Lloyds branch closure in UK market town sparks warning bank is 'not by your side'

A Lloyds bank branch closure in a UK market town has sparked an MP to warn the lender is "not by your side". Locals in Penzance, Cornwall, campaigned to keep the bank in the town's Market House, but it closed in January.

Andrew George, Liberal Democrat MP for St Ives, accused Lloyds' bosses of turning their back on customers who want face to face banking.

He told the Daily Express: "They wanted the public to come to their aid in the financial crisis, but turn their backs on them when it suits them. Lloyds say they're 'by your side' in their ad campaign, but they're not. They're miles away in London. They're anything but 'by your side'. It's very frustrating."

During the 2008-09 financial crisis the government pumped over £20billion into Lloyds. The bank paid the taxpayer back and said it made almost £900million in profit for the public purse.

Since the crisis, banks and building society branches have been disappearing from Britain's high streets at an alarming rate.

Lenders argue this is because more customers are opting to bank online while critics say closures limit access to cash and replacement community bank hubs fail to cover all the services people want.

Mr George said locals in Penzance who want to visit a Lloyds in person now face an hour-long journey to Truro, where he said the bank's last remaining branch in Cornwall is located.

He dismissed Lloyds' efforts to protect in person access as a "façade". The banking giant offers face to face support from a community banker on top of access via the Post Office and banking hub.

The MP, who is chairing a meeting in Parliament on bank closures on Thursday, said the venues where alternatives are offered lack privacy and some services, such as probate and business cashing, are completely unavailable.

Mr George said: "MPs can see the impact [branch closures] is having on communities and the digitally excluded. But we're on their case. They have pushed this very far and moved very quickly in their closure programmes.

"Parliament is watching what's going on and urging the Government to take stronger action so there is a network of financial institutions which are accessible to people geographically and not just online. It's time for the Government to start putting down lines."

He said that in Lloyds' case, the bank should be compelled to reopen closed branches, adding: "I'm not convinced by bank hubs. It's a dumbed down service in terms of the range and capacity of the services available."

Figures from Which? show Lloyds has closed 535 branches across the UK since January 2019 and is closing 76 more. Barclays closed 849, Santander 405, TSB 375 and NatWest 371, among others.

Currently, the Financial Conduct Authority (FCA) watchdog has powers requiring banks and building societies to plug gaps in access to cash. But the FCA leaves it to lenders to assess whether communities have enough access to branches and ATMs.

Mr George said this was "toothless" as it left banks and building societies to effectively mark their own homework.

He said: "The FCA needs to recognise there are some customers who prefer to bank in person, are not digitally enabled and need a more human relationship with their bank."

A FCA spokesperson said: "Our rules mean banks can’t close a branch unless people can still withdraw and deposit cash locally, with any major gaps plugged first.

"We also expect banks to support customers who need help using digital services. However, our powers don’t extend to preventing branches closing."

LINK is responsible for weighing up cash access when a branch closes under a process supervised by the FCA. Rules governing access to cash are expected to come up for review later this year.

Mr George urged Lloyds to worry less about their shareholders and prioritise its offering to the public.

He added: "Lloyds have certainly decimated their bank branch network in Cornwall, but not all banks have done that. We do still have banks available and need to do what we can to protect them and make sure they are there for people."

A Lloyds spokesperson said when the bank closes a branch, it gives "direct, bespoke" support to "vulnerable" customers, based on individual circumstances.

They added: "We're supporting our customers in Penzance with a range of options for everyday banking in the community.

"Our customers can visit our local Community Banker for face to face support, as well as a Post Office or Banking Hub for their everyday banking.

"They can also deposit cash at over 30,000 PayPoint locations, as well as accessing our app, online and phone services."

HM Treasury has been approached for comment.