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Mutual banks run more branches to assets

Customer-owned banks operate around four branches per $1 billion in assets, while the big four collectively run less than one shopfront per $1 billion.

The analysis of APRA data has come from the Customer Owned Banking Association (COBA), revealing that the major banks each averaged 686 branches and $847 billion in assets, as at June 2021.

Mutual banks in comparison have recorded a total of 735 branches and $169 billion in assets between them, despite the sector being one-fifth the size of an average major bank.

Collectively, customer-owned banks operate 4.3 branches per $1 billion in assets.

ANZ had 447 branches and $659 billion in assets, averaging 0.7 branches per $1 billion in assets.

CBA had the most branches of the majors, with 875 centres and $1 trillion in assets. The bank had a ratio of branches per $1 billion in assets of 0.9.

NAB had 582 branches, with $789 billion in assets – making its ratio of branches to $1 billion in assets 0.7.

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Westpac had the same ratio as CBA (0.9), with its 840 branches and $918 billion in assets.

Banking survey data has indicated customer preferences have shifted towards digital banking, as the major banks have reported branch closures, both temporary and permanent, in recent years.

Late last year, the government established a taskforce to look into the impacts of a 24 per cent fall in regional bank branches over the last four years.

A report from the Regional Banking Taskforce in November noted that at a national level, total bank branches have declined from around 5,800 to 4,500 over the last four years, while ATMs have also dropped down by around 20 per cent since hitting their peak in 2016.

Bank@Post points of presence on the other hand have held steady, with around 1,900 in regional and remote areas – but the banking services offered through the post office program are limited.

While they can withdraw or deposit cash, check their account and balances, make credit card repayments; customers cannot apply for a loan or open or close a banking account at their local Post Office.

COBA chief executive Michael Lawrence commented that in many parts of regional Australia, mutual banks will now operate the only branch left in town.

More than half of the association’s members have headquarters based outside capital cities.

However, COBA acknowledged cost pressures, including those associated with regulatory compliance and overheads, as well as evolving customer preferences can place pressure on branches.

Suggested solutions to improve banking access in regional communities include incentives for community models, digital inclusion, fair access for all banks at Bank@Post services and local government partnerships.

[Related: Westpac NZ chief economist moves to government]

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