Europe: banking sector on decrease in major countries as customers shift to online platforms

However, there were significant variations in countries like Italy, Germany, Spain, France and the UK, thus signalling the possibility of further branch consolidation in the more overbanked continental European nations, according to figures issued by the financial research provider SNL Financial.

Spain has the highest relative branch penetration. As of the end of 2013, there were 7.18 branches per 10,000 residents, down from 8.16 branches at 2012-end. France, Italy and Germany had 5.89, 5.21 and 4.47 branches per 10,000 residents in 2013, respectively, down from 6.00, 5.40, and 4.50 branches in 2012. By comparison, the UK had only 1.80 branches per 10,000 residents in 2012, down from 1.87 in 2011.

Yet, despite the UKs relatively lower number of branches, many of the countrys largest banks intend to close more. In October 2014, Lloyds Banking Group said it planned to trim its branch count by 150 by the end of 2017, as it makes investments in its digital platforms in order to take between 50% and 70% of simple customer transactions online. In a presentation, the bank stated that the 150 net branch consolidations will be focused on urban overlaps. Branch openings will focus on London and the South East as well as its Halifax brand in Scotland.

Royal Bank of Scotland is undergoing a major restructuring of its branch network as well. It shuttered 144 branches in 2014 and, according to Moray McDonald, managing director of products in RBS personal and business banking division, the bank has identified 99 branches that it thinks it would close in 2015, although he said this was not a hard number. RBS is also in process of spinning off a network of 314 branches, which will become Williams & Glyn after the split. The European Commission had ordered RBS to sell off these branches as a condition of the GBP 45 billion state bailout that it received in 2008.

Meanwhile, the British government reportedly proposed that banks could share branches in areas affected by branch closures. However, this proposal was opposed by bank executives who favored negotiating new commercial arrangements with the Post Office network.