Big four banks chop 200 branches in cost-cutting drive

The big four banks have slashed their branch network by close to 20pc in the past five years in their cost-cutting drive.

The major banks closed the doors on 207 branches in the last year alone

The big four banks have slashed their branch network by close to 20 per cent in the past five years, targeting both regional and metro areas in a cost-cutting drive that appears to be ramping up as the lenders look to protect their profits in an increasingly competitive environment.

The major banks — which earned a combined cash profit of more than $28bn for the 2018 financial year — closed the doors on 211 branches in the last year alone, according to the latest data from the Australian Prudential Regulation Authority.

It brings the total number of branches the four lenders have shut since 2014 to 754, equivalent to a 19 per cent drop in five years that has reduced their branch footprint to a total of 3202.

Overall, there were 5314 branches in operation across the country as at June 30, according to APRA statistics. This was down 16 per cent on five years ago and 5.5 per cent lower than last year.

Westpac, which includes St George Bank, Bank of Melbourne and BankSA, has been by far the worst offender in hacking at its branches, cutting 334 since 2014, or 26 per cent of its overall network.

ANZ has shut 191 branches, or 25 per cent of its network, in the past five years, while the nation’s largest lender, CBA, has rid itself of 133 branches, or 12 per cent of its overall network. NAB has closed 96 branches, equivalent to 13 per cent of its network, in that time.

In the 12 months to June 30 alone, CBA got rid of 67 branches, Westpac shut 59, ANZ closed 53 and NAB shut 32. CBA now has 1014 branches operating across the country, compared to Westpac’s 952, NAB’s 656 and ANZ’s 580.

ATMs have also been hit hard by the banks’ cost-cutting drive, with 1079, equivalent to 8.5 per cent, ripped out across the country in the past year.

Westpac again led the pack, slashing its number of ATMs by 442. CBA got rid of 231, NAB dumped 108 and ANZ took out 31.

UBS banking analyst Jonathan Mott last month cautioned on the impact branch closures would have on the major lenders, warning branch networks were under threat from the growing popularity of mortgage brokers.

“As the banks close branches more customers are moving towards broker distribution. Branch sales fall and revenue comes under pressure. Banks respond by closing more branches,” he said.

The big four banks’ share of mortgages sold through branches has declined by a third in the past four years and currently represent 37 per cent of total system sales, down from nearly half in 2013, Mr Mott added.

A Westpac spokesman attributed the branch closures to the decline in over-the-counter transactions, with fewer than 2 per cent of transactions taking place in its branch network.

“When making any decision on branch closures, it is not a decision we take lightly. We take a number of factors into consideration, including usage, location, proximity to other services and fee-free ATMs, as well as community needs.

The Finance Sector Union earlier this month revealed that Westpac had plans to close six of its 18 St George branches in Brisbane before the end of the year, with 28 jobs set to be lost.

NAB executive general manager for retail, Krissie Jones, said the bank’s branch closures had “very much been in response to how our customers are choosing to bank with us”.

“They’re using online banking, mobile apps and telephone banking more, they’re visiting their local Bank@Post, as well as other NAB branches in the area. “

NAB in March committed to keeping its regional and rural branches open until at least January 2021.

CBA chief executive Matt Comyn, meanwhile, in May committed to the bank retaining the largest branch network in the country.