Bosses at Nationwide Building Society have announced 23 commercial property closures will take place by August in an attempt to combat the economic downturn. This follows the axing of 13 commercial property branches last year, most of which affected commercial properties in deprived areas of south-east London.
However, it is not only commercial properties under the brand name of Nationwide that will be liquidated. The group also acquired Derbyshire Building Society, Cheshire Building Society and Dunfermline Building Society between the years of 2008 and 2009, following a turbulent time for financial commercial properties following the crisis that forced the demise of Northern Rock.
Nine Nationwide commercial properties will be closed in various counties across the UK, as they have become unprofitable and the company would prefer to redistribute funds to more successful areas. Additionally, ten Derbyshire Building Society commercial properties, a third of all commercial properties under the umbrella, will also be closed.
Meanwhile, three Cheshire Building Society commercial properties will be shut down, bringing the total to 23 closures, including one Dunfermline Building Society commercial property. This will come as a blow to staff there after being reassured their jobs were safe when Nationwide rescued the ailing business in 2009.
The reason for the mass closures has been put down to “streamlining”, as in a statement the company claimed that their customers would not be adversely affected by the commercial property closures. They said; “Where Cheshire and Derbyshire closures are happening, there is another Nationwide branch nearby.
“The average distance to the next nearest branch is two and a half miles. We constantly review our network and the viability of staying open in a particular location or property.”
This is the latest cutback to be revealed by the mutual savings group, but as yet no revelations about the number of staff expected to be made redundant due to the closures have been made. As well as the 13 commercial property closures last year, chief executive Graham Beale announced the dissolution of Nationwide’s network of agencies, claiming unprofitability.
These plans were announced in 2010, and meant that external commercial property companies, such as solicitor or estate agent offices, would no longer be able to operate a Nationwide building society counter within their premises.
Yet, surprisingly, it seems that Nationwide is not to be the next victim of the recession, as profits for the 2011-2012 financial year actually rose. In 2010-2011, the commercial property company made a profit of £276 million, but this was on the up in April of this year, when the business posted a pre-tax profit of £304 million.
However, Derek French, who runs the Campaign for Community Banking, believes that the 23 commercial property closures could actually cause significant damage to the company, losing money rather than saving it on unprofitable commercial properties.
He says; “Increasingly, financial institutions are being ‘accountancy-driven’ and are under cost constraints. But when the decision is made to close a branch it has wide-reaching implications.
“As Nationwide did not change the brands of Cheshire, Derbyshire or Dunfermline when it took them over, many customers will have been unaware of the changes.
“Now their branch will be going and they won’t really understand why.”
Are you a customer of Nationwide, Derbyshire, Cheshire or Dunfermline Building Society commercial properties? Were you aware of the Nationwide takeover, and will the commercial property closures affect you?
