Should banks inform Gov sooner about branch closures?

Thursday 24 October 2024

A new "framework" which would see banks obliged to give the Government and islanders more notice about possible branch closures could be explored by the Minister in charge.

Deputy Montfort Tadier pressed External Relations Minister Ian Gorst – who also has political responsibility for financial services – on the matter in the States Assembly this week.

Deputy Tadier was one of five St Brelade politicians who signed a letter to Lloyds Bank after their recent announcement that its branch in the western parish would be closing in December.

Deputy Jonathan Renouf – another of the St Brelade coalition – said the group met Lloyds representatives for an "open and frank discussion" about the reasons for closure and mitigation measures, but their bid ultimately failed, meaning that HSBC in Les Quennevais will soon be the only remaining bank branch outside of town.

Deputy Ian Gorst previously told Scrutiny there was very little the government could do to force banks to keep branches open when their footfall is declining.

Pictured: Deputy Gorst also has responsibility for Financial Services and banks.

He further said this week that no memorandum of understanding – a nonbinding agreement which states how parties will act – exists between banks and the Government regarding announcements.

Deputy Tadier asked: "Would it be reasonable to perhaps revisit what might be put into a memorandum of understanding, especially in the context of recent branch closures that have been announced, so that Government will have a 'no surprises' policy and that there should be as long a notice period as possible between a bank knowing about a closure and informing the Government and its customers?"

Deputy Gorst said a 'no surprises' policy was already in place, and he was informed several days before the public announcement.

He added: "I am not aware that there is anything the Deputy is requesting that we couldn't come to an agreement with Jersey Bankers Association on.

"There is a 'no surprises' policy already, and the Government is informed of these situations as they are evolving, but these can happen quite quickly based on commercial reasons.

"That said, I'm sure we could have conversation with the Jersey Bankers Association to agree a framework within which announcements could be made, the public would be informed, Government would be informed, which would be an extension of what is already in place."

Pictured: the closure of the branch will affect many islanders in western parishes.

Lloyds has blamed a fall in customer transactions of almost a third between 2018 and 2023 in its announcement of the closure last month, and said customers could use its Broad Street branch and continue to bank with them using online, mobile and telephone banking.

It further said it was contacting customers to let them know about the "alternate local banking services available".

Age Concern said the decision would hit those with mobility problems hard and accused the bank of putting the interests of its shareholders and management ahead of those of its customers.

Deputy Renouf has since called on the Government to create a Customer and Local Services "hub" at Les Quennevais, "which could provide a local point of contact with access to government services some days of the week and bank staff on other days".