100 bank branches to be axed

A HUNDRED branches of the Yorkshire Bank and the Clydesdale Bank are to close following a review by their parent company National Australia Bank.

The banking giant unveiled details of 4,000 job cuts overnight in Australia as part of a worldwide restructuring operation that will see one-fifth of its branch network close in the UK.

The move, which was predicted by Financial Mail on Sunday and This is Money last weekend, means that 60 of the group's 217 Clydesdale Bank branches and 40 Yorkshire Bank outlets will close and some 50 rural communities in Scotland and the North of England will lose their local branch.

NAB said two months ago that it was planning to reorganise its UK operations as part of a £117m cost-saving exercise. Other changes will see it focus increasingly on the lucrative south east around London. It plans to open 12 new branches in the M25 region and convert 50 Clydesdale and Yorkshire branches into flagship High Street banking centres.

Despite these changes, the scale of the branch closures will take many in the industry by surprise. Union leaders fear that the move could spark further closures by rival banks, particularly Barclays and Lloyds TSB, which both have large numbers of underperforming branches.

More than 6,000 bank branches have been closed in the UK since 1990. Customers who lose out from the loss of their local branches may be forced to rely on automated cash machines to get access to their money.

NAB is to take an A$266m provision to pay for the 1,700 redundancies it has ordered in the UK. Its half-year results show a 13% drop in earnings from A$1.85bn to A$1.6bn. The bank is recovering from losses sustained in a foreign currency options disaster last year which claimed the scalp of its chairman, chief executive and several other directors.

Several foreign exchange traders at NAB were charged earlier this year for their part in the scandal. Two men were charged with using their positions dishonestly to gain advantage while two other men face deception charges.

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