Bank closure ban extended to 2027, ANZ prepares to sign on to Bank@Post
A string of deals from the banking sector have been struck, amid a looming plan to punish banks with limited rural and regional presence.
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Banks in regional Australia will remain open under a two year “moratorium” extension, with the industry also announcing plans for more services from Australia Post sites.
The Australian Banking Association revealed early on Tuesday the sector had struck a deal to extend a ban on branch closures until 2027 in a move pitched as preserving access to services in regions “despite branch interactions falling by 50 per cent in recent years as customers switch to digital channels”.
The move comes after some banking majors including Westpac already confirmed they would keep branches in the regions open until 2027.
Jim Chalmers, revealing the deal early on Tuesday, said no additional regional branch closures would take place before July 2027.
“Our first responsibility is to arrest the decline, to get these moratoriums in place, to get the arrangements with Australia Post right so that we can look to work on some of those longer term issues at the same time,” he said.
But Westpac and Commonwealth Bank are still pressing ahead with plans to close branches or “co-locate” brands in a retreat from the high street.
Westpac has bundled its St George brand with Westpac in several locations, closing the separate bank branches.
CBA has also recently completed plans to close or convert all of its 45 Bankwest branches.
Only 17 of the branches were converted to CBA-branded banks, with the remainder shut.
CBA said it would also invest $100m this year upgrading branches and its ATM fleet.
The moves comes as the government deliberates on a potential levy on banking operators to incentivise them keeping branches in rural and regional Australian open.
The Treasurer said work on the rural bank levy would continue, but he noted the moratorium announcement alongside deals to extend Australia Post’s Bank@Post services went some way to addressing concerns around branch access.
ABA chief executive Anna Bligh said the industry was showing its commitment to banking in the bush.
“This is a major commitment to keep regional branches open and available to customers,” she said.
“Banks are ensuring Australians can continue to access high-quality banking services no matter where they live.”
However, the move to extend the bank branch closure ban comes after years of closures from the sector, which has slashed more than 36 per cent of locations since 2017.
The former Queensland premier said the industry was keeping its branches open despite a shift to online banking.
“Banks recognise some customers still prefer face-to-face services,” Ms Bligh said.
“This is a major commitment to make sure regional customers can continue to visit a branch and access services if they wish to do so.”
Ms Bligh, the outgoing ABA boss, who announced her retirement last week, also pointed to a new deal that sees CBA, NAB, and Westpac renew their deals with Australia Post allowing customers to access some banking services there.
The three majors have also signed new “in-principle” agreements for customers to continue accessing Bank@Post at almost 3400 post offices.
The deal sees the banks agree to pay more for access to Bank@Post, with CBA, NAB, and Westpac already paying almost $90m a year to Australia Post to provide basic banking services to their customers.
Australia Post has been pushing for banks to pay more for the service.
The ABA said negotiations were also underway for ANZ to sign-on to Bank@Post, allowing its customers to access its services at Australia Post offices.
This could see ANZ customers able to access services from October 1.
ANZ’s takeover of Suncorp Bank required the bank to attempt to sign-on to Bank@Post.
Macquarie and HSBC are also slated to start negotiations with Australia Post on Bank@Post services.
Ms Bligh said the “increased investment” in Bank@Post would “contribute to the sustainability of these services for those Australians who wish to continue to use them”.
“Our industry will continue to work with the Government to ensure banking services continue to meet the needs of customers across regional Australia,” she said.
Australia Post CEO Paul Graham said the increased fees for Bank@Post from the banks would flow to licensed post offices.
“This creates a more sustainable platform for us,” he said.
Mr Graham said the “improved arrangements” from the new deals with CBA, NAB, and Westpac as well as a looming deal with ANZ “help ensure Bank@Post is on a more sustainable financial pathway”.
“The new agreements will also help maintain the sustainability of thousands of Licensed Post Offices, many of which are small businesses run by families who play an essential role in servicing their local communities,” he said.
But Regional Australia Bank boss David Heine said the Bank@Post deal could not replicate the work of actual branches.
“We fully agree with support measures being put in place, but Bank@Post is a band-aid, and only part of the solution,” Mr Heine said.
“Many of the services offered at regional branches cannot be performed at Bank@Post. Even where services are offered, they are often inconsistent, limited and confusing for customers.”
Originally published as Bank closure ban extended to 2027, ANZ prepares to sign on to Bank@Post
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