RUTH SUNDERLAND: Support our bank branches

Shortly after my stepfather passed away this year, my mother knocked on the door. To her surprise, the delivery man brought a beautiful bouquet of flowers from the local bank staff.

It was a touching gesture from people who, over the decades my parents had gone there, had become more than just staff behind the counter. If the big banks continue to close branches and push customers online, such personal relationships and a sense of community will be lost.

Branches are not Luddite remnants whose sole justification is as a quasi-social service for the elderly. Many of a certain age, like my retired teacher mother, are perfectly capable of managing their finances online.

But branches are essential for human contact, accountability, and problem solving. There are times when the bot just won’t do.

Some commentators seized on the downfall of Metro Bank, whose hallmark was its busy branches, as evidence that a network was too expensive to run. This is fake. Coincidentally, as Metro struggled to raise capital this weekend, building society Nationwide doubled down on its pledge to keep branches open.

Closing: Branches are essential for human contact, accountability and problem solving

It has just overtaken Lloyds Bank to have the UK’s largest network, with just over 600 outlets. True, it is behind Lloyds Banking Group if the old Halifax branches are added. However, it is ahead of Barclays (346) and HSBC (333).

Nationwide says it even has an actual manager at each, something that has more or less disappeared elsewhere. Rivals may paint this as a Canute-like venture, especially in light of Metro’s woes.

The branches themselves are not the main cause of Metro’s implosion. This lies in its culture, past leadership and business model.

The bank was founded by American entrepreneur Vernon Hill and was listed on the London Stock Exchange in 2010.

Hill left in 2019 following an accounting scandal. He is no longer associated with the bank, but it bears his indelible mark.

Under his chairmanship, Metro handed over around £25m over the years to InterArch, a company owned by his wife Shirley, for branch design services.

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Hill was previously ousted from a US bank after a dispute with regulators over contracts with family members. Then, after leaving Metro, he was elbowed by another bank, Republic First of Philadelphia, after a boardroom scandal.

In 2022, Vernon and Shirley were ordered to pay more than $2 million (£1.63 million) in restitution for mismanaged assets and penalties to InterArch’s pension plan after investing some of its funds in Metro shares and Republic First, which fell hard.

It was established that the two committed suicide and violated their obligations. They also had to pay another $1 million into the pension to settle a related lawsuit.

There is no reason to extrapolate from Metro’s trajectory and conclude that bank branches are disastrous nonsense.

Nationwide’s position is a healthy antidote to the anti-branch gang that has taken over the thinking of most bank chiefs.

Its chief executive, Debbie Crosby, claims it can invest in branches because as a mutual building society it does not have to chase profits to satisfy shareholders.

It helps that Nationwide actually made a hefty profit of £2.2bn in 2023, although much of it was returned to customers in mutual benefits.

The half-yearly figures next month are likely to show that the society is being run very profitably. Nationwide doesn’t do everything right, but full marks for supporting branches.