieve the right balance is another matter. Midland certainly regretted the success of its early-retirement programme for more experienced managers, and the terms were so good it found it impossible to tempt any of them back when it turned out that their experience was in short supply after all.

At the other end of the scale, it is hard to recruit good young entrants when they see large numbers of junior employees stuck for years in repetitive processing jobs and leaving disillusioned. A shift to temporary workers has made the image of banks as employers still worse.

Nevertheless, it is hard to argue with the drive for greater efficiency at a time when low interest rates are removing the windfall element in bank profits and the computer and telephone are changing the way banking services are delivered.

But there is a limit. Telephone banking may peak at anything from 20 to 40 per cent of the market but that will leave a large chunk of business best sold through high-street branches.