Cheltenham & Gloucester Branches to close

[DJ Barry Hammond]

Guardian Link - ooooh, yes a posh paper!

Fury as Lloyds closes Cheltenham & Gloucester branches and cuts 1,660 jobs• All 164 branches of the 160-year-old building society to close

Graeme Wearden and Jill Treanor guardian.co.uk, Tuesday 9 June 2009 14.08 BST Article historyLloyds Banking Group provoked a furious reaction from unions and MPs tonight over its plans to shut all 164 Cheltenham & Gloucester branches and cut a further 1,660 jobs.

The decision, which came on the day the taxpayer's stake in the bailed out bank rose temporarily to 45.74%, takes the total job cull at the UK's largest high street bank to more than 4,000 since it was created in January by Lloyds TSB's rescue of HBOS. Further job cuts, as many as 25,000, are expected from the combined 140,000 workforce during the three-year integration.

The entire C&G network is to close by November after more than 150 years and more than 15 years after the Gloucester-based building society was taken over by Lloyds TSB.

The sudden move prompted speculation that Lloyds was trying to head off a move by the EU, which the bank had already warned could demand drastic sell-offs of parts of its operations to counter concerns about anti-competitiveness.

The Unite union attacked the decision as "nothing short of disgraceful". Its general secretary, Derek Simpson, warned that closing the C&G network would "rip the heart out of hundreds of local communities up and down the country". Unite also said today 500 staff at RBS have been told that they are at risk of redundancy as part of an existing job cut programme.

John McFall, chairman of the Treasury select committee, told MPs Lloyds had betrayed "the dignity of the workforce". He urged Treasury secretary Kitty Ussher to "join me in writing to Cheltenham & Gloucester to ensure that people are treated properly when it comes to being unemployed".

McFall was particularly furious the job cuts had been leaked, leaving the bank scrambling this morning to inform staff of the plan drawn up by Helen Weir, who is responsible for retail banking.

About 1,000 employees will lose their jobs as a result of the C&G closures, while the bank is cutting 265 positions across its personal loans division, which will lead to job losses in Chester and Cardiff, with other jobs also going across its retail, personal finance and mortgage sales operations.

Intelligent Finance, a brand launched to much fanfare by HBOS at the height of the dotcom boom, is to be closed to new mortgage business.

Lloyds said compulsory redundancies would be "a last resort". Weir said: "We will work through these changes carefully and sensitively and continue to consult closely with our unions throughout."

She stressed C&G would continue to be used as a mortgage brand through brokers, alongside Birmingham Midshires, Halifax and Scottish Widows. For the first time, Bank of Scotland will start to sell its own-brand mortgages in its branches, rather than those of the Halifax, the country's biggest mortgage lender.

The enlarged bank is operating a multi-brand strategy, although it is dropping the Clerical Medical name, which was part of HBOS. This is unlike the Spanish bank Santander, which recently announced plans to unite Abbey, Alliance & Leicester and Bradford & Bingley under its red flame logo.

The taxpayer stake in Lloyds yesterday rose to more 45% after the Treasury pumped in a further £1.7bn to enable the bank to exchange preference shares for ordinary shares, although the stake will slide back to 43% once the "rump" shares from the placing are sold. In the process some £2.3bn was repaid to the taxpayer.

Simpsonsaid: "UK taxpayers have not poured billions of pounds into this organisation just to see it sack thousands of hard-working people. This is truly a dark day for the financial services sector in this country."

Alex Potter, banking analyst at City broker Collins Stewart, said the closures could be a "sop" to the regulators, even though Gordon Brown allowed UK competition rules to be broken when HBOS was rescued.

The EU has yet to pronounce on the deal. "There are still antitrust concerns about the Lloyds-HBOS merger at commission level," Potter told BBC Radio 4's Today programme

[DJ Barry Hammond]

This is not good, with long standing names like Alliance + Leicester, Bradford & Bingley, Cheltenham & Gloucester and with Britannia merging into the

Co-operative, that is 4 fairly major players disapeering, all of them former Building Society's.

Considering how the banks got themselves in such a mess in the first place, you'd have thought the thinking of the original mutual was the way to go at the moment.

[Edmund]

I think the taxpayer should bail them out

[DJ Barry Hammond]

I think the taxpayer should bail them out

Well didn't the goverment assist Lloyds in the 'purchase' of the RBS - clearly Lloyds were sold a led balloon!

[Guest]

Yes, where are Matt and Thracian in this thread? Or does their inverted snobbery mean they don't give a shit about non-manufacturing job losses?

[Edmund]

Yes, where are Matt and Thracian in this thread? Or does their inverted snobbery mean they don't give a shit about non-manufacturing job losses?

Don't provoke them

Awaits Thracian's controversial rant <_<

[Tommy G]

Nevermind, it's helped bump the share price of Lloyds up the past couple of days so thats £££££££ for me

[Monk]

It's disappointing but from a cost cutting perspective I can see where Lloyds are coming from. Feel sorry for the branch staff, there will be many who have worked for decades for them and it'll be a real kick in the teeth.

[Matt]

Correct me or not, weren't Lloyds given help a few months ago? Weren't they bailed out to some extent?

Cheltenham & Gloucester being part of the Lloyds group.

Besides although i'm out of work from my previous company anyway, if I was still in work this could indirectly have effected me anyway as I was working for a shopfitting company - Doubt we'd have had the contract anyway but when I was working there we fitted the odd bank out so potentially would have effected me and my work.

P.s - Lease, give us a chance, I do spend quite a lot of time on here, but not all day, every day.

[Matt]

West Bromwich Building Society is set to become the latest financial institution to enjoy a Government-sponsored bail-out, according to an unsourced report from the BBC's Robert Peston.

The society - which has 46 branches primarily in the West Midlands - had last month denied that it was on the verge of collapse.

However, it is now expected that some form of rescue for the society will be announced within days.

That could either see it broken up, with savers transferred to another building society and other assets assumed by the Bank of England under the so called "Special Resolution Regime".

Alternatively, the Financial Services Authority and Treasury could step in to protect the debt provided by investors and other financial institutions, allowing West Brom to either merge with another society or, less likely, continue as a standalone institution.

Official Government spokesmen refused to comment while the society's communications team did not return calls.

However, the news comes amid growing concern about the way such Government interventions to prop up creaking financial institutions have been allowed to leak out despite pledges by Prime Minister Gordon Brown to institute a new era of openness and honesty in the wake of the MPs' expenses scandal.

Last month, West Bromwich had its credit downgraded by ratings agency Fitch, which cited the weak economy and increased risk of building societies defaulting. Despite this the society has maintained that it is a "safe and secure" home for its members savings.

In a statement on 17 May, the mutual said: "The Board of West Bromwich Building Society believes that the Society is well capitalised, able to meet all its obligations in full and has a long-term future as an independent mutual society, providing a safe and secure home for its members savings and serving the local community."

Several building societies have had to be rescued as a result of the ongoing effects of the credit crunch. Nationwide - by far Britain's biggest building society - has stepped in with takeovers of the Cheshire and Derbyshire building societies while Leeds based Skipton Building Society swallowed up the Scarborough Building Society.

The Chelsea and Catholic societies have merged while the Yorkshire rescued its smaller rival in Barnsley.

West Brom employs 850 staff, whose jobs could be put at risk by any change of status and 350,000 customers. Like many financial institutions it has found it difficult as a result of drying up of wholesale money market funding that backed many mortgage products.

The company was also active in the buy to let market, that has been particularly badly hit by the credit crunch and where re-possessions are running at around three times the level of those affecting ordinary mortgages.

Jobs saved for once by the Government, so they can give grants and support.