Home / Business / Markets / The death of the bank bend has been severely exaggerated

The death of the bank bend has been severely exaggerated


Decline bank branches
The sum series of US
bank branches is down only 3.5% from peak
levels.

KBW

Online banking is all the rage. But that doesn’t meant bank
branches have been rendered irrelevant.

Bank of America’s mobile business reached 22.2 million in
the first entertain of 2017. And JPMorgan, which boosts
27.3 million mobile users, is making a series of investments
in digital banking.

But according to a recent note penned by equity analysts at
Keefe, Bruyette Woods, Inc, the New York-based investment
banking firm, the sum series of US bank branches is down just
3.5% from arise levels. That’s since they still offer a valuable
purpose. 

For starters, their earthy participation serves as a powerful
sign to consumers about the brand. Therefore, when a bank
closes a bend they mostly finish up spending some-more in other areas
such as marketing.

“We determine with bank managements that timorous bend numbers
can't be a elementary cost assets for banks as it reduces the
participation of the institutions to consumers even if consumers are
not going into the branches,” the report said.

In addition, with seductiveness rates set to boost bank branches
could see their value tender increase. 

“As seductiveness rates rise, the economics of branches will improve
despite fast changes in technology,” the study said. 

As such, instead of a decrease in branches, it is some-more likely that
bank branches will shrink.

The report said:

“There does not seem to be a accord to boost or reduce
the series of branches significantly. Rather, there seems a view
towards shortening the block feet of existent branches and some
medium consolidation. Thus, with the economics of branches
improving and no plans for bankers for radical downsizing, we
design the trend towards only very medium reductions in branch
numbers to continue.”

Here’s Andrew Cecere, president, CEO, and executive of US Bancorp,
on Apr 19 (emphasis added):

The branches are a good source of deposits. We
commend that and we consider that’ll turn even some-more critical as
we pierce into a aloft seductiveness rate scenario.
At the
same time, you’re also right that exchange in a bend are
reducing, so 60% of exchange currently are finished digitally outside
of the branch. So what we’ve done, and we will continue
to do, is change the footprint of the bend in terms of reducing
the block footage
, and we’ve finished that for the past few
years and we continue to concentration on that.”

And here’s Marianne Lake, CFO of JPMorgan, from Apr 13:

“But we will contend that if you – we demeanour at the opening of our
branches every singular week, month, individually, put together by
market, and the very, very, very, very, very immeasurable infancy of
them, definition that only a handful do not, are essential in their
own right currently at these spreads on a extrinsic basis. So the
branches are doing very well.”

Check Also

Here’s a decisive beam to the state of any business on Wall Street, which is coming off a pale year

Shutterstock/Colin Dewar Wall Street investment banks had a severe 2017 as revenues slid to $150.4 …

Leave a Reply

Your email address will not be published. Required fields are marked *