21 October 2014

BofA to cut further branches as $500 million mobile investment pays off

16 January 2014  |  6462 views  |  0 Bank of America signage

Bank of America says its branch banking network could drop below 5000 next year as mobile channels continue to take market share.

In an earnings call Wednesday, Bank of America CEO Brian Moynihan revealed that the bank has spent almost "half a billion dollars" on mobile products and services over the past three or four years. The outlay has been rewarded with continued growth in customer numbers banking through their handsets, rising to 14.4 million, from 12 million a year ago.

Mobile cheque deposit, a relatively new service introduced in 2012, now accounts for nine percent of all cheques presented to the bank.

Expanding on the implications for branch banking, BofA CFO Bruce Thompson said the number of physical bricks and mortar locations will contract further this year. The total number of branches - which fell to 5,151 in Q4 from 5,478 a year earlier - could drop to less than 5000 by year's end, Thomson said.

US banks have been experimenting with different formats for their high street outlets over the past year, cutting acreage and adding more tech and sales staff into the mix.

JPMorgan Chase, which opened a new Apple Store-style branch in lower Manhattan last year, has so far bucked the trend for branch closures, adding net new numbers to its real estate network as rival banks contracted. This could be about to change according to Seeking Alpha, which reported yesterday that the bank "announced its dropped plans to add new branches".

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