American jobs are not even safe at the country’s largest banking institutions. Wells Fargo & Co announced plans to close 450 branches by the end of 2018—50 more than the bank announced earlier this year.
Speaking to investment analysts in San Francisco, company executives said they were looking for $2.0 billion in fresh cuts to attract new customers. This consolidation is big news for a banking giant that prides itself on having the largest retail network in the U.S., with a branch or cash machine within two miles of nearly 50% of U.S. households.
San Francisco-based Wells Fargo was founded in 1852 and is the third-largest bank in America based on deposits, third for total assets, the seventh-biggest public company in the world, and the 27th-biggest company by revenue in the U.S.
“We continue to evaluate our branch network, and base our physical distribution strategy on customer behavior, market factors, economic trends and competitor actions,” said Staci Schiller, a spokesperson for Wells Fargo. “While branches continue to be important in serving our customers’ needs, our investment in digital capabilities has enabled us to seamlessly serve our customers across channels and provide choice in how they bank with us.”
Through the end of April 2017, Wells Fargo has closed 48 branches and is on pace to close 200 by the end of the year. In 2018, the bank expects branch closures to increase to 250.
The bank said it cannot provide details on specific locations that will be closed, but many of the 2017 closures will be in close proximity to another branch. This is not expected to have a huge impact on the company’s revenues, but it will boost the company’s bottom line. The branch closing, and other efforts, will result in annual savings of $4.0 billion, twice as much as previously announced.
While the massive closures are unsettling, Wells Fargo is only beginning to catch up with America’s other big banks when it comes to closing branches. JPMorgan Chase & Co. and Bank of America have been aggressively shutting branches in recent years. Since 2012, Chase has closed nine percent of its branches and Bank of America’s branch network has shrunk by 15%. By comparison, Wells Fargo’s branch count has shrunk by just two percent.
But it appears Wells Fargo’s branch consolidation is just beginning. The company said there was a good chance additional branches would close in 2019. All of this is in addition to the 84 branches the bank closed in 2016.
“Wells Fargo plans to slash an additional $2 billion in costs,” Los Angeles Times, May 11, 2017.
“Wells Fargo Reports $5.3 Billion in Quarterly Net Income,” Wells Fargo & Co, January 13, 2017.
“Wells Fargo Today,” Wells Fargo & Co, last accessed May 25, 2017.
“Wells Fargo closing 450 branches by 2019,” Dispatch-Argus, May 12, 2017.