Branch closures will save less than cost of rugby sponsorship but RBS refuses to budge

Royal Bank of Scotland executives have rejected calls from MPs to reconsider its plan to shut 62 branches in Scotland, despite being hauled up before the House of Commons Scottish Affairs Committee yesterday to explain their actions.

Some 13 rural communities are set to be left with no bank at all following the planned closures. One is the Hebridean island of Barra, where residents will have to take a ferry to get to their nearest bank branch.

Yesterday Pete Wishart MP, chairman of the House of Commons Scottish Affairs Committee, told Jane Howard, RBS’s managing director of personal banking, and Les Matheson, chief executive of personal and business banking, that he had never experienced “such an overwhelming negative response to a single issue in my 17 years as a Member of Parliament”.

But the pair were unmoved, and while acknowledging that the closures would save just £9.5 million, they insisted that RBS had to respond to changes in customer behaviour, including a rise in digital banking.

Mr Matheson told MPS: “We understand that customers are concerned about the change, that customers find change difficult, and we are committed to helping them through that process, and we have lots of ways of doing that.”

But Unite Scotland’s Lyn Turner refused to accept the bank’s explanation, telling the committee that the union believed the real reason was to make RBS more attractive to a City-led privatisation.

During the grilling, it was admitted that still 73 per cent taxpayer-owned RBS has spent more on one year of rugby sponsorship than it hopes to save by axing the 62 Scottish branches.

Making her argument, Ms Turner highlighted RBS sponsorship of the Six Nations rugby tournament cost £44 million over four years – or £11 million a year.

“Looks like the cat’s out the bag”, Ms Turner said. “£9.5 million savings is a drop in the ocean compared to the billions the bank turns over – they spend more than that on the rugby.

“So instead of supporting the needs of communities they are pressing ahead with closures to send the message that the bank is now ready for sell-off. It’s as if RBS doesn’t realise the immense damage this is doing to its reputation – it’s likely to make the current PR disaster grow and grow.”

The SNP’S Westminster leader Ian Blackford said RBS could still be “forced” to change its mind on the closures, saying: “Why did we save RBS if they are to be allowed to walk away from these responsibilities? The government have got to hold them to account.”

Following the session, chairman Mr Wishart said RBS’ response had been “unsatisfactory”, adding: “They seem to not be listening to the deep concerns from communities right across Scotland over their branch closure programme.”

Scottish Conservative MP John Lamont, a committee member, said the evidence from RBS was “not good enough”.

Completing the cross-party condemnation, Labour MP for Midlothian, Danielle Rowley, said: “By Les Matheson’s own admission the sum saved by closing these branches is trifling, while the damage to the communities they serve is beyond measure.

“This is an entirely avoidable bit of bad publicity, and all of the many millions RBS splurges on sponsorship and advertising will not undo that.

“Nobody expects RBS to hold back against an overwhelming tide of progress. But one of the key questions Les Matheson had no answer to was what progress is this - and at what cost?

“RBS says it is anticipating change to protect its profits, but if that means trampling over its loyal customers on the way to creating banking deserts then that is bad for business.