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One in five bank branches closed

Personal Finance Editor,David Prosser
Wednesday 22 February 2006 20:37 EST
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Leading banks, which are making record-breaking profits, have closed more than one-fifth of the branches in which their customers were able to do business 10 years ago, according to independent analysis.

A report from the University of Nottingham, published yesterday, revealed that one in five bank and former building society branches have been shut since 1995, compared with just one in 20 building society branches.

The report says branch closures are most likely to have occurred in communities where traditional manufacturing industries have been in decline.

Adrian Coles, the director-general of the Building Societies Association, accused the large banks of abandoning their social responsibilities to maximise profits. "Over the next few weeks we will see banks once again announcing record profits," he said. "This report is a timely reminder that the pressure to squeeze every last drop of profit has meant abandoning less lucrative customers and closing one in five of their branches."

The report was published a day after Barclays opened the banking results season witha record £5.3bn profit. Lloyds TSB, HBOS, Royal Bank of Scotland and HSBC are due over the next 10 days.

However, Brian Capon, of the British Bankers' Association, said: "Modern banking provides multi-channel approaches, through branches, the phone and the Internet. But bank branches are very much like any other retail outlet - sometimes you have to make tough decisions based on how many people are coming through the door."

Nevertheless, the report is likely to add to concerns that people living in poorer areas are being denied access to basic financial services. The Government has launched a Financial Inclusion Task Force to investigate these issues.

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