Bankwest to face grilling over mass branch closures

Bankwest executives will face an inquiry into rural bank closures, a week after the company announced it will shut all its branches in favour of online services.

The Commonwealth Bank subsidiary says it will become a digital bank when it closes 45 branches across Western Australia by October, while 15 regional sites will be converted to CBA operations.

Analysts say there is still value in banks maintaining a physical presence.Credit: Glenn Hunt

Bankwest’s announcement said 97 per cent of transactions were done online, with less than two per cent of its customers visiting branches regularly.

There was an average of 30 face-to-face transactions per day in its suburban branches and 15 in its regional locations, the company said.

“I understand this will be difficult news for some of our customers and Bankwest is introducing a range of support measures to help ... regular branch users carefully through this transition,” executive general manager Jason Chan said.

Company executives are expected to face the rural banking inquiry sitting in Tom Price, in WA’s Pilbara region, on Wednesday afternoon.

Nationals senator Matt Canavan asked Bankwest to appear at the hearing, saying the closures were a disappointing decision.

“These closures will impact all the communities that they operate in, reducing banking choice and the ability to get an essential service,” said Senator Canavan, who is the committee chair.

The committee is examining why nearly 800 rural branches have shut across Australia since June 2017, leaving regional residents to travel long distances to manage their finances.

Leaders of all of the major banks have told the inquiry the rapid uptake of digital banking and decline in cash transactions have made branches less viable.

But regional councils and communities have given evidence that online banking is not reliable in areas where phone and internet connections remain patchy.

Agricultural groups have told the inquiry farmers’ relationships with local bank managers are vital for their complex business operations and loans.

The committee has been told small businesses suffer when people take their banking to neighbouring towns, while elderly and vulnerable populations are left behind without access to cash.

The Pilbara’s Shire of Ashburton, which covers 100,000 square kilometres, does not have a bank, despite being home to major natural gas and iron ore mining operations.

Residents of Paraburdoo, a mining town 1500km north of Perth, have to take a 850km round trip to the nearest bank in Karratha.

Others in the shire travel up to 700km, the council’s submission to the inquiry said.

“The Shire of Ashburton is concerned about the impact this will have on vulnerable members of our community as well as on the productivity of business,” the submission said.

The inquiry is due to report back to parliament in May.

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