20 Nov Nationwide boss: You need more than an App to get through Covid
ATIONWIDE Building Society today pledged that it will keep branches open to support the high street and that no staff will be made redundant this year in a stark contrast to the big banks.
With Lloyds, NatWest and others slashing jobs and closing branches, Nationwide chief executive Joe Garner said his members will get the support they need, as he gently mocked the notion that banking is moving entirely on line.
“At times like this you need more than an App to get through” he told the Standard. “You need people with experience. There will be no branch closure programme. The people in our branches are fabulous.” Nationwide has 17,000 staff.
He was talking as the UK’s biggest building society reported half year profits steady at £305 million. It doubled the amount set aside for bad debts to £139 million as it took a negative view of where the economy is headed, but insists defaults from its own members remain low.
“This is a difficult time for pretty much everyone,” said Garner. “Retail and hospitality is where the pressure is being felt most acutely, which ripples through every business at every level. We will stand by our members.”
Nationwide has 650 branches and says it will remain in every town or city where it now operates until at least 2023. Over the last five years it has cut its branch network by 4%, compared to an industry average of 30%.
“This is not because we believe there will be an overnight resurgence in the high street. But it needs our support, communities depend on it,” said Garner.
Analysts say that all bank branches could be gone in 12 years if the present rate of closures continues. TSB added to the pain lately, blaming Covid-19 for 164 branch closures and 900 job cuts.
Attempts over the years to demutualise Nationwide – give shares to members and turn it into a stock market listed bank – have always failed in the face of strong opposition from management and customers.
Nationwide arranged 246,000 loan repayment holidays this year, of which only 12,000 are outstanding.
“We are taking a negative view of the economy,” said Garner. “None of us have ever seen the kinds of distress that is out there.”
He thinks Nationwide’s “conservative” profile will help it through. Its share of the mortgage market is down a bit, but it benefits from not doing large scale corporate lending.
“We are not exposed to the highest risk segments. And the thing that has held up is our lending to first time buyers. People will always want a home to live in. We will help them achieve that.”
Garner had some praise for the bank sector – he was previously at HSBC.
“I was in the middle of things in the financial crisis. I think the industry came into this in a much stronger position, and in terms of stance the reaction of banks has been to lean in.”
“The future,” he added, “is impossible to predict.”