CBA to keep regional bank branches alive a bit longer

Commonwealth Bank has vowed to keep all its regional bank branches open for at least another three-and-a-half years, as the industry faces political scrutiny over a wave of branch closures outside major cities.

With more customers switching to digital banking, banks have been shutting branches across the country at a quicker pace recently, prompting criticism from affected communities and sparking a year-long Senate inquiry into regional branch closures.

Earlier this year, three of the big four banks said they would pause regional branch closures until the inquiry concludes in December following a request from committee chair, Nationals senator Matthew Canavan. On Friday, CBA extended this commitment until at least the end of 2026.

The banking giant said it would use the three-year extension to support customers who preferred using branches, but it also highlighted ongoing growth in digital banking. CBA also said it would consider converting more regional branches to “multi-channel” branches, which close their doors at 1pm, at which point the branch staff start work in contact centres.

“Through this time of change we want to support customers in regional areas who prefer banking in a branch and so we will maintain our existing face-to-face services in these communities,” CBA’s group executive for retail banking services, Angus Sullivan, said.

“We look forward to working closely with regional communities over the next three years to refine how we better support and familiarise them with all the CBA banking services available,” he said.

CBA has the largest branch network in Australia, with 807 outlets at the end of the 2022 financial year, of which almost 40 per cent are in regional Australia. Its Australian branch numbers fell by more than 200 in the three years to June 2022.

Despite CBA’s moratorium on regional closures, banks say there has been a sharp drop in usage of branches in both cities and the country, and this is creating ongoing pressure to ultimately shut more outlets.

The Australian Banking Association told the Senate inquiry in March that over-the-counter transactions had slumped by 36 per cent in regional locations since the pre-pandemic days of 2019. The Australian Prudential Regulation Authority told the same inquiry regional and remote branch numbers had fallen by 29 per cent, a net decline of 677 branches, in the five years to June 2022.