APRA confirms bank branch closure trend

The Australian Prudential Regulation Authority (APRA) has recently released its 2023 statistics for authorised deposit-taking institutions’ (ADIs) points of presence, which highlight a continued decline in bank branches up to 30 June 2023.

The latest statistics revealed a reduction of 424 branches across Australia in the financial year 2023 (11 per cent), including 122 branches (7 per cent) in regional and remote areas.

APRA stated: “This continues a trend that has seen branch numbers decline by 34 percent in regional and remote areas and 37 percent overall since the end of June 2017.”

Over a six-year period, 2,106 bank branches have closed across the country, including 798 in regional and remote areas.

This data coincided with an ongoing Senate inquiry into regional bank branch closures, which investigates the impact of widespread closures of regional banking services on communities.

While the inquiry acknowledged that the demand for digital banking has contributed to branch closures, it also questions the role major banks have played in advancing this agenda.

Moreover, the mutual and community banking sector has emphasised its role in serving communities when other banks exit.

The committee’s objectives include assessing the economic and welfare consequences of branch closures in regional Australia and understanding the processes employed by banks to close branches and the justifications behind these actions.

The closures came despite three of the four major banks halting bank branch closures while the inquiry takes place, with the National Australia Bank (NAB) arguing that moratoriums have not historically prevented closures, thus it was not the “right course of action”.

APRA said it was “closely monitoring the progress of the Senate inquiry into bank closures in regional Australia and will continue to support its work."

APRA reviews points of presence

Concurrently with the Senate inquiry, APRA is reviewing its points of presence statistics and began consulting with stakeholders in April this year, in response to a recommendation of the Regional Banking Taskforce.

The taskforce recommended that APRA review its points of presence collection to better capture indicators of how banking services are accessed, including through digital channels.

APRA is assessing the feedback provided by submissions and is “engaging in further discussions with relevant stakeholders.”

APRA anticipates launching a second round of consultation in 2024.

As the national data collection agency for the financial sector, APRA collects points of presence information from banks, credit unions and building societies and publishes it annually.

These statistics provide a detailed listing of the physical banking service channels available to Australians, including branches, ATMs and EFTPOS facilities.

[Related: APRA consults on bank branches data amid closures]