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Big four banks bailing out of the bush
The Australian 12:00am March 7, 2018
Michael Roddan
The big four banks have closed more than 100 branches over the past year as they pull out of smaller towns to focus on growth corridors of Australia’s major cities.
New figures released by the bank regulator, the Australian Prudential Regulation Authority, show ANZ, Commonwealth Bank, National Australia Bank and Westpac-owned brands have reduced outlets that offer “branch level service”.
At the same time, regional lenders, including Bendigo, are ramping up their presence in country towns across Australia.
CBA closed 13 outlets offering branch-level service, the APRA figures show. ANZ closed 30 branch-equivalent outlets, while Westpac shut 49. NAB has shut 18 since the 2016 financial year.
CBA retains the nation’s biggest branch network with 1118 outlets, followed by Westpac, which has 1032, including St George, Bank of Melbourne and Bank SA-branded branches. NAB has 731 branches while ANZ has 688.
The profitability of bank branches remains under pressure from technological disruption and the digitisation of financial services — from mortgages to credit card applications are occurring online.
At the same time fewer people are using cash and visiting bank branches to do their business.
The Australian Prudential Regulation Authority said there were a total of 5841 bank branches across the country at the end of the last financial year.
This was down 63 from 5904 in the previous year.
NSW had 32 per cent of all branches, which is largely in line with the state’s share of the Australian population.
The Northern Territory has the fewest branches — just 64, or 1 per cent of the banking sector’s business. This is also roughly in line with the Territory’s share of the local population.
While most bank branches are in Australia’s largest towns, with 57 per cent of the sector’s footprint in major cities, about 1 per cent are in “very remote Australia”.
The big four banks, which control about 75 per cent of Australia’s $1.6 trillion housing market, have been targeted over their commitment to regional Australia by politicians including the Nationals’ Kevin Hogan, the Liberals’ Scott Buchholz and Labor’s Matt Thistlethwaite during the twice-yearly review by the House of Representatives Standing Committee on Economics.
Nationals MPs have applied continual pressure on the big banks to maintain services in regional areas, such as bank branches and ATMs.
Westpac boss Brian Hartzer recently told MPs he was “very conscious of the concerns in regional Australia around branches”.
He said the bank had struck a deal with Australia Post to open 3500 new transaction locations around the country.
“We have also put videoconferencing capabilities into many of our regional branches,” Mr Hartzer said.
ANZ chief executive Shayne Elliott recently told a parliamentary committee the bank also had a venture with Australia Post.
He said that where branches were no longer seeing foot traffic, ANZ was “generally leaving ATMs in those towns”.
This week Bendigo and Adelaide Bank, which controls just 2 per cent of the housing market, claimed it was too big to fail, like its major bank rivals, as it ramped up its presence in towns left behind by other banks.
“As an organisation that has more than 500 branches, including 90 in locations where we are the only branch in that location, the idea that the government would accept our failure and the implications of our removal from those locations is difficult to accept,” Bendigo chief financial officer Richard Fennell told Productivity Commission chairman Peter Harris at a meeting in Sydney.
The APRA figures show Bendigo has 524 branches.
Research from Citi estimates about 30 per cent of bank branch staff will be phased out by technology, potentially threatening 50,000 employees.
The Australian Bankers Association recently announced a group of 15 banks would continue to provide fee-free ATM services in some of Australia’s most remote communities, with 85 selected ATMs in remote parts of the Northern Territory, Queensland, WA and SA.