Metro Bank to review seven-day opening and cut jobs

The financially troubled institution stated that the actions were part of a plan to save about £50 million annually. Although Lloyds, a competitor banking institution, announced plans to close 45 more branches, it stated that it would not close any branches. Twenty-two Halifax branches, nineteen Lloyds branches, and four Bank of Scotland branches will close as a group. Metro Bank has aimed to set itself apart from more conventional lenders since its founding in 2010 by remaining open for longer. However, it also disclosed on Thursday that it will reduce its hours of operation. Metro Bank stated: “The company is reviewing seven-day opening and extended store hours across the store network and is in discussions with the Financial Conduct Authority about the customer implications of any such changes.” In the meanwhile, around 850 employees of Metro will lose their employment. With 4,266 employees as of right now, the bank announced that it intends to cut back on “roles across the organization, including at senior leadership level”.This week, a £925 million rescue plan intended to ensure the bank’s survival was approved by shareholders. Following an accounting scandal, it has encountered difficulties recently. The bank was having trouble turning a profit, and in October there were rumors that it was looking to raise capital and refinance a portion of its debt. As the first bank to start in the UK in almost a century, Metro Bank was established in 2010 by American businessman Vernon Hill in the wake of the financial crisis. Red, white, and blue branding adorned its branches, and posters featuring Mr. Hill’s Yorkshire Terrier Sir Duffield—the bank’s “chief canine officer”—promoted the institution’s dog-friendly policies.

While most banks were reducing their presence on the High Street, Metro Bank adopted an unconventional approach and established a network of more than 60 physical branches. These branches opened and closed later than those of its competitors. It stated that part of its plan was to help consumers escape “the lunchtime sprint” by being open from 8 am to 8 pm every day of the week, to be a “challenger” to the major High Street banks. The bank announced on its website that its branches will be open on Thursday from 9.30 am to 5.30 pm, however, this is only for that one day. A representative stated that “no decisions have yet been made” regarding the operating hours. Metro Bank had stated last month that it intended to eliminate £30 million annually, but it has since increased that amount to £50 million. It stated that it “remains committed to stores and the High Street” and that it is currently searching the northern regions of England for potential branch locations. However, part of the way it plans to reduce expenses is by automating more services and eliminating back-office employment. The bank is discussing the effects of shortened opening hours on consumers with authorities. Thanks to the funding agreement, which investors supported earlier this week, Metro Bank will raise £325 million and refinance £600 million in debt. The controlling shareholder of Metro Bank will be Colombian billionaire Jaime Gilinski Bacal, whose company Spaldy Investments will invest £102 million in the bank. Bacal will retain a 53% stake in the bank.

Competitor Lloyds Banking Group announced on Thursday that no forced layoffs were planned and that any employees impacted by the closure of its branches will be offered positions at other branches or in other departments of the company. The 45 branches of Lloyds will mostly close in March and April of next year, with a few closing between August and November. With 276 branches closed thus far this year and next, the Lloyds group now has 515 Lloyds Bank locations, 413 Halifax branches, and 133 Bank of Scotland branches.

Citation-

https://www.bbc.co.uk/news/business-67575555

https://www.ft.com/content/21f4237a-7bc8-44e4-affb-6e881630be1d