High street banks could disappear by 2032 as UK lenders shut up shop

Lucy Harley-McKeown
·2-min read
Shoppers wearing protective face masks stand 2m apart in a queue for a high street bank in East Ham, east London, as the UK continues in lockdown to help curb the spread of the coronavirus. (Photo by Victoria Jones/PA Images via Getty Images)
Moves towards digital banking hit the elderly, the digitally non-savvy and workers paid in cash particularly hard, groups have said. Photo: Victoria Jones/PA Images via Getty Images

If banks continue to close branches at their current rate, they will vanish from the high street entirely by 2032.

And according to an evaluation by consumer group Which? and Ask Traders — a trading community website — communities of 100,000 or more are already facing a future without physical banks, as lenders continue to evaluate their position on UK high streets.

A move by HSBC (HSBA.L) earlier this month to close 82 stores in its UK footprint was one among a trend over the last six years spotted by UK consumer group Which?.

The bank said it aims to redeploy the vast majority of staff to nearby branches and does not expect any redundancies from the move. The closures will bring the total number of branches to 511 and will be phased throughout the year, it said at the time.

Moves towards digital banking hit the elderly, the digitally non-savvy and workers paid in cash particularly hard, groups have said.

When HSBC made its announcement it pointed out that many of the functions of a physical bank would still be served by Post Office branches nearby.

Still, analysis of data from Which? by Ask Traders found that seven parliamentary constituencies with only one branch left were home to more than 100,000 people.

Wenworth & Deane was among the worst hit, with 99,150 residents — it now has no bank branches at all.

Alongside this, both Erith and Thamesmead in London and North Swindon in Wiltshire have just one branch remaining to cater to more than 110,000 people each, having lost 75% of their branches in the past six years.

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A further seven of the affected areas had just one bank left to cater to more than 90,000 people, the research found.

A flurry of companies have been reassessing working space amid the COVID-19 pandemic. The widespread move to working from home has led to many companies shrinking their office space overheads.

In October, accounting firm Deloitte said it would shut four of its 50 UK offices as it looked at its real estate portfolio in the UK. It retained 500 staff based in those offices on working from home contracts.

Virgin Money (VMUK.L) and Metro Bank (MTRO.L) have also made plans to convert parts of branches into flexible working space, according to the FT. The report also said Lloyds Banking Group (LYG) would begin testing similar measures from October.

A combination of swathes of businesses saying employees will work from home, and downsizing at many firms has left business leaders questioning their commercial office arrangements. This has also brought uncertainty in the property market.

Watch: HSBC to shut 82 bank branches as customers shift online