Chinese lenders are increasingly closing down branches as online and mobile banking penetration continues to rise.
Mainland lenders have closed 430 branches in the first three months of 2021, according to data from the China Banking and Insurance Regulatory Commission's (CBIRC) annual report.
This marks an accelerated reduction after the industry closed 1,300 branches in 2020.
Digital Penetration
As a major leader by digital penetration of its population, China saw strong growth for transactions not executed via physical bank locations – or «off-counter rates».
Such transactions, which include online and mobile banking, rose 12 percent to 2,308 trillion yuan ($352.5 trillion), according to the CBIRC report.
Mobile banking transactions alone soar 31 percent to 439.2 trillion yuan – nearly one-fifth of total off-counter transactions.
Cost Management
In addition to growing digital adoption, the branch cuts are part of a broader industry move to reduce costs especially after a year of concessions where borrowers were offered cheap loans, deferred payment options and top Beijing officials even called for a 1.5 trillion yuan «sacrifice» of profits.
Mainland lenders are also rebalancing the mix of their remaining branch network with a focus on maintaining brick-and-mortar locations in counties or rural areas as part of Beijing’s goal to promote financial inclusion.
