Virgin Cash has prompted a row with unions over plans to shut 31 branches, together with 12 in Scotland.
The closures will scale back its community to 162, down from 245 when Virgin Cash merged with Clydesdale Financial institution in 2018.
The union Unite mentioned that the newest discount was shameful and would hit Scotland “disproportionally”, leaving rural and distant areas with out enough banking providers.
Virgin Cash is the newest financial institution to extend department closures after the pandemic, which inspired extra clients to modify to digital providers and scale back the usage of money. Santander introduced plans to shut 111 branches this yr and HSBC mentioned it will shut 82 branches. Lloyds has resumed plans to chop 56 branches final yr and TSB, owned by Sabadell, is axing 164 branches.
Virgin Cash’s branches, which it calls shops, will shut early subsequent yr after a drop in day-to-day transactions being carried out in particular person, it mentioned. Fergus Murphy, group buyer expertise director, mentioned: “As our clients change the way in which they wish to financial institution with us and conduct fewer transactions in-store, we should proceed to evolve the position of our shops into locations the place we showcase our merchandise and produce our digital providers to life.”
There will likely be an additional £25 million cost within the fourth quarter on account of the closures, taking the entire price to £45 million within the interval, as Virgin Cash had already deliberate to spend further modifying its workplace area. The financial institution mentioned its restructuring costs for 2021 as an entire would now be £145 million in complete.
Shares in Virgin Cash fell 7.2p, or 3.38 per cent, to 206p on the additional cost. Andrew Coombs, an analyst at Citi, mentioned: “Total we lower 2021 reported earnings by 23 per cent and 2022 by 14 per cent on heavier restructuring costs.”
Virgin Cash, arrange by Sir Richard Branson as a part of his Virgin empire, purchased a part of nationalised financial institution Northern Rock in 2011 and was floated on the inventory market in 2014. It was then purchased by CYBG, proprietor of Yorkshire and Clydesdale banks, in a 2018 deal. A part of the deal was the usage of the Virgin title, which includes paying annual charges to the Branson enterprise.
The financial institution mentioned 28 of the branches being closed have been lower than a 3rd of a mile away from the closest Submit Workplace, the place clients can deposit and withdraw money and pay in cheques. A department used solely by staff in Gosforth, which had been Northern Rock’s headquarters, will even not reopen after its closure firstly of the pandemic.