Bank branches on the decline

March 03, 2010 01:05PM

Banks are contracting their retail branches for the first time since 2002, according to research firm SNL Financial. After a decade of visibly aggressive expansion that pushed the number of bank branches up more than 15 percent nationwide, their parent corporations are reining things in. In particular, JPMorgan Chase and PNC Financial Services Group, which have each swallowed up the operations of smaller financial institutions since the downturn began, are closing hundreds of branches in order to limit overlap. But they’re not the only ones. With profits down and cost-cutting on the agenda, many banks that have survived the recession are becoming reluctant to spend the $1 million it typically costs to build new brick-and-mortar locations, which tend not to turn a profit for at least two years after opening. Birmingham, Ala.-based Regions Financial is closing 121 branches in the first quarter of this year in a move that should save $21 million per year. JPMorgan had 5,154 branches nationwide at the end of 2009, a 5.9 percent decline from a year earlier. Still, while it’s contracting on the whole, the bank is homing in on underserved areas: a slew of Florida Blockbuster stores are currently being converted to JPMorgan branches. [WSJ]