01 February 2011

Inner city flight

Actually, where I live is quite suburban. Just the other day, only two miles or so from here, I saw the blue flash of a kingfisher diving on the River Beck, and I've seen herons in Deptford. But it's turning a bit inner city right now, and the first clue was an innocuous looking letter from the Nationwide Building Society.

On first read, all I picked up was "we're closing your local branch" and to be honest, that doesn't affect me much. I can't remember the last time I went there. I've got a couple of old accounts, dwindling away in these low-interest days, but that's it.

But hang on, the suggested alternative branches are in Beckenham and Eltham - both at least 3 miles way. Why not Lewisham? Oops, they're closing that as well. They're closing all the branches in inner Southeast London, in fact. I knocked up a google map to illustrate this. The blues are the branches that are closing.

View Nationwide closures in a larger map
As you can see, there's going to be a big gap where there's no Nationwide branch. (Oh how ironic that name is.) So I read the letter again.
Nationwide is a mutual with no shareholders and our profits are re-invested for the benefit of all our members. That's why we have to ensure than any activity we undertake is profitable and effective in generating value for the benefit of all our members.
So, what they're actually saying is that not having shareholders means they have to act exactly as if they did have shareholders. And so branches that have unprofitable "transaction patterns" have to go. Doesn't really work for the benefit of those members, does it?

The phrase "transaction patterns" is tell-tale. I imagine it means there are a lot of low-value transactions, people, possibly elderly and poor, drawing out the week's spending money. I'm sure there isn't much profit in that, but what's happened to the concept of mutuality?

I've stuck with the Nationwide partly because of its mutual status (and from seeing what happened to customer service with Abbey National when it became a bank). Whenever I had the chance I voted against demutualisation. Now it all seems a sham.

And worse. Inner city decline in America in the 20th century was partly caused by the practice of "redlining" - denying financial services to certain neighbourhoods. With a lack of investment, businesses fail, and the neighbourhood as a whole gets poorer. Loan sharks (legal and illegal) move in. In America the neighbourhoods that were typically redlined were those with a high proportion of black and poor residents. Does that remind you of anywhere? Nationwide is essentially pulling out of a poor part of London where there just happens to be a high proportion of people from ethnic minorities.

Naturally, I'll be all but closing my accounts with Nationwide. I'll keep a little money there so that if demutualisation is ever proposed again, I can vote for it.

Meanwhile, this:
"Sorry, we couldn't find a policing area that matched your search."
Oh great.

Other bloggers on Nationwide:
Seven and Seven Eighths
The Greenwich Phantom

1 comment :

Anonymous said...

Hi, completely share your views on Nationwide. I opened an account there many years ago, before "de-mutualisation mania" got going, and was very encouraged by its determination to remain a mutual during that period. However, in recent years all the "member benefits" that one expects from a mutual have vanished, and it is behaving more and more like a corporate.

The issue you mention with transaction patterns is exactly what could have been predicted from the recent decision to ban over the counter cash withdrawals for small sums of money. Poor and elderley aren't always going to want or be able to take out at least £200 at a time.

The Nationwide may be a mutaul in name still, but it ditched the ethos a long time ago.