Santander branch network - inconvenient and unsustainable?

7sefton

I've been thinking about this for a while, especially every time I walk past a Santander branch within 2 minutes walk of each other.

It seems to me that Santander places a lot of value on a wide branch network to carry out their retail banking business - and that's great, because I think branch banking is a good thing. So now they can boast of over 1000 branches, set to increase even further when A&L brought under the same brand later in the year. But I think this is quite misleading, because these Santander branches are not as evenly distributed as the network of a traditional high street bank such as HSBC or Barclays.

This is because Santander's branch network is made up of two (soon to be three) old building society networks which tend to be both smaller and more centrally-located than the traditional banks. Whereas Barclays can be expected to have a few branches in a city centre, plus a few other in the suburbs (thus giving a fairly wide choice of locations for local customers to do their banking), Bradford & Bingley tended to only have a branch in city centres. The same applies to A&L and, to a lesser extent, the old Abbey. So whilst the new Santander network may be 1000+ strong, the actual number of individual locations covered by a Santander branch is much less than that figure.

Which means we have the ridiculous situation where some high streets can expect to have 3 Santander branches (waste of money, confusing for customers, etc.) yet have no access to 'local' branches outside of the city centres. Surely Santander must recognise the lack of logic to this, and when will they start to inevitably rationalise their network?

fooboo

I seem to remember them talking about "relocating" branches, presumably so that they could achieve the kind of coverage you describe. Whether theres really the business case to open branches in the kind of suburban locations where theyre not present is another thing all together.

jonesMUFCforever

What they really mean is they will ''integrate'' branches - ie where there is 2 or more branches near each other one will close.
Same thing happened with Lloyds and Tsb.

7sefton

jonesMUFCforever wrote: »

What they really mean is they will ''integrate'' branches - ie where there is 2 or more branches near each other one will close.
Same thing happened with Lloyds and Tsb.

But this is exactly what they are NOT doing. For example, they have just refurbished the old B&B branch in Birkenhead (Merseyside), which is literally 3 doors down from the existing Abbey. They say this is perfectly fine for them because it will reduce queues in branches by effectively giving customers a choice of two in the same street, but it just seems silly to me.

chambta

In my town the rebranded B&B is literally next door to the soon-to-be-rebranded A&L.

stclair

Where I live in the city centre theres the orginal santander and a rebranded bradford and bingley 3 doors from each other.

I really dont see the point in it, if there going to end up closing some of them anyway.

JacksterD

It would appear to be a bit unsustainable.

On Byres Road in Glasgow there was an Abbey, a Bradford and Bingley and an A+L literally within 30 metres of each other. The Abbey and B+B are both now Santander branches and I imagine the A+L branch will be soon.

http://maps.google.co.uk/maps?f=q&source=s_q&hl=en&geocode=&q=hillhead+subway&sll=53.800651,-4.064941&sspn=15.059141,46.538086&ie=UTF8&hq=subway&hnear=Hillhead,+Glasgow,+UK&ll=55.875631,-4.2933&spn=0,359.909105&z=14&layer=c&cbll=55.875708,-4.293217&panoid=S9uX0U_7C1HLorg9HtvIuQ&cbp=12,334.42,,0,6.1

^ you can see what I mean there

jambosans

JacksterD wrote: »

On Byres Road in Glasgow there was an Abbey, a Bradford and Bingley and an A+L literally within 30 metres of each other. The Abbey and B+B are both now Santander branches

Incredible, staff must have a chuckle when they look across the street and see another Santander. At least if they amalgamate branches, any staff from the closing branch who get kept on won't have to walk far when relocating.

opinions4u

jambosans wrote: »

Incredible, staff must have a chuckle when they look across the street and see another Santander. At least if they amalgamate branches, any staff from the closing branch who get kept on won't have to walk far when relocating.

It's a toughie, especially in the current economic climate.

At a local level, as jambosans suggests, most staff are retained after an amalgamation. Management jobs are most at risk and invariably one branch manager gets to keep his/her job (occasionally with a rise, usually without) the other (usually from the smaller office) gets shifted to a lower status role in a different location and usually leaves the business a year or so later.

At a strategic level branch duplication is a difficult issue to cost and manage. Having been involved in such decision making very briefly when Halifax and Leeds merged I have some insights, although the world has progressed since then.

1) Are branch systems able to cope with amagamtion?

2) Of the two (or more) company premises in a town, does one of them have the capacity to cope with the combined customer base, are those premises in the right location and can they cope with a potential uplift in customers that might occur if they are refurbished?

3) If the answers to (2) are "no", can you acquire new and more appropriate premises in the right location? Local planning authorities have long been resistant to banks moving closer to shopping areas.

4) If the answer to (3) is "yes", can you easily dispose of the existing sets of premises, or will you be left with lease/maintenance costs on three high street offices, two of which are empty?

While in most cases I would think old Abbey branches could swallow up old B&B branches, I suspect it's not so clear cut with A&L. But the idea of having 1 shiny and new active branch and 3 empty shops in the same area at a time when high streets are unable to attract new shops to fill those empty premises is less appealing than maintaining the existing set up.

In time, as high streets recover, merger of the Santander outlets is inevitable - sometimes in to the biggest existing branch and sometimes in to new premises. But it's a heavy call on capital that banks don't want to spend at present.

Halifax and Lloyds may well be a different story, depending on the LBG brand plan. If they keep the Halifax brand, which I believe they will, then premises mergers aren't needed.

If they do merge brands, then there will not be many towns where a Lloyds branch could cope with all the Halifax customers or the other way round. This would mean a need to invest in new premises in around 700 locations in England and Wales. At the moment, they simply couldn't afford to do it and the cost savings at mamagement level wouldn't get close to recovering the expense for decades.

There are also political decisions for LBG to consider, and maintaining different brands in England and Wales at least gives the impression of competition, even if LTSB and Halifax move to being run the same way and have uncomfotably high combined market shares.

Old_Wrinkly

JacksterD wrote: »

It would appear to be a bit unsustainable.

On Byres Road in Glasgow there was an Abbey, a Bradford and Bingley and an A+L literally within 30 metres of each other. The Abbey and B+B are both now Santander branches and I imagine the A+L branch will be soon.

http://maps.google.co.uk/maps?f=q&source=s_q&hl=en&geocode=&q=hillhead+subway&sll=53.800651,-4.064941&sspn=15.059141,46.538086&ie=UTF8&hq=subway&hnear=Hillhead,+Glasgow,+UK&ll=55.875631,-4.2933&spn=0,359.909105&z=14&layer=c&cbll=55.875708,-4.293217&panoid=S9uX0U_7C1HLorg9HtvIuQ&cbp=12,334.42,,0,6.1

^ you can see what I mean there

That woman leaning on the wall next to the ATM looks a bit dodgy, and that litter-bin seems strategically placed for a miniature camera ... :rotfl:

MoneySavingUser

opinions4u wrote: »

It's a toughie, especially in the current economic climate.....

Excellent post - very informative