RUTH SUNDERLAND: Support our bank branches

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

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

Branches are not prurient leftovers whose only justification is a quasi-social service to the elderly. Many of a certain age, like my retired teacher mother, are perfectly capable of managing their financial affairs online.

But branches are essential for human contact, accountability and problem solving. There are times when a bot just isn’t enough.

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

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

With just over 600 branches, it has just overtaken Lloyds Bank and now has the largest network in the UK. True, it is behind Lloyds Banking Group if you include the old Halifax branches. Still, it outperforms Barclays (346) and HSBC (333).

Nationwide says there is even a real manager in every restaurant, something that is more or less extinct elsewhere. Rivals could portray this as a smooch-like venture, especially given Metro’s troubles.

Branches themselves are not the primary cause of Metro’s implosion. This is due to its culture, past leadership and business model.

The bank was founded by US entrepreneur Vernon Hill and went public on the London Stock Exchange in 2010.

Hill left the company 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 £25 million over the years to InterArch, a company owned by his wife Shirley, for branch design services.

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Hill was previously forced out of 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 argument.

In 2022, Vernon and Shirley were ordered to pay more than $2 million (£1.63 million) to recover mismanaged assets and penalties on the InterArch pension plan after they invested some of its funds in Metro’s shares and Republic First had invested, which fell sharply.

The couple was found to have engaged in self-dealing and breached their duties. They also had to pay an additional $1 million into the pension to resolve a related lawsuit.

There is no basis for concluding from Metro’s development that bank branches are ruinous follies.

Nationwide’s stance is a healthy antidote to the anti-industry streak that has gripped the mindset of most bank bosses.

Its chief executive, Debbie Crosbie, argues that it can invest in branches because, as a mutual building society, it doesn’t have to chase profits to keep shareholders happy.

It helps that Nationwide actually made a whopping £2.2bn profit in 2023, although a large chunk was returned to customers for mutual benefit.

Next month’s half-year figures should show that the company is being run very cost-effectively. Nationwide doesn’t do everything right, but full marks for supporting branches.