U.S. banks closed a record number of retail branches in 2021 as customers increasingly turn to digital banking and the industry consolidates.
On net, U.S. banks shuttered 2,927 branches last year, according to S&P Global Market Intelligence data. Banks closed nearly 4,000 branches and opened more than 1,000 branches, the analysis found.
Another record year for bank closures comes after 2020 had set the previous high as the Covid pandemic accelerated digital adoption.
“We anticipate that the downward trend in branches will continue for a number of years … as more of the transaction-orientated aspects of banking are done digitally,” Gerard Cassidy, head of U.S. bank equity strategy at RBC Capital Markets, told CNBC.
The branch closures also come as banks consolidate, with merger and acquisition deals in the sector topping $77 billion in 2021, the highest level since 2006, according to S&P Global.
“As consolidation continues and there are overlapping branches when deals are approved, there’s no need to have two branches on Main Street,” Cassidy said.
Wells Fargo was the top branch closer in 2021, closing on net 267 retail locations last year, according to S&P Global Market Intelligence.
While JPMorgan Chase was the sixth-biggest net branch closer last year, the company opened the most branches in 2021 with 169 new locations as it expands into new markets.