Banking blow for rural communities

On May 10th, Danske Bank will bring to a close a chapter in the history of a small rural Co Down village when it closes the doors of a bank that has served the area for generations.

More than 100 years after what was previously Northern Bank first commissioned architect Henry Hobart to design new bank premises for Castlewellan, Danske Bank will, in May, effectively remove the heart and soul of the imposing stone building in the village.

Danske plans to close branches in Newcastle and Warrenpoint on the same day. It intends to merge its Newcastle and Castlewellan branches with its Downpatrick branch and incorporate its Warrenpoint branch into its Newry branch. It says it is inevitable that branch banking will change and that “more branches may close this year”.

According to Danske, the restructuring will not result in job losses and it remains com- mitted to customers because all services will be available through the post office network in the North, and online.

The bank will continue to operate 59 branches throughout the North but this will be of cold comfort to customers of the branches earmarked for closure, SDLP MLA for South Down Seán Rogers has said.

“At a time when confidence in the banking industry is low, these closures only serve to increase people’s stress and reduce customer confidence,” he said. “Rural areas require proper access to banking and the loss of these branches will mean travel pressure for customers and indeed redeployed staff. I would ask Danske Bank to consider the effect closures will have on the local community.”

The closures come as Danske publishes its latest corporate responsibility report, which puts “special focus” on the bank’s role in society.

In the report, chief executive Eivind Kolding says the bank, and the financial sector in general, plays a fundamental role in society by providing a “financial infrastructure and by supporting growth and ensuring economic stability”.

He says: “An efficient financial infrastructure makes many everyday activities easier and safer – from paying our bills and buying things to transferring money. For businesses, their growth and development are dependent on the capital we give them access to.”

Try telling that to customers in Northern Ireland who no longer have a local branch.

The 59-page report from Danske describes what it calls “the unavoidable dilemmas and judgment calls” that form part of a corporate responsibility agenda. It also outlines what Kolding calls one of Danske’s top priorities in 2013 – “to set new standards for banking in order to restore the trust of our customers and shareholders.

“Our standards must reflect the fact that we see ourselves as part of society. We respect our close relationships with customers and the public and we want to help create a sustainable society.”

How does closing bank branches in rural areas fit into that strategy exactly? It’s easy for a chief executive of a bank headquartered in Copenhagen to say but, as Danske customers have discovered, this can translate into something completely different in reality.

For many small towns and villages, banks and the work they do, the relationships fostered through the years and the trust between one person and another – the bank manager and the small business owner, for example – is a vital part of the local economy.

When the bank disappears from that community, does that relationship not disappear overnight too? It cannot easily be replaced by a voice at the end of a phone or by logging on to your account – regardless of whether you have 24-hour access to your account.

Danske is not the only bank changing the way it does business. All the major banks – including Ulster, Bank of Ireland and First Trust – have recently confirmed significant restructuring plans that will result in the closure of branches and the removal of physical services from towns, cities and villages.