By Scott Wright

THE owner of the former Clydesdale Bank has slashed its branch network again in a move branded as “shameful” by trade union Unite Scotland.

Virgin Money said it will close a further 12 branches in Scotland, reducing its total to 43, in a move expected to result in around 70 redundancies north of the Border.

The branches affected are in Airdrie, Banchory, Broughty Ferry, Cumbernauld, East Kilbride, Galashiels, Milngavie, Musselburgh, Oban, Portree, Stenhousemuir and Wick. The Scottish closures are part of a group of 30 branches that the bank plans to shut across the UK, leading to the loss of around 112 full-time equivalent roles. The bank pledged to find new roles for people in the branches affected, which will close in early 2022.

Virgin said the decision follows a shift in sales volumes and communications to digital and mobile channels during the pandemic, which has resulted in lower branch footfall. It will reduce overall branch numbers to 131 across the UK.

But the move was sharply criticised by Unite, which declared the cuts would “disproportionately” hit Scotland. Unite industrial officer Debbie Hutchings said: “The proposed closure of 12 Virgin Money branches across Scotland is not only shameful but bizarre as the group has just about completed the rebranding exercise of the former Clydesdale branches. The announcement will disproportionately impact on workers and communities across Scotland, and it is here where the Virgin Group axe will fall the hardest.

“Island communities from Portree to rural towns such as Wick are going to be left behind by Virgin Money. Our nation’s town centres from Cumbernauld to Musselburgh will be further hollowed out as fewer people will come into town if there is no bank branch. This will directly hit the businesses that remain on the high street.”

There was also criticism from the Federation of Small Businesses in Scotland. Andrew McRae, FSB Scotland policy chair, said: “More branch closures are disappointing if not surprising by this point. But it is galling to see banks cite a drop in footfall after a global pandemic when we were encouraged – indeed, mandated – to stay in our homes.

“When a branch closes, not only does a community lose important local financial services but it leaves another gap on the high street. And customers can’t even vote with their feet and switch their bank because all of the major operators are shutting down significant number of premises.”

Virgin Money’s proposals will mean the removal of nearly one-fifth of its 162-strong branch network, which it said would result in a £25 million restructuring charge in the fourth quarter.

Jobs and branches have been steadily cut at the bank since the £1.9 billion merger of CYBG, the former owner of Clydesdale Bank and Yorkshire Bank, and Virgin Money in 2018.

The merged institution has taken on the Virgin Money name, with the Clydesdale Bank brand gradually being phased out – spelling the end of an institution that was established in1838.

Clydesdale branding has now been removed from all branches in Scotland, and the name only continues to exist in some accounts which are gradually being shifted to Virgin Money.

The bank said yesterday that it “continues to see greater appetite for digital self-service” among customers as the country emerges from the pandemic. It added that it also “continues to evolve its operating model to reduce real estate costs along with giving colleagues more flexibility, and to take opportunities to increase automation, leveraging technology throughout key processes.”

The bank said the decision to close a branch is based on a number of factors, including location, footfall, proximity to other stores and lease arrangements. It stated that customers can use Post Offices for day-to-day services such as cash deposits and withdrawals.

With Virgin Money pledging to increase investment in digital initiatives, it now expects restructuring charges for the full year to come in at around £145m, including £45m in the fourth quarter.

In July, the bank released £19m of provisions set aside for bad debts arising from the fallout from the pandemic, citing the improving economic outlook.

Fergus Murphy at Virgin Money said: “As our customers change the way they want to bank with us and conduct fewer transactions in-store, we must continue to evolve the role of our stores into places where we showcase our products and bring our digital services to life.”

But Ms Hutchings added: “The Virgin Money Group claims the principal reason for the closures is down to its digital banking drive. However, what happens to the people in our island and Highland communities where internet reception is notoriously poor, not to mention the difficulties which many people have in using mobile app technology. The Virgin Group has abandoned all social responsibility with these proposed closures, and they are completely disregarding the damaging effects that these closures will have on thousands of customers. We are calling on politicians in the areas affected to work with us to save these branches, and Unite will be raising this as a matter of urgency with the Scottish Government.”

Shares in Virgin Money closed down 4.1%, or 8.8p, at 204.4p.