Bank Machine's Deprived Area Initiative

6th November 2006

BANK MACHINE’S DEPRIVED AREA INITIATIVE

Bank Machine has put forward to Link a proposal that ALL ATMs in Link-defined "deprived" areas should be free-to-use.

It should first be stated that Bank Machine does not believe in designating areas as "deprived" for the purposes of allocating ATMs. Such a designation is both patronising and insulting to the residents of such areas.

However, Link has decided to use this designation so for the purposes of clarity Bank Machine has done the same in formulating our proposals.

Essentially, at today’s transaction levels, it would cost Financial Institutions (mainly Big High Street Banks) only 7.5 million pounds per annum to make the 700 or so ATMs in Link-defined "deprived" areas free-to-use. Even if transactions TREBLED as a result of the ATMs being free, the cost would only be around 20 million pounds per annum.

If 20 million pounds seems high, contrast that with the 20+ BILLION pounds profits the same Financial Institutions earned in pure profit in 2005.

In other words, 20 million pounds is a drop in the Ocean for the Big Banks and surely a small price to pay to achieve free cash machines in all "deprived" areas by this Christmas.

Finally, critics of Bank Machine’s proposal have implied that the result would be a boost to our profits/a licence to print money.

In fact, Bank Machine only has around 60 of the 700+ pay-to-use ATMs in the Link-defined deprived areas. Since this is less than 5% of Bank Machine's ATMs, the impact on our profits will be insignificant.

The main operator of charging ATMs in the UK is the Royal Bank of Scotland Group. Logically, therefore, they would be the main beneficiary of Bank Machine’s proposal.

However, Bank Machine is quite prepared to see Royal Bank’s profits increase further if it means all residents in "deprived" areas get a free ATM service by Christmas 2006.