Closures part of the bank's "co-location" strategy
Westpac may close a further 100 branches over 18 months as it merges branches of its main brand with those of subsidiaries like St. George Bank, potentially leading to job cuts.
At a market briefing on Wednesday, Westpac said it had already co-located 21 branches and was “reviewing opportunities” for about 100 more in its network of 800 branches, according to a report by The Australian. Co-locating branches will allow customers of multiple Westpac brands to use the same branch. It will also allow the bank to slash expenses.
In addition to the Westpac brand, the bank includes the BankSA, St. George, Bank of Melbourne, BT and RAMS brands. Westpac’s co-location plan will see two brands operate in the same branch in areas where two outlets are close to each other.
Westpac CEO Peter King said that combining branches would allow “major cost saving” by reducing the bank’s property footprint, The Australian reported.
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“We see these initiatives simplifying the customer experience, increasing access to service as well as helping us with our cost reset,” King said. “We will have some reduction in the number of people we need in the branches because we’re coming to one, but we will seek to redeploy those people, or there may be opportunities in small business sales as well.”
Westpac is already operating co-located branches in Dubbo, Grafton, Lithgow and Port Stephens in New South Wales, The Australian reported.
Other big banks are also closing branches, driven by a shift to digital banking during the COVID-19 pandemic.
King said that while Westpac was reducing its branch footprint, the bank remained committed to having multiple brands. He also said that beginning early next year, branches would use one front-end technology system access for customers across brands, although the back end would not be merged.
King said the co-location plan would help Westpac to “commit to staying” in regional areas. He pointed out that digital transaction volumes were 30 times the volume of transactions conducted in person – meaning branch numbers would continue to dwindle as digital banking grew, The Australian reported.
“That will be reflected in our branch network size, so I do think it will come down over time,” King told the publication.
