Wall Street’s biggest banks have been shutting down branches since the financial crisis.
The reason: because they can do so without it having any real impact on the amount of business they pick up.
When Citigroup announced its third quarter earnings on Thursday October 15, it revealed its branch count has shrunk a whopping 13% in North America, from 895 to 779.
The number of Citigroup branches globally has fallen 9% in the past year to 3004.
Citi had an explanation for its branch closures that seemed to foreshadow additional shut-downs in the banking business.
“We are able to retain a significant portion of consumer deposits over time” after closing branches in a given region, Citigroup CFO John Gerspach said on the bank’s earnings call after it revealed its numbers Thursday.
Put another way: online banking is taking off in North America, and big banks are able to get by with fewer workers as a result.
It’s not just Citi — Bank of America has been trimming its brick-and-mortar operations, as well as headcount. The number of financial centres maintained by the bank fell from 4947 to 4741, according to third quarter accounts.
“Headcount continues to work its way down in our company,” Bank of America CEO Brian Moynihan said in an interview with Bloomberg TV on October 14 after earnings were announced. “That’s the expense mantra that we all talk about.”
JPMorgan has also been cutting back on the number retail storefronts, with the number of branches falling from 5613 at the end of the third quarter 2014 to 5471 at the end of the last quarter.
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