Yahoo Finance Big four banks grilled over regional branch closures in Australia
The big four Australian banks are facing increasing scrutiny over their decisions to close branches in rural and regional areas. The Senate inquiry on rural and regional branch closures, held on Thursday, saw the CEOs of Commonwealth Bank, ANZ, NAB, and Westpac testify about their policies and the impact on local communities.
The inquiry is examining allegations that the banks are neglecting Australia. NAB was accused by Labor Senator Linda White of recording “misleading” statistics to justify branch closures. NAB CEO Ross McEwan defended the bank's approach, stating that they are not “looking for reasons to close branches”. He highlighted that the Bank@Post scheme, which offers banking services through Australia Post outlets, provides a greater number of service outlets than physical branches.
However, the offerings under the Bank@Post scheme are more limited than those provided by a full branch. Westpac CEO Peter King faced criticism for closing profitable branches while posting strong profit results. King cited that 96% of transactions from Westpac customers are now digital and only 3% of their 13 million customers solely use a branch.
Commonwealth Bank CEO Matt Comyn argued that maintaining its 728 branches at a cost of $1 billion per year was becoming increasingly unsustainable as customer demand diminished. He stated that cash transactions have fallen from 43% five years ago to 15% today, while customers transact more than $18 billion through the CBA app, an increase of 64%.
Despite this trend towards digital banking, many rural residents still rely on physical branches. This was seen in the town of Junee in NSW Riverina where locals protested against the closure of their last remaining bank - a Commonwealth Bank branch. The bank had pledged to keep all its regional bank branches open until the end of 2026, but local business owner Rhiannon Druce expressed fears that the bank would not honor its promise. She noted that digital banking was problematic due to connectivity issues in regional towns like Junee.
The Senate inquiry is considering potential recommendations to require community consultation when banks consider a branch closure or to mandate banks maintain a rural presence as part of their license obligations. The outcomes of this inquiry could significantly impact the future of banking in rural and regional Australia.
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