Banks are closing more branches as they look to cut costs and shift customers to online and mobile banking instead.
money.cnn.com / By Blake Ellis @CNNMoney January 25, 2013: 10:26 AM ET
NEW YORK (CNNMoney)
Banks are killing off branches by the thousands.
Overall, banks closed 2,267 branches last year and opened only 1,149, according to research firm SNL Financial. That resulted in a total loss of 1,118 branches nationwide — the highest level since 2005, when the firm began tracking closures.
Looking to cut costs, many banks are aggressively shuttering branches they deem unnecessary and encouraging customers to shift to online and mobile banking instead, said Nancy Bush, a bank analyst and contributing editor at SNL.
“All the costs of regulation are pressing on banking as a whole, and with a low interest rate environment it’s harder and harder to make money,” Bush said. “They have to look for a way to offset that.”
Plus, a growing number of customers are becoming so comfortable with going online or mobile banking that they have no desire to visit branches, so weeding out branches in low-growth areas is a natural step.
Bank of America (BAC, Fortune 500) has been the most aggressive in closing branches, shuttering 256 and opening only 12 last year, according to SNL. A spokeswoman said the bank is always updating its network to meet customer needs, and this includes consolidating some branches, selling others and opening “where there is a high growth opportunity.” Capital One (COF, Fortune 500), Wells Fargo (WFC, Fortune 500), Citi (C, Fortune 500) and BB&T (BBT, Fortune 500) also closed more branches than they opened last year.