Washington, July 9, 2024 – Banks in the U.S.last week announced they would shutter 15 branches across the US to continue the trend of abandoning their bricks-and-mortar locations.
US Bank led the way with plans to close seven branches.
Bank of America will shut six of its locations and Chase a further two.
In the week July 1 to July 8, banks informed the Office of the Comptroller of the Currency (OCC) that a total of fifteen branches will be shuttered.
The closures were announced across Illinois, New Jersey, California, and Wisconsin, among other states.
In the same period retail banks opened thirteen branches, meaning there was a net loss.
The trend of banks closing their in-person branches is set to continue as they commit more and more to online services.
National banks have closed more than 400 of their branches so far in 2024.
Each week, banks must tell the Office of the Comptroller of the Currency (OCC) of branches openings and closures.
The last year in which the number of branches in the US increased was 2011, when there were more than 85,000 throughout the US, according to FDIC data. Since then the number has dropped steadily to about 70,000.
Most national banks like US Bank, Bank of America and Wells Fargo have become increasingly confident that online banking can meet most customers’ needs.
Closures can lead to significant savings. The average freestanding branch costs $2.6 million a year to run, according to Bancography, an Alabama-based consulting firm that advises banks.
Steven Reider, the founder and president of Bancography, previously told DailyMail.com that ‘banks are willing to close a branch that isn’t really overlapping any other branch on the gamble that customers are willing to drive a little bit further.’
‘I think Bank of America has leaned into that more than the other large banks have,’ he added.
Reider also noted that Bank of America’s merger history has meant it ended up with branches in rural locations – yet the industry is undergoing ‘a rural to urban conversion’.
‘Every census since 1910 has shown a greater proportion of Americans living in in urban areas than the preceding census, so as we become an increasingly urbanized country the demand in these legacy rural markets just fades away,’ he said.
Ultimately, banks are looking to consolidate the markets they are already in, and that involves placing more focus on dominating in a handful of cities.
For example, Chase is moving into Kansas City with force, Fifth Third is making similar moves into Charlotte and PNC is targeting Austin.
Though the number of bank branch closures started to ramp up through the 2010s, it was exacerbated by the pandemic, which kept people at home.
In 2023, more than 1,500 bank branches were shut for good, with California and the Midwest worst-hit. (The Mail)
