Jeff Whalley The Mercury September 21, 2012
AUSTRALIA'S banks are likely to axe branches and cut the size of many more as online banking accelerates, research indicates.
A sharp slide in the number of transactions at bank branches will drive the overhaul, according to analysts at global investment bank Credit Suisse.
In a report penned by a team of analysts, led by Jarrod Martin, they warn branch transaction numbers are sliding by about 5 per cent a year.
"The role of the branch as a transaction centre is arguably now in structural decline," Mr Martin says.
He said recent waves of technological change, such as the introduction of mobile banking, was diminishing the role of branches.
ANZ, the Commonwealth Bank, National Australia Bank and Westpac have almost 4000 branches nationally.
If they were to cut branch numbers in proportion with the slide in transaction volumes over the next five years, up to 1000 could be axed.
In its report, the team of Credit Suisse analysts led by Jarrod Martin says the banks can avoid a "mass-branch retrenchment program".
But they will have to close some branches, position other outlets better and cut branch sizes and staff numbers, the report says.
Mr Martin says branches are still pivotal to banks, particularly given their hunger for deposits to address new international rules on balance-sheet strength.
Branch numbers can be cut gradually, "not dramatically", he says.
"We expect that Australian branch network costs can be reduced by 20 per cent to 40 per cent over a five-year period."
Analysts believe such an overhaul would likely have a significant effect on staff numbers.
The Financial Services Union estimates Australia's bank branches account for about 50,000 staff.