Nedbank physically shrunk by 29% more last year – and it isn’t done contracting yet
- Nedbank is cutting back on retail outlets and reducing the space taken up by branches it is keeping.
- Over the last year its metric "branch floor space saved" jumped by 29%, and it is not done shrinking yet, new numbers show.
- The transactions conducted via its tellers too are down dramatically, and if that trend continues more branches will go.
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Measured by the footprint of its branches, Nedbank plans to be 4/5ths the bank it was in 2014 by next year.
Half-year numbers from the green bank on Tuesday show that its "branch floor space saved" count – one of its key metrics in what it calls a journey of optimisation – jumped by 29% between July 2018 and July 2019.
By shrinking some of its branches, and closing others, Nedbank says it has saved 37,155 square metres of space, the equivalent of around 260 averaged-sized houses.
By 2020 Nedbank intends to push that saved-space number up to 47,000 square metres, which it says represents 20% of its total branch footprint five years ago.
See also: A 260km trip to the bank: here’s how hard Standard Bank’s branch closures will hit the Northern Cape, Free State, and other provinces
Some of that saved rent is from closed branches; in the last year Nedbank cut its retail outlets by 16, it told investors on Tuesday, or around 2.6% of its total branches. But it has also been cutting back on branches that remain open, reducing the average floorspace over time.
The shrinking footprint follows a trend in the volume of interactions with tellers, previously the mainstay of the banking business – and the pace of change is quickening. Over the last year, to the end of June, Nedbank recorded a 23% decline in teller transactions as it pointed customers to online channels and self-service through ATMs and 411 new kiosks. That is up from the 16% decline it recorded at its half-year in 2018.
How many bank branches it closes in future will depend on the level of uptake in digital banking, Nedbank says.
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