In Germany, the number of bank branches has fallen significantly in recent years.
(Photo: imago/Steinach)
Frankfurt The number of bank branches in Germany has been falling for years – a trend that has increased significantly after the outbreak of Corona in 2020. Surprisingly, this development has now come to an almost complete standstill.
Last year, the number of bank branches in Germany fell by just 0.5 percent to 23,982, according to data from the European Central Bank (ECB). The decline is significantly smaller than in 2020, when the minus was more than nine percent.
At the beginning of the corona crisis, many banks closed some or even all of their branches due to contact restrictions and to protect customers and employees. They then reopened some of their branches – but not all. During the pandemic, many customers finally found that the vast majority of banking transactions can also be done comfortably from home.
It was to be expected that the branch cuts would not continue at the same pace after the significant decline in 2020, says Peter Barkow, Managing Director of the analysis company Barkow Consulting. “But it is surprising that the number of branch closures has fallen to almost zero.”
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After the big wave of consolidation in 2020, many banks paused for the time being. “They think hard about where they still need to be represented in the future and where not,” says Barkow. Despite the break in 2021, the branch closures in Germany have not ended. “It will be with us for decades to come. I don’t think the banks have found their ideal branch structure yet.”
In the euro zone, the number of bank branches fell by 3.5 percent to 114,180 last year, according to ECB data – after an eight percent drop the year before. The number of branches fell the most in 2021 in the Netherlands (minus 22.9 percent), Spain (minus 13.3 percent) and Belgium (minus 12.3 percent).
Commerzbank is considering even more branch closures
In Germany, Commerzbank, among others, is in the process of significantly thinning out its branch network. The Frankfurt money house announced at the beginning of last year that it would reduce the number of its branches from 790 to 450.
A few days ago, CFO Bettina Orlopp confirmed that the number could continue to decrease in the future. “We have to take a close look at our entire branch network because customers are moving in the direction of digital channels,” Orlopp said at an investor event. “We have to acknowledge that 450 is probably not the final number either, and that there is probably more to come.”
Deutsche Bank, HypoVereinsbank and numerous regional banks have also reduced the number of their branches in recent years. Savings banks and Volksbanks in particular are faced with a balancing act, because having a widespread presence is part of their self-image.
Savings Bank President Helmut Schleweis said last year: “Personally, I am a fan of the branch because it is close to the customer.” More and more Savings Bank customers are using digital services and doing banking conveniently from home.
“But when it comes to old-age provision or the purchase of a property, for example, customers appreciate the on-site advice and visit the branches in a targeted manner,” said Schleweis. “That’s why the branch will remain the Sparkasse’s face to the customer in the future.”
The Volks- und Raiffeisenbanken assess the situation in a similar way – and want to continue to rely on branches in addition to digital offers “in the foreseeable future”.
More: Managers expect the bank branches to end by 2026.