U.S. banks want to cut branches, but customers keep coming
By Dan Freed
NEW YORK (Reuters) - Despite banks' nudging toward online tools, many U.S. customers are not ready to give up regular visits to their nearest branch, complicating the industry's efforts to slim down.
U.S. banks have trimmed the number of branches by 6 percent since it peaked in 2009, according to Federal Deposit Insurance Corp data. The 93,283 branches open at the end of last year was the lowest level in a decade. (tmsnrt.rs/2b66WKY)
Yet analysts who have examined the data say banks should have done more to offset the pressure on revenue from low interest rates and regulatory demands.
The number of FDIC-insured banks has fallen by more than 25 percent over that time even as industry assets have grown, indicating room for greater branch consolidation.
Bank executives argue, however, that branches remain crucial for acquiring new customers and doing more business with existing ones. Closures, they say, would hurt revenue more than help reduce costs.
"Our customers still want to visit us," Jonathan Velline, Wells Fargo's head of ATM and store strategy, told Reuters in an interview. "They're still coming to our stores and our ATMs at pretty consistent rates."
Bankers across the industry share that view. They say online banking complements traditional services for U.S. customers, but few have gone fully digital.
The United States falls somewhere in the middle among developed nations in terms of how aggressively its banks have been slimming down, according to the International Monetary Fund's population-adjusted data. They have cut relatively more branches than banks in Germany, France or Canada, but not nearly as many as those in Greece, Ireland, Spain or Italy. Continued...