Royal Bank Of Scotland Branch Closures To Affect 792 Jobs

Recently, The Royal Bank of Scotland (LON:RBS) (NYSE:RBS) announced plans to shut down 172 branches across England and Wales, impacting nearly 792 employees, who will be offered voluntary dismissal. It confirmed that there will be no changes in its NatWest retail banking business.

Following a thorough review of its branch network in England and Wales, the Edinburgh-based bank found that the branches were located at very close intervals. Also, it noted a decline in the number of people showing up at those branches.

Royal Bank of Scotland disclosed that since 2014, it has witnessed a 30% decline in branch transactions across the region, whereas the use of digital modes such as mobile banking rose 53%.

A spokesperson from the bank said, “We realize this is difficult news for our colleagues and we are doing everything we can to support those affected. We will ensure compulsory redundancies are kept to an absolute minimum.”

The state-backed bank has been forced to take this step after many failed attempts to divest 300 branches under the name of William & Glyn, which was imposed as a condition on the bank post 2007 bailout.

Nevertheless, the bank promised to enhance its customers experience by developing digital services. It plans to increase telephone banking services and improve online and app messaging services.

Further, noting that some people still refrain themselves from the use of digital modes due to lack of knowledge, Royal Bank of Scotland introduced a separate taskforce — TechXperts — who would be helping communities by providing training and support in the related matter.

The bank’s diversified business model and commitment to improve financials are likely to support its overall growth in the near term. However, it might incur loss in 2018 due to the pending legal settlement with the financial regulator over deceptive mortgage marketing strategies.

Shares of Royal Bank of Scotland have gained 7.4% over the past year, underperforming 9.9% growth recorded by the industry.

The stock currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the same space are BNP Paribas (PA:BNPP) SA (OTC:BNPQY) , BanColombia S.A. (NYSE:CIB) and The Bank of N.T. Butterfield & Son Limited (NYSE:NTB) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for BNP Paribas has been raised 3% for the current year, in the last 60 days. The company’s share price has increased 2% in the past six months.

BanColombia has witnessed 1.8% upward earnings estimate revision for 2018, in the last 60 days. Its share price has risen 28.8% in the past six months.

Bank of N.T. Butterfield & Son’s shares have gained 35.3% in past six months and its earnings estimates for 2018 have moved up 4.1% in the last 60 days.

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