Mutuality, De‐Mutualization and Communities: The Implications of Branch Network Rationalization in the British Building Society Industry

Abstract

The paper examines the withdrawal of branches from local communities by financial institutions. It assesses whether mutually owned building societies are more adept than the former societies that have converted to public limited companies (plcs), or the high street banks, in serving disadvantaged communities. The paper shows that during the mid-1990s: mutual building societies were more likely than former societies that have converted to plcs to maintain their branch network; mutual societies were less likely than banks to withdraw from socially deprived locations and more likely to open branches in such places; differences between mutual societies and convertors are less marked, but mutual institutions appear less likely than convertors to close branches in deprived communities. Among the remaining mutual building societies there are differences of perspective, with more commercially-minded societies less positive than socially-concerned mutuals about the need to maintain or even expand branches in disadvantaged areas. key words mutuality de-mutualisation building societies branch networks communities Centre for Urban and Regional Development Studies, University of Newcastle upon Tyne, Claremont Bridge, Claremont Road, Newcastle upon Tyne, NE1 7RU revised manuscript

Space of Flows, Uneven Regional Development, and the Geography of Financial Services in Ireland

“…The physical presence of banks in regions and localities can be a source of major strength. However, as elsewhere (Leyshon and Pollard 2000; Marshall et al. 2000), branches can also become a source of major weakness.…”

“…Indeed, the operation of the branch network is increasingly seen as costly in comparison with alternative delivery channels such as automated teller machines (ATMs) and telephone banking (Leyshon and Pollard 2000; Marshall and Richardson 1996; Marshall et al. 2000; Pollard 1999), or more recently, Internet banking.…”

“…In response to these pressures, banks and other credit institutions have been reorganising their branch networks, again with significant spatial effects. Branch networks have been “trimmed” (Pollard and Leyshon 2000:156), with branch closures being disproportionately concentrated in low income neighbourhoods (Leyshon and Thirft 1997) thus disadvantaging them even further (see Marshall et al. 2000:356, 359).…”

“…Further insights into the geographies of financial services have been offered by those writing specifically on the geography of retail banking and financial exclusion (e.g., Leyshon and Pollard 2000;Leyshon and Thirft 1997;Marshall et al 2000;Pollard 1999). Much of this literature directly addresses the issues of technological change and its impact on the "locational structure" of retail banking.…”

“All Gone Now”: The Material, Discursive and Political Erasure of Bank and Building Society Branches in Britain

“…The implications of closures for individuals, businesses and communities have been well documented (Argent 2002; Fuller et al 2006; Marshall 2004) and yet, despite an awareness of the negative geographical consequences and the relentless progress of closure programmes in Britain since the late 1980s, the issue of branch closure has become marginalised within policy and academic debates that seek to address the problem of financial exclusion. Although much of the pioneering academic work on financial exclusion was prompted by geographical observations of its uneven incidence (Dymski and Veitch 1996; Leyshon and Thrift 1995; Marshal et al 2000), as researchers from other disciplinary traditions have begun to work in this field so they have tended to downplay the significance of space and place in the production of financial exclusion (see, for example, Devlin 2005). Indeed, by the mid 2000s, the issue of branch closure had waned to such an extent in financial exclusion policy networks that it had been all but excluded as a legitimate concern of public policy.…”