Westpac leads the move to shut bank branches, with 167 closures last year, according to new research.
S&P Global Market Intelligence reported that Commonwealth Bank closed 73 branches in 2023, ANZ closed 72 and NAB closed 63.
S&P said the four banks have closed 1446 branches since 2018 and it expects the trend to continue this year. CBA subsidiary Bankwest has already flagged that it will close 45 branches as it becomes a digital bank.
One reason the Westpac number is so high is that it has a program of branch co-location. Following a technology upgrade in 2021, it started connecting the Westpac, St George, BankSA and Bank of Melbourne branch networks.
The Senate Rural and Regional Affairs and Transport References Committee started an inquiry into the impact of regional bank branch closures last year and is due to report next month.
My Nguyen, senior lecturer in finance at the School of Economics, Finance and Marketing at RMIT University, told S&P that the inquiry raised concerns about customers satisfaction and trust.
Nguyen said: “This is particularly pronounced in regional areas where residents often depend on face-to-face banking services. The closure of branches in these communities can be perceived as a reduction in service quality and accessibility, potentially tarnishing the banks’ reputations among the regional populace.”
APRA’s most recent points of presence survey showed that the rate of bank branch closures in Australia is accelerating, with more than 10 per cent of branches closing in the year to June 2023.
The number of branches fell 10.6 per cent to 3588 in the year to June, and over the six years since 2017 the number of branches has fallen by 37 per cent.
ATM numbers are falling even faster – down 11.2 per cent to 5693 in the year to June and by 58.8 per cent over six years.
Westpac chief executive Peter King defended the bank’s provision of face-to-face services in his appearance before the Senate committee, saying the bank is investing $200 million over 10 years to partner with Bank@Post, which has around 3500 sites.
The bank has also recently announced an agreement with atmx to give customers access to 1700 more fee-free ATMs, of which 500 are in regional Australia.
“We are co-locating in regional centres, which allows us to invest and stay in those locations,” King said.
However, S&P cited submissions to the committee that pointed out branch closures particularly disadvantage remote first nations communities and vulnerable people in regional communities, and increased scam risk for older people who are not digitally savvy.