JEFF PRESTRRIDGE: With the Lloyds Banking Group announcing plans to close another 44 branches, we need joint banks NOW
Closed doors: Joint banks would revitalize communities across the country
Bank closure of branches is all too common. Last week it was the turn of the mighty Lloyds Banking Group to sharpen their corporate ax in preparation for a round of branch trimming.
44 branches of the Halifax and Lloyds brands would be closed permanently this year, with the bank blaming the decline in customer usage for their demise.
Sad as it is, Lloyds’ decision to wield the ax comes as no surprise. It has by far the largest branch network of any traditional bank, double that of rivals Barclays and NatWest, so a round of circumcision was inevitable. I’m surprised it was only 44.
Earlier this month, I reached out to Lloyds about a tip I had received from a good source that the bank was working on a much broader shutdown program – one that would result in up to 700 branches (almost half of their entire network ) across their network will be closed Bank of Scotland, Halifax and Lloyds.
I was told the tip was not true, so I backed off, although of course I was not informed of the ongoing plan to close 44.
A radical shrinking of the Lloyds branch network does not seem to be in sight in the short term, but I would bet that the UEFA European Football Championship will take place in Germany by 2024 (incidentally, good luck England this Tuesday in the second round of Euro 2020) the network will become one Be the shadow of yourself in 2021. Half its current size is my guess.
One final point on Lloyds’ branch extermination. In trying to add some shine to the closures, it pointed out some of the good things it does to keep bank customers cute. That includes providing cashback opportunities at around 500 retailers across the country, an exclusive story we released late last year – and helping with community banking trials.
Although there are only two branches involved in this process – one in Rochford, Essex, the other in Cambuslang on the outskirts of Glasgow – it is now evident that such community banks are the answer to the decline of the single brand branch.
Over the past few months we have visited both Rochford and Cambuslang and have been overwhelmed by the positive impact these (Post-managed) branches have had on their local community, retailers and small businesses.
Customers of all major banks – business and private – can use it to deposit or withdraw cash. Representatives of individual banks are also on site on selected days to discuss needs. Community banks that are supervised by Swiss Post and where the running costs are borne by all major banks are the way forward.
If Lloyds, Barclays, NatWest, Santander, and HSBC financially supported a nationwide rollout of such banks, it would revitalize communities across the country – especially those who have lost all of their banking facilities. It would also take the heat away from banks every time they close another 44 of their own branches.
Open-ended real estate funds that are not useful
Open-ended real estate funds are not useful investment instruments. It’s investment accidents waiting to happen. Everyone knows it, but until recently nobody in the investment industry really wanted to admit it.
But last week’s announcement that both Aviva and Aegon are closing their real estate funds for good – more than a year after they ceased trading – is certainly the beginning of the end. Further closings will follow.
It’s just illogical for investment managers (as smart as they are) to offer investors a fund that invests in illiquid assets (offices, shops, and industrial units) knowing that any rush to the exit gates leaves them no choice, than to prevent them from going away.
Because, in contrast to a company participation, a commercial property cannot be liquidated quickly enough to generate the necessary liquid funds to return their money to departing investors in a timely manner.
All of this takes time and leads to widespread uncertainty among investors.
The earlier open-ended real estate funds are hit on the head, the better. Your time was and is over.