NEW YORK–While the future of branches remains the subject of debate, with credit unions coming down on both sides of the question, the nation’s largest banks are going all in on branch expansion.
JPMorgan Chase announced this week it plans to build 500 new branches in the next three years, filling out cities it has recently entered such as Boston, Philadelphia and Charlotte, N.C.
The Wall Street Journal noted that for context, just 17 banks have more than 500 branches today, while JPMorgan has close to 5,000.
“It is a love affair with branches, just to be totally clear,” Jennifer Piepszak, a top JPMorgan executive, told analysts last year, the Journal reminded.
Since 2018, JPMorgan has opened more than 650 new branches and entered 25 new states. It is the first bank with branches in all 48 contiguous U.S. states, with executives telling the Journal the payout has exceeded expectations.
JPMorgan now has more than $2 trillion in deposits, nearly double what it had a decade ago.
Seeking One-Fifth of All Deposits
“Executives have a target of gathering 20% of the entire country’s deposits, up from 12% today, according to S&P Global Market Intelligence,” the Journal reported.
“Really every metric that we evaluate when we do investments, all of them are pointing in the right direction,” Jennifer Roberts, chief executive of the Chase consumer bank, told the Journal in an interview. “All of them are indicating that our investment has been a positive choice, and we are doubling down.”
Bank of America has also been counting on branches for its own market expansion and renovating others to defend its turf, the Journal reported. It now plans to enter nine new markets and four states in the coming years, which would bring its total to 39 states. It has 11% of all deposits today and ranks in the top two deposit holders in 23 of the 30 biggest markets, according to the report.
Not on Every Corner, But…
“JPMorgan and Bank of America aren’t looking to put a branch on every corner,” the report explained. “While building shiny new ones, they have also been shutting plenty of storefronts, especially older locations, and combining others they deem too close to each other.”
While banks have invested heavily in digital channels, as have credit unions, the leaders at the big banks believe branches remain the key ingredient to drawing in new consumer and small-business clients, even in an increasingly digital world,” according to the Journal.
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