Powered by MOMENTUM MEDIA
lawyers weekly logo
Broker

Bank closes branches and ‘prioritises’ brokers

by Reporter7 minute read
The Adviser

A non-major lender has said that it will close nearly 30 branches, affecting nearly 200 staff, as it “prioritises its investment in digital and broker/third-party offerings to meet changing customer needs”.

In a media statement, Bankwest today (18 July) announced that it would close 29 east-coast branches over a three-week period starting 17 August.

It has said that the closures will affect about 200 employees and that the bank will be “placing a priority on supporting” the affected staff over the coming weeks.

According to the CBA subsidiary, the move forms “the latest step in Bankwest’s strategic refocus on evolving and improving its offering to retail and small business customers nationwide”.

Bankwest’s managing director, Rowan Munchenberg, said that the lender knew it “cannot match the major banks’ nationwide footprint and also deliver world-class digital services”, so it will “prioritise digital channels and broker relationships”.

Mr Munchenberg said: “Many people still value face-to-face interactions, but customers increasingly expect seamless self-service options that allow them to do their banking when and where they choose.

“We’re seeing a consistent trend of customers choosing mobile banking over in-branch options for their transaction needs, with an 88 per cent rise in app logins over the past three years.

“So, we’re transforming our organisation to respond more rapidly to these changing customer needs by adopting new ways of working and embracing new technologies.

“But we know we can’t match the major banks’ nationwide footprint and also deliver world-class digital services, so we will prioritise digital channels and broker relationships.”

The change does not impact Western Australia, where the brand has its strongest brand and established footprint.

Instead, the closures will “concentrate” its east-coast footprint into 14 “key branches”. These remaining branches will be:

Parramatta NSW
Erina NSW
Liverpool NSW
Hurstville NSW
George St NSW
North Lakes QLD
Queen St Mall QLD
Helensvale QLD
Adelaide SA
Plenty Valley VIC
Fountain Gate VIC
Bourke St VIC
Watergardens VIC
The Glen VIC


Mr Munchenberg said that the change had been a “difficult decision”, given a significant number of east-coast colleagues would be affected.

“We will work with and support impacted colleagues in the coming weeks, doing what we can to help them identify other opportunities, be they within or outside of the group,” the MD said.

“We are writing to affected customers to outline options, such as using Australia Post’s Bank@Post services and, for business customers, taking advantage of CBA branches.

“Ultimately, this change means we can provide better services to more customers in the future.”

Impacted customers are being informed of the closures and will receive guidance on alternative banking options available to them by email, letters and store signage.

Latest change in the Bankwest model

The decision to close the branches follows on from a raft of changes at the bank. In the past few weeks, Bankwest has announced that it has changed the way it remunerates brokers (with new calculations on upfront commission based on the value of the loan limit disbursed (utilised by the customer) minus the value of any offset account balances) and changes to its accreditation requirements for new brokers, which it has said reflect “evolving industry practice and regulator expectations”.

Speaking to The Adviser last week, the bank's general manager of third party, Ian Rakhit said: “I see this industry continuing to attract professional people to continue to grow our business, grow our share of the overall mortgage market, and I see the CIF recommendations particularly standing us in great stead for challenges that may be coming in the future.”

[Related: Bank announces broker accreditation changes]

default

JOIN THE DISCUSSION

You need to be a member to post comments. Become a member for free today!

Comments (13)

  • In a low credit growth environment makes sense to go a variable cost sales channel. There will be more cost cutting to come when it slows further.
    2
  • They just opened a branch in Miranda. Just like buying Aussie - CBA has come out with razor. What is CBA doing....
    0
  • Contempt. That's what the sign says: "Closed... please waste your time and call again only to find that we are still closed and have no intention of re-opening unless we can eye-gouge you for more money whilst trampling on anyone who gets in our way, including those mortgage brokers with whom you lot seem to gravitate towards in vast numbers just because they constantly outperform our "lending specialists" on every KPI"
    1
  • Great news. There should be more of it. More business for Brokers.
    0
  • Completely logical, and you could almost believe that if it wasn't coming from CBA.
    0
  • Good to hear that a lender finally realises that it is cheaper to run a 3rd party channel than a branch network. I do feel sorry for the 200 staff about to lose their jobs though.

    Clearly Bankwest's vision differs greatly from their "parent" company!
    1
  • OMG don't any of you think that the announcement was nothing but spin? Who is the muppet?
    1
  • I guess this means that brokers weren't more expensive than branches after all. Glad that we've put that old one to rest now.
    1
  • Well well well. There you have it folks. Straight from the horses mouth. Closing down branches because they cost too much to run in favour of Mortgage Brokers. Who would have thought.
    4
  • This should answer Mr Harris’s from the Productivity Commission question on cost benefit of Brokers in comparison to Branch networks

    "For smaller banks, we were able to develop some estimates of the branch costs they would potentially face, without broker assistance. But we received insufficient information from most (not all) banks, and so could not create a clear picture.

    “Thus, we can’t say whether there has been a net improvement in efficiency, even as a large sum in commissions has been added to industry costs. We have also shown in the report that brokers do produce slightly better rates for their clients than going in to the bank branch. But that benefit for consumers has been declining since the GFC. It would have been valuable to put the cost-benefit side by side.”
    2
Attach images by dragging & dropping or by selecting them.
The maximum file size for uploads is MB. Only files are allowed.
 
The maximum number of 3 allowed files to upload has been reached. If you want to upload more files you have to delete one of the existing uploaded files first.
The maximum number of 3 allowed files to upload has been reached. If you want to upload more files you have to delete one of the existing uploaded files first.
Posting as
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more
You have4 free articles left this month.
Register for a free account to access unlimited free content, or become a PREMIUM MEMBER to enjoy a wide range of benefits
You have 4 free articles left this month.
Register for a free account to access unlimited free content, or become a PREMIUM MEMBER to enjoy a wide range of benefits