Novo Banco to close 20 branches by end of 2020

 In Banks, News

Novo Banco is to close 20 branches by the end of the year, most of them in city centres, as part of a continuing drive to cut costs and move towards digital online banking.

The bank’s CEO, António Ramalho is said, according to ECO, to be cautiously studying adjustments in the bank’s commercial network which reflects changes in customer’s banking habits.
“These are changes that we’re taking into account while working towards creating a new bank,” he said.
With this reduction in branches, the bank will end 2020 with around 355 branches all over the country, which will correspond to a total cut of 275 branches (over 40%) since the bank was set up in 2014 as a result of Banco Espírito Santo being wound up.
The CEO attended a parliamentary hearing on Tuesday in which he presented the plan to close the branches, the specific details of which will close will be announced shortly.
Left-wing MPs in the Portuguese parliament have suggested that the bank’s management is using taxpayer’s money to “clean up the bank”.
“The truth is that the market is changing, consumer needs are also changing and it is normal that the traditional branch network system would change, particularly in urban centres. Of this we have no doubt. We are cautiously studying the changes that we are working on towards creating a new bank and it is this new bank that we want to develop,” said António Ramalho.
Without divulging details about which branches are earmarked for closure, it is believed that five or six will be in Lisbon.
Novo Banco has been downsizing over the past few years partly because of changes in technology and the way people do banking and partly because of the financial difficulties it has been facing to keep afloat and rid itself of the toxic legacy of non-performing loans and debts it inherited from BES in 2014.
The bank is also currently undergoing a restructuring plan which will be completed next year.
In addition to branch closures, over the past few months the bank has let go around 100 staff. In July 115 were made redundant, most of them on early retirement and a further 20 on termination of contract by mutual agreement.