Total bank branch numbers in the US are set to
fall for the first time since 1994.
In the past 12 months, branch numbers have
fallen at seven of the largest 10 US-headquartered retail banks,
with US Bank, BB&T and Keybank the only lenders to buck the
In 1995, US branch numbers totalled 80,992 –
by 2000 the figure had reached 85,473 – and has grown every year
But in the 12 months to June 2009, US total
branch numbers grew by only 386 outlets or 0.3 percent, to reach
99,549, the smallest annual increase for 14 years.
Since then, Wells Fargo, the country’s biggest
retail bank by branches, has shuttered 223 outlets, its network
reducing from 6,668 units to 6,445.
Rival Bank of America has closed 203 units,
its branch network falling from 6,109 units to 5,900.
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At PNC, branch numbers have fallen from a peak
of 2,708 (following its $5.2 billion deal to acquire National City
in October 2008) to 2,458 in June 2010.
Other significant branch number declines have
occurred at SunTrust and Regions, down by 69 and 82 units
Regions Bank has now closed 14 percent of its
branch network in the past three years. From a peak of 2,100 units
in 2007, Regions’ network had fallen to 1,800 branches at the end
of the first half this year.
By contrast, BB&T’s relentless charge up
the league table of US banks by branches continues. In 2000,
BB&T’s branch network comprised only 449 units; it almost
doubled to reach 909 in 2005 and hit 1,551 units in June 2009.
The August 2009 acquisition of the $25 billion
asset Colonial Bank, the biggest purchase in BB&T’s 138-year
history, added a further 300 branches to the BB&T network. It
ended the first half with 1,838 units, the sixth-largest US
headquartered retail bank by branches.
The first US signs of a decline in the branch
channel reflect events in other mature banking markets. In
Australia, branch numbers are set to fall for the fourth successive
year while in the UK, total branch numbers
have fallen by 20 percent in the past 10 years.
In Scandinavia, branch numbers have fallen at
an even faster rate.
The future is
BofA has argued that it will require fewer
branches as more customers migrate to its digital channels, such as
its mobile banking platform.
BofA’s investment in its mobile
channel continues to pay off, with the largest m-banking customer
base of any US bank: around 4m active m-banking customers.
Wells Fargo is not far behind with
3.4m active m-banking customers at the end of the first half.
Brian Moynihan, BofA CEO told analysts on 16 July: “If you look
at the consumer business and you just look at the numbers of
branches we had four quarters ago versus now, you will see they are
down a couple of hundred,” and added the bank would continue to be
“hard at work on the cost structure” of its distribution