Bank Branch 'Slimming Down' Continues in the New Year

Shinhan Bank to Consolidate and Expand Some Branches in April
NH Nonghyup and Woori Bank Also Downsizing Since Early Year
"Responding to Financial Digitalization and Diversifying Customer Demands"

It seems that the 'slimming down' of bank branches will continue into the new year. Banks explain that while they minimize the consolidation and closure of branches and sub-branches to reduce inconvenience for financial consumers, downsizing and enlarging branches is inevitable to respond to the digitalization of finance and the diversifying demands.

According to the financial sector on the 10th, Shinhan Bank will consolidate 18 branches located in Seoul, Gyeonggi, and Busan with nearby branches as of April 7. This follows the recent consolidation of 27 corporate finance centers nationwide with branches at the same locations on the 7th, creating larger centers, and now they are moving forward with further consolidations.

Since 2018 until June of this year, a total of 14,426 ATMs have been removed from banks over approximately six years. On the 24th, ATMs from commercial banks are installed on a street in Seoul. Banks are rapidly withdrawing ATMs, citing maintenance costs such as ATM management and heating and cooling expenses. Photo by Yongjun Cho jun21@

First, Gangnam Central Corporate Finance Centers 1 and 2 will merge with Gangnam Central Branch to become the 'Gangnam Central Finance Center,' while Seo Yeouido Corporate Finance Center and Hapjeong Station Corporate Finance Center will each merge with Seo Yeouido Branch and Hapjeong Station Branch to become the 'Seo Yeouido Finance Center' and 'Hapjeong Station Finance Center,' respectively. These branches are located in the same buildings but previously operated separately by roles such as corporate, retail, etc. The intention is to narrow the virtually partitioned spaces so that Relationship Managers (RMs) in corporate, retail, and wealth management (WM) can respond to various customer needs and create synergy effects within a single branch.

On the other hand, there are cases where general branches are consolidated. Seonyudo Station, Gupundari Station, Dongdaemun General Market, Haeundae, Noryangjin Station, Techno Mart, Ewha Station, Sunae Station branches, and Premier I-Park sub-branch will be consolidated into Dangsan Station Finance Center, Gildong Branch, Dongdaemun Branch, Marine City Branch, Sangdo Station Branch, Gwangjang-dong Branch, Sinchon Branch, Bundang Central Finance Center, and Gupundari Station Branch, respectively. These branches are located close to each other, ranging from a few hundred meters to several kilometers apart.

Woori Bank also recently consolidated 26 branches and sub-branches nationwide, including the Seoul Sejong-ro Finance Center, with nearby branches. This is about half a year since Woori Bank last carried out branch consolidations in July of last year. NH Nonghyup Bank also consolidated 38 branches in mid to late last month.

With the current government putting the brakes on rapid branch consolidations by banks due to concerns about inconvenience to financial consumers and vulnerable groups, the decline in the number of bank branches seems to have somewhat slowed. According to the Financial Supervisory Service's Financial Information Statistics System, the number of branches of the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup Bank) decreased by 11.7% from 4,539 as of the end of Q3 2020 to 4,010 as of the end of Q3 2022, but only decreased by 2.9% to 3,895 by the end of Q3 last year, two years later.

However, the industry explains that branch consolidation is inevitable due to the digitalization of finance and diversification of customer needs. A representative from a commercial bank said, "Under the current government, we have refrained from reducing branches as much as possible for the convenience of financial consumers," but added, "As finance becomes digitalized, retail demand is decreasing, but customer needs are diversifying, making branch consolidation and enlargement an unavoidable challenge."