Virgin Money to close one in five branches in online change

Signage on display outside a Virgin Money store in central London, UK July 27, 2021. REUTERS / Henry Nicholls

  • Banks pull back from Main Street as online banking grows
  • Bank to close 31 of 162 stories in the coming months
  • Virgin Money’s move will cut costs

FRANKFURT, Sept. 30 (Reuters) – Virgin Money UK (VMUK.L) will close nearly one in five branches in the coming months as more customers turn to online banking, the British bank, the latest lender to cut its record-high street presence after the pandemic.

The bank, which had promoted its branches as “community-oriented spaces” to “light up … lives,” said customers’ willingness to bank online or use their cellphones l ‘had encouraged them to reduce their spending.

Announcing the cuts, he said there was a growing desire to use “digital self-service”.

It will close 31 of its 162 branches in the coming months. It will also reduce its offices, a move the bank said would give staff more flexibility around where they work.

Several banks suspended branch closings in the first few months of the pandemic, but several resumed cutbacks.

Earlier this year, HSBC (HSBA.L) announced plans to cut 82 branches. In the second half of 2020, Britain’s largest domestic lender Lloyds (LLOY.L) resumed plans to cut 56 branches and Sabadell TSB (SABE.MC) announced it was cutting 164 branches.

Such closures are controversial because they can harm some customers, who prefer branches to the Internet.

When Clydesdale Bank merged with Virgin Money in 2018, the group had a combined total of 245 branches, but that number will drop to 131 after these latest closings.

Earlier this year, Britain’s Financial Conduct Authority called on banks to rethink measures for branch closures during the pandemic lockdown, fearing it could hurt customers.

Virgin said the closures would trigger a restructuring charge of 25 million pounds ($ 34 million) in the fourth quarter. It will also reserve a charge of £ 20million for the reduction and modification of its offices.

The bank said its restructuring charges for 2021 as a whole will now total £ 145million.

($ 1 = 0.7311 pounds)

Reporting by John O’Donnell Editing by Rachel Armstrong

Our Standards: Thomson Reuters Trust Principles.

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