Yahoo Finance Royal Bank of Scotland to Close 180 Branches in UK, Ireland
Of late, the banking industry has been increasingly pursuing restructuring measures, with services being more electronically inclined. Recently, Edinburgh-based The Royal Bank of Scotland Group plc RBS declared its plans to sell around 180 UK and Irish branches, along with retrenching 690 jobs, per a Bloomberg report.
The potential moves are expected to result in considerable cost savings. Chief Executive Officer of Royal Bank of Scotland, Ross McEwan, has planned to trim operating costs by 2 billion pounds ($2.5 billion) over the next four years. Such a move is anticipated to make the bank profitable again.
Per the report, the bank is planning to shut down 128 branches in the NatWest and 30 units in the UK. Further, 22 branches are expected to close at Ulster Bank in the Republic of Ireland. The plans come as part of Royal Bank of Scotland’s review on customers’ choices and usage patterns throughout the bank’s network, and across all distribution channels.
Though more than 1,050 employees will be unemployed on branch closures, 360 employees will be moved to other positions.
“As customers change the way they bank with us, we must change the way we serve them,” RBS said in an emailed statement. “While the branch will still be a core part of our offering to customers, inevitably some branches will have to close,” it further noted.
As banks continue to face revenue challenges in the current low-interest rate environment, cost-cutting initiatives have gained priority to boost the bottom line. Banks have undertaken several cost-cutting measures, including branch closures. Notably, branches are gradually becoming less important as customers prefer to connect with banks through the Internet and mobile phones. These modes of communication not only save time for a customer, avoiding physical visit to the branch, but also save the bank’s costs.
Shares of Royal Bank of Scotland gained 30.4% over the last six months, outperforming 16.2% growth recorded by the Zacks categorized Foreign Banks industry.
Royal Bank of Scotland currently carries a Zacks Rank #3 (Hold).
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Royal Bank Scotland PLC (The) (RBS): Free Stock Analysis Report
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