CHARLOTTESVILLE, Va. — Banks are reducing their number of branches to increase efficiency and boost sluggish revenue growth, according to a new report from SNL Financial.
Banks collectively reduced their U.S. branch total by 1,487 locations in 2013.
In mid-2012, Cleveland-based KeyCorp launched an efficiency move that included consolidating 81 branch locations, or approximately 8% of its franchise by the end of 2013. Bank of America, PNC Financial Services Group, and SunTrust Banks closed even more branches than Key during 2013, the SNL report shared.
The move by Key led to annualized cost savings of $241 million.
"Efficiency and positive operating leverage are becoming part of the fabric of Key," said the bank's president and CEO Beth Mooney during a conversation with SNL analysts in January.
SNL added that growing compliance costs, along with weak revenue growth, are encouraging consolidation. Capital One Financial, Hancock Holding Co. and Citigroup were among others actively trimming branch counts.
Banks are not just closing offices, the SNL analysis revealed, they are also working to downsize what they have, some cutting office space at selected locations in half.
