Commonwealth Bank hits pause on branch closures for parliamentary probe

Commonwealth Bank has broken ranks with its main rivals to halt branch closures while a parliamentary committee examines the reasons for closures and the community impact.

CBA has made an assurance on branch numbers. Picture: NCA NewsWire/Bianca De Marchi

Commonwealth Bank has broken ranks with its main rivals to pause branch closures while a parliamentary committee examines the reasons for closures and the community impact, after scores of branches disappeared in the past six months.

The issue of branch closures was referred to the Rural and Regional Affairs and Transport References Committee last week for an inquiry, and a report is scheduled to be completed by December. The committee is accepting submissions on the matter until March 31, in response to concerns about the impact the withdrawal of face-to-face banking services may have in some regional areas and towns.

A CBA spokesman said that, following a request from the Senate committee, the bank would not close any regional branches “while the inquiry is under way in 2023”.

“As an additional sign of good faith, while the inquiry is under way … CBA will postpone the closure of two branches already announced. We continue to welcome constructive engagement with government, industry and communities – an approach demonstrated by our recent work with all members of the Regional Banking Taskforce,” the spokesman added.

“CBA looks forward to assisting the inquiry, and continuing to engage with our customers and communities, as we collectively respond to the digitisation of the economy and banking services.”

Respective spokespeople for National Australia Bank and Westpac declined to comment. An ANZ spokesman said: “ANZ is considering the matters raised in the Senate inquiry’s terms of reference and will engage constructively with the inquiry.”

As part of ANZ’s proposed takeover of Suncorp Bank, the major lender has committed to no net job losses at Suncorp Bank in Queensland for three years, and to not closing the target’s branches over the same period. However, ANZ has not made the same ­assurances for its own staff and branches in the state.

Westpac is in the process of cutting branches, with part of that strategy involving merging the branches of its brands, including St George, Bank of Melbourne and Westpac. More than 30 branches have been co-located, with plans to co-locate a further 100 over 18 months. Westpac is also reconfiguring branches to include banker pods, advice hubs and more self-service.

Banks have broadly argued that the shift to digital services has accelerated a move away from branch use, as they look to cut costs as mortgage growth slows.

The Australian Prudential Regulation Authority’s latest points of presence update shows 4014 bank outlets providing a “branch level of service” as at June 30, down from 4323 a year earlier. Assessing the trend over a longer period reveals a more startling drop, with the number of outlets providing a “branch level of service” tumbling almost 30 per cent since 2017.

The data for inner-regional areas showed 965 branch level of service outlets as at June 30, down from 1024 a year earlier and 1320 in 2017. For outer-regional areas there were 569 outlets with branch services as at June 30, compared to 598 a year earlier and 817 in 2017.

The committee will assess the extent of branch exits, the “economic and welfare impacts of bank closures” on customers and ­regional communities, and whether that has curtailed access to cash.

It will also gauge the effectiveness of banking statistics in “capturing and reporting” regional service levels, including APRA’s points of presence data.

Originally published as Commonwealth Bank hits pause on branch closures for parliamentary probe