The branches of the four major banks have been disappearing at a rate of 10 per month.
On the 19th, an analysis of the quarterly reports of KB Kookmin, Shinhan, Hana, and Woori Banks showed that as of the first quarter of this year, the total number of domestic branches (branches + sub-branches) was 2,848. Compared to the end of last year (2,883), this represents a decrease of 35 branches over three months. Simply put, major banks are closing about ten branches every month. Compared to the end of 2021 (3,079), the number has decreased by 231.
"Where did they go?" Disappearing Banks
Looking at each bank, KB Kookmin Bank reduced its branches from 856 at the end of December last year to 818 at the end of March, closing 38 locations. Woori Bank decreased from 713 to 708 branches, while Hana Bank maintained its branch count at 593. Only Shinhan Bank saw a slight increase in domestic branches from 721 to 729, an increase of 8 branches. However, since these are corporate finance-related branches, it is difficult to say that the number of branches experienced by financial consumers has increased.
With the activation of non-face-to-face transactions such as internet banking and mobile banking, the number of offline branches and ATMs is rapidly decreasing. The four major banks have 16,748 ATMs, down 178 from 16,926 at the end of last year.
Looking at the yearly trend, the four major banks have been closing an average of 50 offline branches annually. Specifically, last year, KB Kookmin Bank had 856 branches, down 58 from 2021. Shinhan Bank had 721 branches, a decrease of 63 during the same period. Woori Bank and Hana Bank had 713 and 593 branches respectively, closing 55 and 20 branches. According to the Financial Supervisory Service, as of the end of last year, the total number of domestic bank branches was 5,800, down 1,873 from 7,673 in 2012 over the past decade.
Authorities Prepare Measures... Disclosure of Closure Reasons and Alternative Means
As banks reduce branches and sub-branches, which incur significant operating costs such as building rent and labor costs, financial consumers are experiencing increased inconvenience. In response, the Financial Services Commission finalized the 'Plan to Enhance Bank Branch Closures' last month.
According to the enhancement plan, before deciding to close a branch, banks are required to prepare an 'alternative branch,' and related information disclosure has been expanded. The existing annual management disclosure related to branch closures has been expanded to four times a year, with additional information such as closure dates, reasons, and alternative measures provided. Starting as early as August, the Bankers Association is expected to conduct comparative disclosure of branch closure statuses.
A banking industry official said, "In fact, banking operations have already been significantly streamlined, so the reduction of branches is inevitable," but added, "However, since the authorities have sent a signal and a consensus has been formed, the pace of branch closures may slow down somewhat."
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