Labor strikes deal with banks to keep regional branches open

The timing of a major announcement has been questioned as the Prime Minister looks to win over voters in key regional seats.

The Australian Postal Service has questioned the timing of a move to ban regional bank closures.

The federal government has shored up bush cash services by striking an agreement with the major banks to hold a moratorium on regional branch closures until July 2027 and increasing funding for Bank@Post operations.

Under the new terms of the Australia Post agreement, ANZ has joined Bank@Post, while Macquaire has begun negotiations and HSBC will start talks with the postal service.

All of this comes as Australia Post picks up a lot of the slack for cash services, as banks have left regional and rural areas over the last decade.

Licensed Post Office Group executive director Angela Cramp said the ban was a start, but it took “co-operation from a lot of self-interested people” to make it work.

“The devil is in the details of this great announcement today. The absolute positive of it is it has validated face-to-face financial services are essential and should be delivered by Australia Post,” she said.

The postal service has been left as the only source of cash for many regional and rural communities. Picture: NewsWire / Christian Gilles

“This is out here today because an election is being called shortly and the government wants to ensure regional and rural Australia feel like they have been included and remembered.”

She said the banks had left a lot of these communities due to being unprofitable, leaving the postal service to operate cash services.

“We do believe there needs to be something like an open-the door-payment, as there is an obligation to that service whether you use it or not,” Ms Cramp said.

“It’s a tricky one, as it’s why banks are leaving. They’ve encouraged everyone to go online and they’ve made their services easier online, but you can’t get $50 out of your phone no matter how clever you are.

“That’s the problem. We are finding an increased amount of people coming to the post office for their walking around money.”

Treasurer Jim Chalmers said the announcement shored up banking services in the bush.

“Banks have a responsibility to regional Australia, and we’re making sure that they are meeting their responsibilities,” Mr Chalmers said.

“This is all about making sure that banks stay open in the bush.”

Almost 40 per cent of regional bank branches have closed since 2017, with Australian Prudential Regulatory Authority data finding nearly 800 bank branches were shuttered between 2017 and 2023.

The big four Australian banks have removed 217 ATMs in the past 12 months, while more than 8300 bank-owned ATMs were removed in the past seven years.

Almost 40 per cent of regional bank branches have closed since 2017. Picture: NewsWire / David Swift

The big four Australian banks have removed 217 ATMs over the last year. Picture: NewsWire / David Swift

NAB has committed to a new ban on closing regional branches for 2½ years, while CBA and Westpac have extended existing bans.

It builds on conditions on ANZ and Suncorp, which previously agreed to not shut any regional bank branch for three years following their merger.

The government argued that face-to-face services remained essential, especially for those in regional areas, as digital alternatives might not be accessible.

New agreements were also reached for Bank@Post services, with CBA, NAB and Westpac all reaching in-principle agreements.

CBA and Westpac have extended existing bans on regional bank closures. Picture: NewsWire / Roy VanDerVegt

NAB has committed to a new ban on closing regional branches for 2½ years. Picture: NewsWire / Glenn Campbell

ANZ also agreed to join the service under key terms, while Macquarie and HSBC will begin negotiations with Australia Post over the services.

Nearly half of NAB’s branch networks serve regional communities, with 210 of the company’s 437 branches being in rural and regional areas.

NAB group executive for personal banking Ana Marinkovic said the company “firmly” believed “face-to-face banking services remain essential for many Australians”.

“Our recent move to Saturday branch openings demonstrates our conviction that while digital is foundational, a human touch is just as important in the moments that matter for our customers,” Ms Marinkovic said.

Australia Post chief executive officer and managing director Paul Graham said he was “very pleased” with the new arrangements, which would help ensure communities without access to other services would be able to use “essential banking services” with Bank@Post on a “more sustainable 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,” Mr Graham said.

Australia Post has welcomed the new Bank@Post agreements. Picture: NewsWire / Christian Gilles

The new agreements follow a 2024 senate committee hearing into the effect of bank closures on consumers and businesses.

The committee recommended making the existing Banking Code of Conduct mandatory, under which banks would be required to undertake “meaningful” consultation with communities before shutting a branch and fund transition and ongoing services to ensure access to cash and essential banking services in the event of a closure.

To enforce the mandatory code, a regulator would have the authority to approve or defer any closure requests, with banks penalised if consultation or disclosure requirements were not met.

The committee’s final report also recommended an expansion of the Bank@Post service.

Originally published as Labor strikes deal with banks to keep regional branches open