Banks across the U.S. are closing branches, but the New York area is seeing more closures than most, Bloomberg reported on Wednesday (Feb. 19).
The area encompasses New York City, its suburbs and parts of New Jersey, “a very dense urban market in most instances, so there’s a lot of potential duplication of bank branches,” said Walter Bialas, director of research at Jones Lang LaSalle, the world’s second-largest commercial real estate services firm. He also noted that the banking industry’s mergers and acquisitions, along with the escalation of mobile apps, have contributed to the decline of physical branches.
In the past 12 months through June, the number of total branches in the U.S. dropped 6.8 percent. There was a 2.2 percent drop during the same time period a year earlier, the research showed. The industry was the biggest loser out of all the major U.S. markets in the study. The research filtered data from the Federal Deposit Insurance Corporation (FDIC).
Since 2009, bank branches have been steadily declining from a high of near 100,000. In excess of 13,200 branches have closed in the past 10 years as the industry has gone digital, JLL said. The number of branches in the U.S. shrank by more than 1,700 in the 12 months that ended in June 2017, the biggest decline on record.
Over the past three years, the top 25 U.S. banks have more than doubled their closure rate, according to the report. Regardless of closures, banks are growing – nationwide deposits are up 4.1 percent, reaching $12.8 trillion in 2019, JLL said.
Of the bigger financial institutions (FIs), U.S. Bank said it was planning to close 196 branches in 2019, but is also opening 10. Bank of America planned to shutter 129 branches. Wells Fargo plans to close 144 branches and open one. Capital One closed 72 branches and opened four, and also outfitted some sites with free Wi-Fi, power outlets, snack machines and coffee bars, according to Wisewage.
Conversely, JPMorgan Chase is opening branches, adding 50 locations in North Carolina alone. New branch applications from Chase totaled 43 percent of all new establishments for 2019.
More than half of the 3,114 counties in the U.S. lost bank branches between 2012 and 2017, with rural areas feeling the brunt of the closures.