Australia has seen a record rate of decline in total physical bank branches over the last financial year, with more than one in 10 branches closing across the country.
The latest points of presence statistics from prudential regulator APRA reveal that 424 branches closed across Australia in the year to 30 June 2023, representing a loss of 11 per cent of branches.
This was the highest rate of overall decline since 2017, when revised points of presence reporting metrics were adopted by the regulator.
Regional and remote Australia lost 122 branches, accounting for around seven per cent of the remaining branch network. This was the largest year-to-year drop in the regional branch network in five years.
According to APRA, it also continues a trend that has seen branch numbers decline by 34 per cent in regional and remote areas, and 37 per cent overall, since the end of June 2017.
Other face-to-face interaction points (including Bank@Post and other bank services that do not meet all minimum branch requirements), despite seeing a modest 0.2 per cent increase across Australia overall, also lost ground in the regions, which saw 36 fewer points of presence compared to June 30 2022.
Regional Australia also lost around 3 per cent of its ATM network, while metro areas lost more than 12 per cent (a total of 535 machines) of their ATMs over the year.
Earlier this year, three of Australia’s big four banks – ANZ, CommBank, and Westpac (though the Financial Services Union challenged the veracity of this commitment) – said they would pause regional branch closures until the conclusion of a Federal Government inquiry into regional banking closures.
CBA vowed to extend its moratorium on bank closures until at least the end of 2026.
NAB quietly lifted its regional branch closure halt in 2021, with the bank’s chief executive Ross McEwan claiming these promises ultimately prove fruitless.
“I’ve been involved in many countries where the same issues have been put forward and had moratoriums of branch closures in many areas… [with] branch closures [happening] as soon as the moratorium is off,” McEwan said at the senate inquiry in September.
With customers increasingly switching to digital banking alternatives, banks have moved to shutter their bank branches at a more rapid pace.
In response to a recommendation of the Regional Banking Taskforce, APRA is reviewing its points of presence statistics and began consulting with stakeholders in April this year.
APRA said it is currently assessing the feedback provided during a recent consultation, with the regulator expecting to launch a second round of consultation in 2024.
A total of 140 ADIs operated in Australia, and 121 ADIs to which the reporting standards applied submitted data as at 30 June 2023.
