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LONDON, Jan 28 (Reuters) - Britain's financial watchdog on
Thursday told banks to rethink planned branch closures in a
warning to lenders seeking drastic cuts to patch up
pandemic-dented finances.
The Financial Conduct Authority (FCA) said banks should
consider the impact of national pandemic restrictions on their
ability to comply with regulatory guidance on branch closures,
including consulting customers affected.
Last September's FCA guidance on branch and cash machine
closures sets out how banks should assess customer and business
needs by considering what alternatives are available.
"Some banks and building societies have informed us that
they are either going ahead with branch closures already
announced, or announcing new branch closures during the current
lockdown," the FCA said in a statement.
"We are concerned that these activities could have
significant consequences for customers. It may be harder than
usual to reach all customers under the current restrictions and
engage with them on closure proposals effectively."
HSBC this month said it plans to axe 82 branches in
Britain after a drop in footfall and a surge in digital banking,
though it said the trends predated the COVID-19 pandemic.
The bank gave no immediate comment on the FCA's statement on
Thursday.
Several banks paused branch closures in the early months of
the pandemic before resuming cutbacks. In the second half of
2020 Britain's biggest domestic lender, Lloyds, resumed
plans to cut 56 branches. Sabadell's TSB, meanwhile,
announced it was axeing 164 branches.
"We want firms to review their plans against our existing
guidance and ensure that they continue to comply with our
principles," the FCA said.
"Where firms consider it is appropriate to continue with
plans during this period, we expect them to have considered our
guidance and be able to demonstrate how they’ve taken the
concerns and expectations set out in this statement into
account."
(Reporting by Huw Jones and Iain Withers
Editing by David Goodman)
