Challenger bank Virgin Money is reportedly evaluating its plans to shut down its physical branch locations as lenders begin to increasingly focus on reducing the potentially negative impact of an economic downturn, resulting from the coronavirus (COVID-19) outbreak.
Hundreds of jobs, which had been created for redundancy purposes, might now be placed on hold as Virgin Money’s management reviews whether it should close down its brick-and-mortar bank locations.
Last month, Virgin Money had announced its plans to cut at least 500 jobs, which was part of the challenger bank’s integration with Clydesdale and Yorkshire Banking Group (CYBG).
Virgin Money also revealed that it will close down 22 branches during this year and 30 other locations will be consolidating into a single CYBG or Virgin Money branch.
Banks have been focusing on reducing operational costs by shutting down branches as an increasing number of consumers switch to digital banking services.
Virgin Money’s announcement has come only a few days after Lloyds revealed it would be suspending 780 of its planned job cuts across all its branches.
The job cuts had been announced last month, as part of a budgeting effort by the challenger bank, which aims to reduce the size of its physical branch network. This, as the overall demand for brick-and-mortar branches has declined significantly during the past few years.
A Lloyds representative stated:
“At this uncertain time, we have made the decision to stop the structural changes that were due to take place for some of our teams. Our focus is on supporting our customers and colleagues during this unprecedented time.”
The Bank of England (BoE) recently ordered local banks and building societies to keep their branches open if they can manage to do so. The BoE also recommended closing down non-essential services in order to prevent the further spread of the coronavirus.