Westpac will instead invest more than $150 million in the branch network in the next two years.
“Big Four” Australian bank Westpac has pledged not to close any more regional bank branches until at least 2027, and will invest $150 million in its network.
The promise is the latest episode in the cashless saga and follows decisions by Macquarie Bank and BankWest to become online-only.
On May 1, Westpac announced it would extend its moratorium on regional bank closures until at least 2027.
Chief Executive of Consumer Banking Jason Yetton said Westpac heard the feedback from customers, saying there were challenges with internet connectivity and higher travel times to nearby branches.
“Westpac has been in Australia for over 207 years. We know regional communities play a critical role in Australia’s economy, and we want to make sure we are there to support them,” Mr. Yetton said.
The Australian Stock Exchange (ASX) listed bank will invest more than $150 million in its branch network over the next two years. The investment will assist more than 1,000 employees and 2.2 million customers who live and work in 182 regional areas.
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“With many regional areas being thriving business and job hubs, this also benefits our small and agri-business customers who have built strong relationships with our bankers who live and work in the area, and understand the local business landscape,” he added.
The bank also has a partnership with Australia Post, providing cash to 1,800 communities in regional areas, this involves a $200 million investment over 10 years with the postal service.
“Bank@Post remains an important part of how we deliver banking services to regional areas, so we’re continuing to work with Australia Post to bolster these services for customers and small businesses,” Mr. Yetton said.
11 Percent Rise in Virtual Banking
The move to maintain regional branches comes despite the bank’s data showing an 11 percent rise in virtual banking.
Westpac revealed 5.92 million customers are using Westpac banking apps and online platforms.
For this reason, the roll-out includes a plan to “educate customers” on the benefits of digital banking solutions to “help address the barriers on digital inclusion in regional Australia.”
“Whether it’s a small business choosing tap to phone to take payments at the markets or a farmer managing invoices from their tractor via our app, the way our regional customers are choosing to bank has changed, with many preferring the ease of having a bank in their pocket,” Mr. Yetton said.
Recent Branch Closures
In March, BankWest announced it would becoming a digital only bank, closing or converting all remaining branches it operates by October.
BankWest is a subsidiary of Australia’s largest bank, the Commonwealth Bank of Australia (CBA), which trades on the ASX.
Western Australian regional towns impacted by the closures include Bunbury, Albany, Kalgoorlie, Katanning, Busselton, Manjimup, Margaret River, Katanning, Esperance, Merredin, Moora, Narrogin, Northam, Geraldton, Broome, Karratha, Kununurra, and Port Hedland.
The move was described as “outrageous” by Finance Sector Union national assistant secretary, Jason Hall.
“This is an outrageous decision by Bankwest which has completely abandoned its customer base in order to cut costs and become a digital bank,” Mr. Hall said.
Meanwhile, Macquarie Bank, also listed on the ASX, is also transforming into a digital-only bank, albeit the company has traditionally focused on institutional banking.
Customers will be unable to deposit or withdraw cash or checks over the counter at any Macquarie branch from late May.
Meanwhile, National Australia Bank announced earlier it would be closing at least 13 branches across the country. The bank provides an online tool where customers can check which branches have closed.
Currently, 11 branches are earmarked for closure including six in regional New South Wales, three in country Queensland, and one in South Australia and Victoria.
“With more customers choosing to bank online, over the phone, or by video, and because fewer customers are using branches to do their banking, we’ve made the difficult decision to close some of our branches,” the bank said.
Australian banks closed 424 branches and 718 automatic teller machines (ATM) during the 2023 financial year, data from the Australian Prudential Regulation Authority shows—of these branches, 122 were in regional and remote areas.
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