Chinese banks cut branches at a faster pace as costs bite and digital banking grows in popularity
- Chinese banks closed 1,300 branches last year, and the trend has continued into this year amid rising costs and growing mobile banking popularity
- Postal Savings Bank of China, the lender with China’s largest branch network, insists its branches still have advantages over mobile banking
Chinese banks are accelerating the pace of bank branch closures this year as they seek to ramp up digital services and reduce costs.
Mainland lenders have closed 430 bricks-and-mortar locations in the first three months of this year, mainland media reported citing the China Banking and Insurance Regulatory Commission, that’s at a faster clip than 1,300 closures last year.
The country already boasts one of the world’s highest rates for transactions completed away from physical bank locations, known as “off-counter rates”. These transactions, which include online and mobile banking, rose 12 per cent in 2020, topping 2,308 trillion yuan (US$352.5 trillion), according to mainland media reports citing data from the China Banking Association’s 2020 annual report. Mobile banking transactions alone rose 31 per cent to 439.2 trillion yuan last year, according to the report.
However, mainland banks are facing further pressure to reduce their costs.
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