Bank of America is one of the institutions that have been shuttering their branches this year, and this is part of a continuing trend as banks have been closing locations at a rate that has not been seen since 2008. This month, Bank of America, the second-largest bank in the country, shut down a number of its offices.
The last year that the number of bank branches increased was 2009, and there was a total of almost 100,000 all over the US at that time. 14 years later, there are now less than 80,000, according to data from S&P Global Market Intelligence.
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What is the reason for Bank of America branches closing?
One obvious culprit for the closures is the rise of online banking. Clients are increasingly becoming more inclined to use online platforms, with 78% of adults in the country expressing that they prefer to make their transactions using the financial institution’s website or a mobile application.
Big banks have been investing in technology, and the improved online customer experience and expanding number of services offered have changed the behavior of clients, making them do away with in-person bank transactions. Customers feel more of a sense of control when they handle their own financial operations through online banking.
READ ALSO: At a glance: US bank branches closing in the coming weeks
The role of covid-19 in bank closures
The shift to using digital products and services was already taking place since 2010, but the process was accelerated by the covid-19 pandemic, when banks implemented social distancing guidelines and encouraged their customers to attend to their banking needs online. In 2021, banks closed almost 18% of their branches that were located within supermarket chains, and 3.1% of all their other locations, according to CNBC.
Bank mergers and acquisitions have also contributed to the branch closures, since these movements typically result in down-sizing and cutting expenses on redundant staff and facilities.
FAQs
One obvious culprit for the closures is the rise of online banking. Clients are increasingly becoming more inclined to use online platforms, with 78% of adults in the country expressing that they prefer to make their transactions using the financial institution's website or a mobile application.
Why are they closing Bank of America? ›
The bank is adjusting to the reduced demand for in-person services, which has led to the closure of some branches and the opening of others. The aim is to reduce the number of low-traffic offices. Unfortunately, this means that clients may have to travel longer distances to reach their nearest branch.
Why are so many bank locations closing? ›
Banks often pursue acquisitions of competitors to cut expenses on overlapping staff, services and facilities. The savings support profits. In recent years, closing branches has often proven integral to deal-related cost-cutting.
Is Bank of America in financial trouble? ›
Bank of America's Financial Health
In recent years, Bank of America's financial performance has been relatively stable. In 2022, the bank reported a net income of $20.4 billion, a decrease from the previous year's $27.4 billion. However, its revenue increased from $91.2 billion in 2021 to $95.2 billion in 2022.
What banks are closing down in 2024? ›
Bank of Scotland, Halifax and Lloyds to close 177 branches in 2024/25 – here's the full list, plus alternatives. Bank of Scotland, Halifax and Lloyds, which are all part of the Lloyds Banking Group, will shut at least 177 of their bank branches in 2024 and 2025, the Group has confirmed.
What's going on with Bank of America? ›
WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) ordered Bank of America to pay more than $100 million to customers for systematically double-dipping on fees imposed on customers with insufficient funds in their account, withholding reward bonuses explicitly promised to credit card customers, ...
Is Bank of America closing in 2024? ›
This list of Bank of America closures in California is the latest in a series of closures that started in 2023. The hardest-hit region is the San Francisco Bay Area, which will see more than two dozen closures by the end of 2024.
What bank is failing in 2024? ›
State regulators closed Republic First Bank in April 2024, marking the first bank failure of the year. Fulton Bank entered into an agreement with the FDIC to purchase most of Republic First's $6 billion in assets and to assume most of its $4 billion in deposit liabilities.
Is Bank of America closing over 100 branches? ›
Bank of America has closed more than 100 branches in 2023, and is preparing to close more locations next year, starting in January. One of the reasons for the closures is the rise of online banking. In recent years, competition has increased against banks that offer only online services.
What banks are going out of business? ›
Two major California banks — Silicon Valley Bank and First Republic — have failed. While some banking industry leaders have said the immediate crisis is over, stock prices for other regional banks, including PacWest and Western Alliance, fell this week.
Bank of America is the second-largest bank in America in terms of assets, and they're FDIC insured up to $250,000 per depositor. They offer fraud protection and other security features like third-party access reviews and customized reviews, so you can keep an eye on your accounts.
Is Bank of America good or bad? ›
Bank of America could be good for personal banking if you want to manage accounts such as checking, savings, CDs and investments in one place. It could also be a good choice for you if you value online and mobile banking, as its mobile app has high reviews.
Does China own Bank of America? ›
Is Bank of America Partly Owned by China? No, Bank of America is not partly owned by China. It is an American bank.
What happens if my bank branch closes? ›
If your local bank branch closes, you might consider searching for a nearby branch, finding a convenient ATM, banking online or switching to a different bank altogether.
What happens if your bank closes? ›
In most cases, the FDIC will try to find another banking institution to acquire the failed bank. If that happens, customers' accounts will simply transfer over to the new bank.
Which banks have closed the most branches? ›
Barclays has shut down the most branches, with 1,199 closing down since 2015, according to research by consumer group Which? Natwest comes in second, with 854 sites shutting in the same time period. Lloyds Bank comes in third with 747 closures, while HSBC are a close fourth with 743.
Are banks closing in America? ›
More than 220 bank branches have closed in the United States within the first two months of 2024, according to official US Government data.
Did the Bank of America go out of business? ›
“If the government did not intervene for Bank of America and the other banks, Bank of America would have failed.” Fast forward to today, BofA is thriving despite concerns over inflation and threats of a possible recession. The bank reported net income of $31.9 billion in 2021, compared with just $4 billion in 2008.
How many US banks are in danger? ›
A report posted on the Social Science Research Network found that 186 banks in the United States are at risk of failure or collapse due to rising interest rates and a high proportion of uninsured deposits.
Are more US banks closing? ›
US banks closed fewer branches in 2023 following record-shattering closures in the previous three years. Accounting for openings and closings, a net 1,409 bank branches closed in 2023, compared with 1,854 in 2022 and 2,928 — the highest on record — in 2021, according to S&P Global Market Intelligence data.
