By Scott Wright

THE chief executive of Scottish Building Society has signalled the mutual’s commitment to opening branches, amid the relentless cuts imposed by mainstream banks.

Paul Denton said the oldest remaining building society in the world will officially open its newest branch on Glasgow’s Queen Street on Friday, in the same week TSB put up to 400 jobs at risk with the closure of more than 80 of its outlets.

Mr Denton, who spent more than 25 years of his career with Royal Bank of Scotland, said the society sees value in maintaining a physical presence on the high street, noting that the role performed by branches extends beyond providing transactional services.

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The society’s investment in the Queen Street branch, which will rise to £500,000 from an initial £350,000 in a 10-year lease, means it now has six in Scotland. However, its footprint extends to more than 30 sites around the country as a result of its agency partnerships with solicitors and accountants.

Mr Denton, who joined the society from the Co-op’s funeral business in June, said: “I think what people have forgotten what a branch is. Many of the decisions to close branches are based on the number of customers that actually come through the door.

“However, I am treating branches as a point of presence within communities whereby they represent brand assurance, a marketing opportunity and they clearly are there for customer service. Equally, if you get it right, they are a meeting point for community and the wider stakeholder base. We have mortgage intermediaries who are important to us, and important third party partners, as well as, most clearly, our customers themselves.”

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Mr Denton acknowledged the presence of Scottish Building Society was not in the same league as the likes of Royal Bank of Scotland and Lloyds Banking Group. But he emphasised his determination for the society to be present in communities around Scotland, which he can achieve by spreading work throughout its network. As well as Glasgow and Edinburgh, the mutual has branches in Inverness, Troon and Galashiels.

Mr Denton said: “There is no question that people’s banking has changed. I’m not trying to defend any of the larger banks’ decisions. People are using digital far more.

“The reality is while people’s choice of channel may have changed… But what I am seeking to do is change what the purpose of a branch is. It is no longer just about a transaction or function, it is a relationship, community type environment. Where else would I get the marketing opportunity on a permanent basis in the centre of Glasgow, like I have got for the investment I have made over the course of the next 10 years?”

Asked whether the society plans to open more branches, he said the current focus is to assess the customer response to the new Glasgow investment. But he added: “I’m not saying yes just yet, equally I am not saying no. Branches are important to us. We have a large number of elderly customers as part of our base [and] many customers who still use physical passbooks, and love their passbook. So it’s important for us to have that physical presence.”

Noting that his strategy is to grow the society through a “personal touch”, Mr Denton said the all of the mortgage applications are manually underwritten, without the use of scoring algorithms.

On current trading, Mr Denton said the society had just had its best month for mortgage completions for three years in October, despite the challenges brought by the low interest rate and the uncertainty caused by Brexit.

And said he said depositors were taking the chance to save more to safeguard against the continuing uncertainty.

Meanwhile, Mr Denton said he was enjoying the challenging of running the mutual, which he said is culturally different to major banks but “pleasantly so”.

He said: “We’re a small organisation, and therefore there is much more of a family feel around the culture. There’s only 75 of us working for the society; everybody knows everybody, and equally there is an opportunity to deliver and decide things more quickly than in a larger organisation.

“Despite being smaller, we are actually more fleet of foot.”