Birmingham Midshires name to go from high street as 470 staff face uncertain future

Birmingham Midshires name to go from high street as 470 staff face uncertain future

The name of Birmingham Midshires, the former building society which can trace its roots back to the early nineteenth century, is to disappear from the high street under a plan announced yesterday to close most of its branches and rebrand the rest as Halifax.

The Wolverhampton-based chain was bought by Halifax in 1999 and became part of the HBOS group when Halifax and Bank of Scotland merged in 2001.

Of the 67 remaining Birmingham Midshires branches, 48 are to be closed by March 2006 and the other 19 are to rebranded Halifax. When Halifax bought the chain it had 113 branches. The bank insisted that the 470 full and part-time staff affected by the decision would be offered an alternative job either at Birmingham Midshires or at Halifax.

However, union officials said they believed a high proportion of those affected may not want the changes and will seek voluntary redundancy. Gwyn Bates, Amicus national officer, said: "This is devastating news for staff and represents a further reduction in choice for the consumer. The union has worked with the company to ensure there will be no compulsory redundancies."

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"The staff will either be redeployed elsewhere in HBOS or may choose voluntary redundancies. This announcement removes Birmingham Midshires from the high street," Mr Bates said.

The brand will still be used by HBOS as its specialist mortgage arm, handling buy-to-let mortgages and self-certification products for the self-employed or those on irregular incomes. Most of the mortgage business is conducted over the telephone, through the internet or via intermediaries while 98% of its new savings business is by post or telephone.

Birmingham Midshires customers who still want to use branches will be allowed to use Halifax branches which in 75% of cases will involve a walk of less than 300 metres. About 80,000 of Birmingham Midshires' 700,000 customers had been regular users of its branches, but had not been allowed to use the 1,100-strong Halifax and Bank of Scotland network.

When the former Halifax bought Birmingham Midshires in 1999 it snatched the building society from Royal Bank of Scotland, which had been close to completing a takeover. In the intervening years, it has been turned from a traditional building society into a specialist lender with a 20% share of the buy-to-let market. HBOS believes it is the fastest growing part of its retail arm, where mortgage assets have increased from £9bn to £32bn and savings from £6bn to £12bn since 1999.

The move was announced by Nigel Stockton, managing director of Birmingham Midshires, who has been running the operation since the start of the year. Letters will shortly be sent to customers.

Meanwhile, the Co-operative Bank revealed that its interim profits had been dented by a sharp rise in charges for bad debts as customers started to incur difficulties repaying loans. The Manchester-based bank's pre-tax profits fell 8% to £60m as a result of the near-50% rise in bad debts - known as impairment charges under new accounting rules - to £44m.

As reported by other banks, Co-op experienced a rise in bad debts on credit cards. "The most significant increase has been incurred on credit card debt, in common with the rest of the industry," the bank said. "At this stage the additional charge would appear to be restricted to customers who have taken on excessive debt from a number of providers."

The bank has cut 1,750 staff since June 2004, which helped reduce staff costs by 2%, as did a reduction in pension costs caused by the move to require employees to contribute to their savings. It has committed to work more closely with its insurance arm, Co-operative Insurance Society, but admitted that opportunities for cross-selling had been "constrained" during the CIS's £34m restructuring.

The CIS is yet to settle a dispute with 2,100 financial advisers whom unions say have been asked to accept new terms and conditions or face losing their jobs.

The CIS reported an operating profit of £34m, before one-off items of £19m, against a loss of £27m in 2004. Co-operative Financial Services, made up of the bank and CIS, reported operating profit up 25% at £85m excluding the one-off item.

Guardian Unlimited © Guardian Newspapers Limited 2005