Whitney sees 5,000 bank branches closing
Technological and regulatory shifts have made it harder to make a living as a small banker, fueling a feeding frenzy by bigger players at the expense of the smallest banks. The U.S. bank count slipped below 8,000 this year for the first time ever.
In a report released Monday afternoon Whitney predicted that profit-strapped U.S. banks will close 5,000 branches over 18 months. That would amount to about 5% of bank offices, and would mark a new twist in a decades-long consolidation process.
The ranks of the unbanked will rise to 41 million households in 2015 from 30 million now, she says, as bankers reconsider the costs and benefits of all manner of products.
Regulators’ decision to crack down on egregious practices…will end up pushing up prices on services such as checking, prodding even more customers into the market for nonbank services such as check cashing. “Owing to an inability to price for certain risk, we believe the banking industry will simply no longer be able to service upwards of 10% of their current customer base.”