The news that Lloyds will be closing yet more branches will not come as much of a surprise given that almost two banks are closing their doors every single day and more than 1,500 communities no longer have access to even a single branch.

There will be more bad news to come, and it will be local businesses and ordinary people in deprived areas that will pay the price as banking executives grapple with the costs of Brexit on top of £75bn in fines, compensation and legal expenses thanks to previous misdeeds.

A bank closing its doors reduces SME lending growth in that area by 63% on average, rising to 104% when the branch in question is the last in town. The impact is hugely damaging to the local economy, especially as in nine out of 10 cases the banks that are closing are situated in areas where median household income is below the national average of £27,600.

Move Your Money, a not-for-profit organisation that campaigns for ethical banking, has found that the closure of a bank branch sees lending to businesses in that postcode fall by £1.6m over the course of a year. This is a huge loss of investment in areas where unemployment is high and high streets are full of boarded up shop fronts.

Over two-thirds of small business customers state that having access to a bank branch is important to them, and the importance of a high street branch stretches far beyond traders having somewhere to go to deposit their cash or nascent firms having ready access to capital.

When a bank shuts up shop more often than not the cash machines disappear too and every local business in the vicinity suffers from the knock on effect. Despite the rise of chip and pin and contactless payment methods, cash still accounts for almost half of all high street sales and three-quarters of sales at newsagents and convenience stores.

Furthermore, for every withdrawal from an ATM £16 – amounting to £36bn a year – is injected directly into local stores, meaning more than a third of total high street spending is directly reliant on easy access to a cash machine.

Lloyds have not yet confirmed exactly which further branches will be closed, but in all likelihood it will branches in areas that are already struggling and can least afford to see the local economy atrophy in this way.

The banking industry and the government will continue to point to the Access to Banking Protocol as evidence that the public interest and local communities are being protected when banks close branches. But the Access to Banking Protocol is not fit for purpose – it is just window-dressing for the big banks and government alike to hide behind so it appears that they are doing something about branch closures.

What is the point of consulting with local people and businesses once the decision has already been taken? A consultation can only be meaningful if it takes place in advance of any decision on closure. An independent review of the Access to Banking Protocol is currently under way, but unless the government wakes up and stops listening to the banking lobbyists before it’s too late, the promises that will be inevitably made at every budget and autumn statement about supporting small businesses in this country should be taken with a large pinch of salt.

In their advertising and marketing campaigns, the big banks are keen to position themselves as the friends of small businesses, but nothing could be further from the truth. To paraphrase Saint Teresa of Avila, if this is how banks treat their friends, it is no wonder they have so few.

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