PNC will cut 280 branches by end of 2021, CEO says
PNC Financial Services Group had planned to shutter 80 to 90 branches this year as part of its strategy to lean harder on more prosperous digital sales. Aftershocks from the coronavirus pandemic have accelerated those plans.
PNC is now on track to close nearly 160 branches this year and another 120 next year, Chairman and CEO William Demchak said Tuesday at a virtual conference hosted by Barclays Capital. Combined, those cuts would be a roughly 12% decrease from the roughly 2,300 branches PNC had at this time last year, according to its latest financial filing.
“You will see us continue to thin out our network,” Demchak said. “For that to work, your digital sales have to pick up at a pace that offsets the sales you would get at the branches you are closing. So far, that is happening and then some.”
Social distancing measures put in place to control the spread of the disease have led banks to close swaths of branches. As more consumers have adopted online banking, they have sped up plans to roll out digital products and services and have decided to make permanent some branch closings that were initially supposed to be temporary.
KeyCorp in Cleveland is accelerating its plans to close branches during the pandemic, Chris Gorman, CEO of the $156 billion-asset company, said Monday at the same conference. Gorman did not say how many branches would be closed.
Associated Banc-Corp in Green Bay, Wis., is planning to close or sell 21 branches, or 8% of its network, which employ 100 full-time employees, according to a regulatory filing Monday. The $36 billion-asset company noted that teller transactions in its branches were down 20% in August from a year earlier, while active mobile users had increased by 16% since January.
In place of some branches, PNC has been opening quasi-digital “solutions centers” where customers can still consult with staff while accessing mobile workstations, ATMs and banking kiosks. The company currently has 13 of these centers open in Dallas, Houston, Kansas City, Mo., and Nashville, Tenn., with plans to open 12 more this year and 25 next year, Demchak said.
Before the pandemic, checking account openings at the average solution center were double those at a typical de novo branch, Demchak said. When the pandemic was declared, and the economy skidded to a halt earlier this year, solution-center sales declined and fell more in line with what a branch’s normal rate would be. But sales at the centers have since rebounded, Demchak said.
“What COVID has done for us is it has showed us where to prioritize investments,” Demchak said.