ALEX BRUMMER: Labour’s big banking idea could speed the demise of even more High Street branches

Running a pure branch banking model was never going to be easy. Metro Bank made it harder when it incurred the wrath of regulators over misreporting of its loan book.

Nevertheless, founder Vernon Hill demonstrated that there is a ripe market for a better customer experience.

The 2.7m account holders who remained loyal to Metro during its travails will be disappointed that cost cutting-plans mean service is going to be curtailed.

One cannot blame Colombian billionaire Jaime Giliniski, who this week stumped up £925million to refinance the group, for seeking value for money.

A senior banker once cautioned me that Metro and the new breed of online banks would struggle unless they managed to establish a proper charging model.

Endangered: Some 172 NatWest, RBS and Ulster Bank closures are scheduled for 2023 and 2024 and another 45 Lloyds and Halifax have just been lined up for the axe

In his view there was no such as a ‘free’ credit card or bank transfer, however gee-whizz the technology. As for branch banking, it was a cost on the profit and loss.

NatWest finance director Katie Murray is an accountant through and through and would see branches as an overhead to be scythed. 

That’s why 172 NatWest, RBS and Ulster Bank closures are scheduled for 2023 and 2024 while 45 Lloyds and Halifax branches have been lined up for the axe.

Metro, in its struggle to turn a profit again, looks set to sever seven-day-a week opening. 

This was an early point of difference with the high street behemoths. Now Metro, ominously, is promising to improve digital services – that usually means shifting administrative burden to customers.

Labour shadow chancellor Rachel Reeves finally has come up with a policy which should win approval. She proposes the creation of 350 ‘banking hubs’ to ensure everyone has access to retail banking services.

Such hubs serving several financial institutions do work. The downside is that it will probably speed the demise of yet another layer of high street outlets.

Retail revival

Britain’s high streets are in transition. Earlier this week a tearful Lisa Wilkinson, Wilko’s former chairman, admitted to being too slow to recognise the discount store group’s demise under a mountain of debt.

It didn’t stop her family’s extraction of a £100million of dividends before the collapse.

We shouldn’t despair. Marks & Spencer has been closing older stores in the wrong places. But it also has been repurposing acquired Debenhams sites, such as that in Liverpool, and is doing a roaring trade.

M&S is not alone. Rival Next bought into online shopping much earlier than competitors but retained faith in a stores portfolio and is a pioneer of click and collect. HMV has been restored to Oxford Street in central London amid rekindled belief in vinyl.

Outdoor fashion specialist Mountain Warehouse is to open 50 stores in 2024.

Ikea is moving from larger-scale, out-of-town warehouses to popular shopping venues. It is transforming Topshop’s flagship store at Oxford Circus into a ‘green’ sofa and flat pack home furnishing emporium.

So far Ikea has opened 60 new-format stores. Next up in Britain is fading Churchill Square in the centre of Brighton.

Its new format is driving sales growth.

Lego, the world’s largest toy retailer, recently opened its 1,000th store. None of this means that every depressed high street is ready for an overhaul. It does show that retail therapy is alive and well.

Consumers are swiping credit cards despite a perceived cost-of-living crisis.

Crunch hero

Alistair Darling was the warmest and calmest of occupants of Number 11.

Amid the furniture kicking and raised voices as Gordon Brown’s government sought to deal with the great financial crisis in 2007-08, Darling understood that if Britain was to withstand the shock it meant deploying the Government’s balance sheet.

He acted in the face of initial jitters from Brown next door who hesitated at taking first Northern Rock and then large swathes of the banking system into public ownership.

I recall being in the Chancellor’s office at the Treasury for lunch on the day that Darling signed off on the shotgun wedding of Lloyds and Halifax Bank of Scotland.

Messages pinged in that HBOS shares were falling off a cliff.

Darling was poker-faced throughout. By the time I arrived back at the Daily Mail, half an hour later, the deed had been done.

May Darling rest as calmly in the next world as he did in this.

This post first appeared on Dailymail.co.uk