Cheltenham & Gloucester branches to close
Lloyds Banking Group has confirmed it is to close all 164 branches of Cheltenham & Gloucester, making 1,660 staff redundant.
Cheltenham & Gloucester has had branches on the high street in the UK for more than 150 years. It has played an important role as part of Lloyds since its acquisition in 1997 and is one of the largest mortgage lenders in the UK. The former building society will disappear from the high street from November although the brand will be retained for mortgages and savings products.
The banking group, which was established following the merger of HBOS and Lloyds TSB, has spent the last few months debating the future of its brands. It has previously said that Clerical & Medical is for the chop.
Helen Weir, group executive director of retail at Lloyds, says Cheltenham & Gloucester will now focus on online savings and selling mortgages through brokers. "[A] major priority for us is to ensure that we manage the closure of the C&G branch network so that it causes as little disruption as possible to our customers," she adds.
Meanwhile, Intelligent Finance, the offset mortgage lender, and Bank of Scotland will close their doors to new business from 1 July. As a result, 159 full-time jobs will be cut.
Lloyds will continue to offer new mortgages through financial advisers from Birmingham Midshires, Cheltenham & Gloucester, Halifax and Scottish Widows.
Bank of Scotland, Halifax and Lloyds TSB will continue to operate on the high street.
Lloyds last week confirmed it is laying-off 500 staff from its retail division – bringing the total number of redundancies to more than 4,000 this year.
A way of combining a mortgage and savings so the savings “offset” and reduce the mortgage. Rather than earning interest on savings, the savings reduce the mortgage and the interest paid on the borrowing, so savings are effectively earning interest at a higher rate than most mainstream savings accounts will pay. They are also tax-efficient, as savers avoid paying tax on interest that their deposits would otherwise have earned. Offset mortgages offer the disciplined borrower a great deal of flexibility, as overpayments can be made to reduce the term or monthly mortgage repayments, which can save thousands of pounds in interest payments over the mortgage term.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.