Together, the closed branches amount to about 10.46 million square feet (971,000 square metres) of retail space closed based on the average size of existing US bank branches, says CoStar. This does not include the reduced square footage from branch relocations.
Wells Fargo is the “poster child” of the movement away from the branches and towards digital banking services. In 2017, it closed 194 branches – the highest among all US banks – and plans to close another 800 by 2020. John Shrewsberry, the bank’s CFO, estimates the branch network shrinking to about 5,000 locations by 2020.
Wells Fargo is also reducing the amount of properties it occupies, including standalone mortgage and auto business locations. For the latter, for example, it is in the process of consolidating the operations from 57 regional sites into three major centres.
Meanwhile, Citizens Financial is reducing the overall square footage of each branch, says CoStar.
“There’s a little bit of pruning of the number of locations, but the greater element of that programme is trying to take 4,200-square-foot branches and turn them into 2,500 or 2,200 square foot branches,” says Bruce Van Saun, chairman and CEO of Citizens Financial. “I’d say, by 2021, I think we’ll have gone through 50% of the branches as the target.”
The bank has a network of 1,100 branches and intends to use the freed up money for digital tech investment.
Another large US banking player, BB&T (which closed 90+ outlets in 2017 and currently operations 2,100+ locations), has also recently unveiled its shifted focus towards digital. The bank says it will spend up to $50 million on investing in or acquiring digital fintech firms. According to W. Bennett Bradley, chief digital officer of BB&T, this “puts BB&T on an aggressive pace to more quickly navigate our digital road map and further foster a culture of innovation throughout the company”.
Banks closing the most branch locations (net) in 2017, according to CoStar:
- Wells Fargo Bank – 194 (net closures)
- JP Morgan Chase Bank – 137
- The Huntington National Bank – 134
- First Citizens Bank & Trust – 127
- Bank of America – 119
- SunTrust Bank – 119
- KeyBank – 112
- PNC Bank – 109
- BB&T – 92
- Capital One – 73