Landlord of Lloyds branch says he only learned it was closing from newspaper report

On Friday, Lloyds Banking Group announced the closure of 40 branches of Lloyds and Halifax across England and Wales, including Newport's High Street branch.

However, Malvern Tipping, whose company Tipping Estates Limited is the landlord of that branch, was not informed of the closure by the bank and instead found out through coverage in the media.

Dr Tipping said: "The Shropshire Star news report was the first that we had heard of the branch’s closure. Only in May last year, the bank’s solicitors served notice on us that the bank wanted a new lease from last October when the current lease was due to expire.

"Our surveyors had been in negotiations ever since. The bank’s solicitors had been asking several times for an extension to the negotiation period, the last time being only last month.

"Hence, we are slightly surprised, especially as three or four years ago the bank undertook improvement works to the interior of the property. However, in the context of how retailing banking is evolving in this country, the decision is hardly a bolt out of the blue.

"We will now be consulting with our professional advisors to ascertain a suitable new use for the premises in Newport."

Newport councillor Peter Scott has lamented the decision to close the branch and fears for the impact it will have on the people of the town.

He said: "It's a huge disappointment for Newport - for the people who use it and the staff who work there. I certainly hope no jobs are lost, but of course quite a lot of branches are closing.

"It's going to have a big impact for many people because they rely on retail branches. We have already lost other branches in the town such as Barclays, so now we're down to two.

"Someone's already spoken to me after recently switching to Lloyds because they wanted a retail branch and now they will lose it.

"We'll also lose the ATM, as it's their policy not to keep an ATM open if the branch closes. We still have some in town, but it's another loss."

Councillor Scott himself used to work in retail banking, and explained: "In the world of retail banking, this isn't unexpected. Staff were always encouraged to put people on online and telephone banking - and this is the result.

"Banks rarely make profit out of retail banking, so they really don't want those retail branches, even though the public do depend on them.

"People use them to pay in and withdraw their money, but the banks aren't making profit in it, and banking is all about profit.

"I understand why they close them, but they don't really consider the impact on the little people, so to speak."

Dr Tipping continued: "In some countries, banks have been expanding their branch networks. However, in other countries, and especially in the UK, the picture is very different.

"When the main banks started auctioning off their retail branches to landlords on sale-and-leaseback agreements about 35 years ago, investors were scrambling over one another for a slice of the action.

"I witnessed this for myself at the London auctions at the start of that process. In those days, these properties were considered to be blue chip investments. It is a very different picture now.

"As Councillor Peter Scott identifies, the UK retail banking scene has changed so much, because customers have been very aggressively encouraged to migrate to online and telephone banking. What you will see is a coalescence into a few bank branches in main centres such as Shrewsbury and Norwich.

"The main UK retail banks have brands that are so recognizable that they no longer need a bricks-and-mortar presence to advertise themselves. It is somewhat different for new entrants to the market.

"Thus, the new, solely internet, banks which arose shortly after the 2008 credit crunch struggled. Not having a bricks and mortar presence, they struggled to establish their brands. In contrast, Metro Bank, which established immediately after the 2008 credit crunch adopted a new business model, based upon a bricks and mortar presence, which has allowed that new entrant to the market to thrive and grow.

"Their original model, based upon a previous model used by its founder in New York, was to open brand new branches near tube stations, all inside the M25. It has since expanded so that it now has branches in places such as Cambridge and Southend-on-Sea."