Abbey National is to close up to half of its 3,500 counters, risking fresh controversy following its decision to charge £5 to pay bills in branches.
The drastic cost-cutting move is designed to channel customers into using cheaper banking methods, such as the telephone or through cashpoint machines.
By axing at least 30 per cent of counters across its branch network, Abbey National is in danger of infuriating its account holders. Many have already reacted angrily to the new charge on paying bills, which the bank says will improve service by shortening queues.
Analysts expect the counter closures to lead to full branch closures among Abbey National’s 787-chain network. Insiders say jobs will be cut through natural wastage, although the bank denies there will be redundancies.
The decision to reduce counter service comes as the bank considers launching its first Internet banking operation, which will target wealthy customers.
According to Andersen Consulting, a counter transaction costs a bank four times as much to process as a cashpoint transaction, and more than 100 times as much as it does over the Internet.
An Abbey National spokesman says: “No branch will close more than 30 per cent of its counters, although the figure could be higher since counters not currently in operation will also be shut.
“It’s not that we want to discourage unprofitable customers, [who would be less likely to adopt the newer distribution alternatives on offer] but rather that we want to turn them into profitable customers through cheaper distribution channels.”