TSB to close 80 branches in 2020 as part of £100m cost-cutting plan

·Finance and news reporter
A TSB branch in Holborn in London
A TSB branch in Holborn in London. Photo: Tim Ireland/AP

TSB on Monday said that it would close 82 branches across the UK next year as part of a newly unveiled three-year £100m cost-cutting initiative.

The move, TSB said, would “restore the bank’s competitiveness through a relentless focus on better serving its customers”, but could put up to 400 jobs at risk.

TSB, which is owned by Spanish banking group Sabadell (SAB.MC), said it currently had “more than double the UK average” number of branches per 10,000 customers. Over the course of 2020, its branch network would be reduced from its current total of 540 to 454, it said.

The bank had already announced that four branches would close this year.

The decision follows what TSB calls a “detailed review and analysis” of the network.

The bank said it would invest in self-service machines in branches, and in its flagship branches, which it said would be the “right locations to meet customer demand”.

While TSB said it would invest £120m in building the bank’s digital channels, the overall cost-cutting plan would save as much as £100m by 2022, it said.

TSB currently employs around 8,000 people in the UK. Hundreds of staff will likely be affected by the closure of the 82 branches.

“The new purpose-led strategy sets out a transformation programme for the bank to become a simpler organisation to compete effectively, with deeper customer relationships and a better balance of customer channels,” TSB said.

TSB in July reported a pre-tax profit of £21.1m for the six months to the end of June, signalling that it had bounced back from its 2018 IT meltdown.

In the same period in 2018, the bank made a £107.4m loss as a result of the IT problems.

Other banks, such as Lloyds and RBS, have also reduced their total branch count and funnelled money into digital efforts, in the hopes of warding off newer online-only challenger banks like Monzo, Revolut, and Starling.

“The plan we’re sharing today involves some difficult decisions, but it sets TSB up to succeed in the future,” said TSB CEO Debbie Crosbie.

“Taken together, these changes will help us to serve more customers, better, for the long-term.”