Author: root

Retail banks are shutting thousands of branches and reducing staff in the US and the UK as they see most of the branch visitors who went digital during lockdowns may not come bank.

Fears among employees and customers of contracting Covid has also shut down many bank branches in the US.

Marquee banks

Wells Fargo, Citigroup and JPMorgan closed more than 250 branches in the first half of the year, which accounted for 1 to 5 per cent of their networks. The banks plan more reductions.

Wells Fargo, which had the highest branch count in the US at the start of the year, closed 154 branches, or 3 per cent of its domestic network, and reducing headcount by 6 per cent.

Citigroup cut its global branch count by roughly 100, or 4 per cent, with the closures spread across the US, Mexico and Asia. JPMorgan closed about 40 branches, or 1 per cent of its network.

The cuts represent a shift from the years leading up to the pandemic, when large US banks started opening new branches in a bid to grow their deposits after nearly a decade of cutbacks following the last financial crisis.

Other bank closures

New Jersey-based TD Bank had said earlier this year it will close 81 of its 1,223 retail branches in the US by April.

Cleveland-based KeyCorp said it will close at least 70 branches, about 7% of its total network, by mid-year, as more customers switch to digital transactions.

Huntington Bancshares of Ohio will close 198 branches in connection with its planned acquisition of TCF Financial Corp. of Detroit, by the second quarter of this year.

Bank of Hawaii recently announced the closure of 12 branches, while National Bank Holdings of Colorado will shutter seven branches by June 30.

Why are they shutting shop?

Low interest rates have also squeezed banks’ net interest margins, prompting them to cut operational costs elsewhere.

Banks are seeing the percentage of transactions being completed digitally constantly rising and have to think about how many branches they have. The pandemic has speeded up the shift to digital services.

The UK

More than 4,000 bank branches in the UK have closed in the past six years as lenders increase digital services for customers, said S&P Global Market Intelligence, citing data from UK consumer advocacy group Which.

In 2020, 368 bank branches alone shut down in the UK, led by Barclays which closed 105.

Already in 2021, TSB Bank plans to close 155 branches, Santander UK will shutter 111, HSBC Holdings, 82 and Barclays, 63.

Staring at extinction?

A report from Self Financial, a fintech firm, has a dire forecast for US bank branches last year. It predicts branches may become extinct by 2034. Based on trends, including the doubling of the rate of bank closures every three years, Self said the number of bank branches could fall to 40,000 by 2027 and then plunge to as low as 16,000 by 2030, the same level as in 1965. By 2034, Self all branches may be gone, it said.

Retail banks are shutting thousands of branches and reducing staff in the US and the UK as they see most of the branch visitors who went digital during lockdowns may not come bank.

Fears among employees and customers of contracting Covid has also shut down many bank branches in the US.

Marquee banks

Wells Fargo, Citigroup and JPMorgan closed more than 250 branches in the first half of the year, which accounted for 1 to 5 per cent of their networks. The banks plan more reductions.

Wells Fargo, which had the highest branch count in the US at the start of the year, closed 154 branches, or 3 per cent of its domestic network, and reducing headcount by 6 per cent.

Citigroup cut its global branch count by roughly 100, or 4 per cent, with the closures spread across the US, Mexico and Asia. JPMorgan closed about 40 branches, or 1 per cent of its network.

The cuts represent a shift from the years leading up to the pandemic, when large US banks started opening new branches in a bid to grow their deposits after nearly a decade of cutbacks following the last financial crisis.

Other bank closures

New Jersey-based TD Bank had said earlier this year it will close 81 of its 1,223 retail branches in the US by April.

Cleveland-based KeyCorp said it will close at least 70 branches, about 7% of its total network, by mid-year, as more customers switch to digital transactions.

Huntington Bancshares of Ohio will close 198 branches in connection with its planned acquisition of TCF Financial Corp. of Detroit, by the second quarter of this year.

Bank of Hawaii recently announced the closure of 12 branches, while National Bank Holdings of Colorado will shutter seven branches by June 30.

Why are they shutting shop?

Low interest rates have also squeezed banks’ net interest margins, prompting them to cut operational costs elsewhere.

Banks are seeing the percentage of transactions being completed digitally constantly rising and have to think about how many branches they have. The pandemic has speeded up the shift to digital services.

The UK

More than 4,000 bank branches in the UK have closed in the past six years as lenders increase digital services for customers, said S&P Global Market Intelligence, citing data from UK consumer advocacy group Which.

In 2020, 368 bank branches alone shut down in the UK, led by Barclays which closed 105.

Already in 2021, TSB Bank plans to close 155 branches, Santander UK will shutter 111, HSBC Holdings, 82 and Barclays, 63.

Staring at extinction?

A report from Self Financial, a fintech firm, has a dire forecast for US bank branches last year. It predicts branches may become extinct by 2034. Based on trends, including the doubling of the rate of bank closures every three years, Self said the number of bank branches could fall to 40,000 by 2027 and then plunge to as low as 16,000 by 2030, the same level as in 1965. By 2034, Self all branches may be gone, it said.