Singapore-based OCBC Bank has reported that the branch closures during the Covid-19 pandemic have led to increased use of digital banking services.

OCBC has shuttered 22 of its 46 branches last month, including its brokerage arm OCBC Securities and its Investors Hub.

The bank urged customers to use digital banking channels for their daily banking needs.

The surge in the adoption of digital banking services has significantly depleted the traffic from its physical branches, the bank said.

Hence, the lender is rethinking its branch network strategy while continuing to invest in technology and digitization.

By moving into the digital banking space, the bank expects a higher net operating income in the long term by cutting manpower costs and keeping fewer branches open.

In an annual general meeting, OCBC CEO Samuel Tsien said: “Despite branch closures, the bank has not made overhead cost savings as its network of ATMs remains operational and continues to pay its branch staff in full.

“We do expect that the cost increase will be managed and the cost-income ratio of the bank would continue to improve.”

OCBC has reported that the number of SME accounts it opened digitally in the first quarter was threefold compared to the same quarter last year.

Its PayNow payments increased sevenfold and SME loans grew to 49% from 30% last year.