Community bank plans on track but Committee says it requires “expectation management”

(Title Image: National Assembly of Wales/Crown Copyright)

With pretty much every part of the country affected by bank branch closures in some way, yesterday afternoon AMs debated the Economy & Infrastructure Committee’s report on access to banking in Wales.

Little sympathy for profiteering banks

Running through the main findings of the report the Committee Chair, Russell George AM (Con, Montgomery), said responsibility for replacing banks after they close was increasingly being placed on communities themselves (through schemes led by LINK) and post offices, which don’t offer the same level of service.

The report reflected the levels of scepticism around the proposed creation of a community bank for Wales, led by Banc Cambria:

Dr Hefin David AM (Lab, Caerphilly) listed several bank branch closures in his constituency, though he was disappointed the Welsh Government rejected a recommendation to reintroduce support for post offices, some of which, like Bargoed, remained open because of the former post office development fund.

Mohammad Asghar AM (Con, South Wales East) said 40% of Welsh bank branches have closed in the last five years, with some parts of the country losing 85% of their banks since 2015. He believed this would have a more pronounced negative impact on older people who may be used to using cash and who don’t use online banking.

Bethan Sayed AM (Plaid, South Wales West) noted an irony in moving to online banking for routine personal banking services, yet major financial investments like mortgages still require a face-to-face meeting.

“….HSBC have made a profit, and this is from June 2019, of £11.8 billion; Lloyds – £4.3 billion; Barclays – £2.4 billion. A combined profit of £22 billion, and they’re telling us that they can’t afford to keep branches in Llanystumdwy, Bethesda, Rhondda or Neath open. I do not believe it. They say it’s a different part of the company, but it comes down to the bottom line, it comes down to the profits for their shareholders, and that’s where they’ve got it all wrong, so I have little, if any, sympathy for them in that regard.”
– Bethan Sayed AM

David Rowlands AM (BXP, South Wales East) defended free-to-use ATMs, which were often the only way people living in low-income areas could access cash.

Vikki Howells AM (Lab, Cynon Valley) said news of a Co-Operative Bank closure in her constituency got more attention than anything else on Facebook; she called for “expectation management” on a possible community bank – particularly as it’s suggested some branches would be automated. Jack Sargeant AM (Lab, Alyn & Deeside), however, was more optimistic, saying a community bank “needs to happen”.

Joyce Watson AM (Lab, Mid & West Wales) condemned the main high street banks for not giving oral evidence, but why would they when they’ve been allowed to wriggle out of their commitments so easily?

Credit union collaboration is possible

Economy & Transport Minister, Ken Skates (Lab, Clwyd South), noted the alarming scale of bank closures and threw his support behind a community bank – a key commitment in Mark Drakeford’s Labour leadership manifesto in 2018.

Many AMs raised concerns about the potential impact of the community bank on credit unions, but the Minister said there were opportunities for collaboration:

“I note the committee has some concerns about the feasibility of the community banking proposal and its potential impact on credit unions in particular, but work is already well underway to ensure that credit unions and the community bank and building societies work in collaboration to find the very best solutions to improve access to banking services. And this work is focused entirely on ensuring financial inclusion for all people across our country.”
– Economy & Transport Minister, Ken Skates

In addition, the Minister called for high street banks to have a transition process in place to manage potential closures and to properly address and problems that may arise from a closure.

  • 14