‘Decision to close bank was made for the sake of the community’, says Airdrie Savings Bank boss
Scottish Financial News
The boss of Britain’s last remaining independent savings bank has told a Holyrood committee that last month’s decision to close the 182 year-old institution was made to avoid a disorderly, regulator-led demise and the consequent impact on its thousands of customers.
Airdrie Savings Bank, which was founded in 1835 and had 10,000 current and 30,000 deposit accounts, announced last month it will close its two branches in Coatbridge and Bellshill, both North Lanarkshire, on April 28.
The process has been carried-out as a phased shutdown of operations, with the loss of up to 70 staff.
The bank’s Airdrie headquarters on Stirling Street will remain open until all customers have been transferred to other providers ahead of an anticipated closure in the “final quarter” of this year.
ASB chief executive Rod Ashley told Holyrood’s Economy, Jobs and Fair Work Committee that while the bank had negotiated the financial crisis far better than many of the larger banks, the persistent climate of low interest rates, increasing digitisation, compounded by the increasing burden of regulation costs had led to significant losses.
Mr Ashley told the committee: “We undertook a strategic review of the options for the bank and that led us to the decision that the medium to long-term position for the bank was sufficiently uncertain that in order to act in the best interests of the depositors that we would take the decision at this point in time in order to conduct an orderly wind-down of the bank affairs, in order that there might be a community benefit at the end of the winddown process.
“We could have ended up in a situation where the bank may have continued making losses for a number of years to come and there would come a point by which the control of any wind-down would be taken out the hands of the local community, and out of the local trustees, and would be handled by the regulators.”
Also speaking in front of the committee, Professor Charles Munn, of Glasgow University, said the pressures exerted on ASB are being experienced across the banking sector and are making it “virtually impossible” to make money from current accounts.
He said the emergence of new technology such as Apple Pay would see this pressure increasing on commercial banks experiencing the same issues that had forced ASB to close.