Bank closures 'can be resolved by branch sharing'

Spiralling rates of bank storefront closures could be resolved by firms considering branch sharing, according to the Forum of Private Business (FPB).

It was noted this has been proven to work in other countries and the trade body called on chancellor of the exchequer George Osborne to take steps to encourage more institutions to turn to this solution.

The Project Merlin figures were suggested to be putting banks off looking at this, with lending to small business down three per cent, despite higher targets being set.

Chief executive of the FPB Phil Orford said that the focus on the Project Merlin figures could be detracting from the decline in local branches.

Data from the Campaign for Community Banking Services indicates 44 per cent of local branches have closed down since 1990.

"Competition between banks is clearly important, but branch sharing shouldn't be seen as an anathema to it - it is difficult to see how reducing local services can possibly make a business more competitive," Mr Orford commented.