Banks Closed Nearly 3,000 Branches in 2021, Jumping 38% from 2020
The trend of banks closing branches at a rapid pace continued last year with a recent S&P Global Market Intelligence report finding that banks across the U.S. closed 2,927 branches in 2021, up 38 percent from the record-setting 2,126 closures in 2020. Banks have been reducing their branch footprints to accommodate the rising number of customers using mobile and digital banking.
“As consolidation continues and there are overlapping branches when deals are approved, there’s no need to have two branches on Main Street,” said Gerard Cassidy, head of U.S. bank equity strategy at RBC Capital Markets, according to Banking Dive.
COVID-19 accelerated the push toward digital banking, as low interest rates strained many banks and consumers looked to the convenience of mobile and digital providers to alleviate the need to leave their homes. However, as banks closed branches, corporate deal making increased; U.S. banks made 208 deals throughout 2021 with a total estimated value of $77.58 billion, the highest value since 2006.
Wells Fargo and U.S. Bank reported the highest numbers of branch closures at 267 and 257 respectively. Columbus, Ohio-based Huntington Bank, however, reported the largest percentage of branch closures as the 221 branches it shuttered represented 16 percent of its retail locations.
JPMorgan Chase opened the most branches in 2021 at 169 new locations, but when factoring in its closures, it still reduced its physical footprint by 129 branches. Bank of America opened the second-highest number of new branches last year, but still reduced its branch network due to COVID expenses tied to keeping branches open, according to its CFO Alastair Borthwick.