Banking9.10.2024

Banks closing branches and ATMs in South Africa

Two of South Africa’s major banks have closed branches in recent years, and another has significantly reduced branch square meterage as banking habits in the country shift to digital channels.

Absa and Nedbank are two examples that have significantly reduced their branch footprints.

Since the 2017/18 financial year, Nedbank has closed 57 of its brick-and-mortar locations, while Absa has reduced its footprint by a more modest 22 branches.

This is primarily due to more customers shifting to digital channels like banking apps and online banking platforms.

Nedbank recently told MyBroadband that customers using its digital channels had grown by 9% in the past year, while digital servicing volumes grew by almost 20%.

“We have seen a corresponding decrease in our in-branch volumes over the same period,” it added.

While Standard Bank has increased its number of branches in South Africa over the past five years, it has significantly reduced branch square meterage for the same reasons.

Standard Bank said in-branch transactions declined by 13% to 2.5 million during the year’s first half, while online transactions increased by 30%.

“Online transactions increased by 30% to 1.5 billion transactions with Standard Bank clients performing an average of 10,400 digital transactions per month, compared to just 0.017 transactions in branches,” it said.

Standard Bank said it had reduced branch square meters by 4% to 239,000m2 to adapt to shifting banking habits. It emphasised that it had done so without reducing customer access points.

“The number of points of representation in South Africa now standards at 654,” it added.

This means Standard Bank has opened two more branches in South Africa since the end of the 2022/23 financial year.

Absa told MyBroadband that it is enhancing its branch network while reducing floor space.

“Floor space across the branch network was reduced by 4% to 288,825m2 as reported with Absa’s interim results in August 2024,” it said.

“However, overall, branch floor space reduced by only 20% over the past four years which reflects the relevance of our branch network to our strategy and customers.”

Regarding its automatic teller machines (ATMs), Absa says it offers an extensive network of ATM channels, which it will continue to invest in and modernise.

FNB’s head of external communications and public relations, Sizwekazi Mdingi, said the bank is focused on optimising its branch representation.

“On average, the FNB branch space has reduced by 10% over the past two financial years. However, overall branch presence (represented by the number of branches) has, over the same time, increased from 606 to 624, ensuring accessibility for customers,” said Mdingi.

“Our overall number of branch representation points is forecasted to continually grow in the future, which is an indicator of the bank’s commitment to ensure convenient and optimal accessibility to all customers across all markets.”

MyBroadband compared branch numbers for South Africa’s major banks over the past five financial years, revealing that Nedbank and Absa had closed branches, while Standard Bank, FNB, and Capitec have added more.

Capitec has added the most branches in the past five years, bringing its footprint from 840 branches in 2018/19 to 866 branches in 2022/23. Standard Bank opened 23 branches over the same period.

FNB reduced its branch numbers from 619 to 614 between the 2018/19 and 2021/22 financial years. However, it added 10 in 2022/23, bringing its branch number to 624.

The table below shows how South Africa’s major banks’ branch numbers have changed between 2018/19 and 2022/23.

Bank2018/20192022/23Change
Nedbank604547-57 (-9.4%)
Absa640618-22 (-3.4%)
FNB6196245 (0.8%)
Standard Bank62965223 (3.7%)
Capitec84086626 (3.1%)

Only one of South Africa’s major banks, FNB, has expanded its ATM footprint in the past year, with Absa, Standard Bank, and Nedbank making significant reductions.

FNB added just one ATM to its network between the 2022 and 2023 financial years, while Standard Bank made the most significant cuts, removing 232 ATMs from its network.

Absa and Nedbank have removed 114 and 135 ATMs from their respective networks.

While the five-year comparison shows Absa and Nedbank have removed branches, all major South African banks have added branches in the past year.

FNB Point of Presence CEO Zibu Nqala recently told MyBroadband that expanding its branch footprint aligns with its growth strategy, which involves opening more efficient, optimally sized branches.

Nedbank wants to seamlessly integrate its digital services with its physical branches, allowing customers to access Nedbank how and when they choose.

As part of this, Nedbank adapted its branch layout with three zones:

  • Self-service — Caters for clients who want to do simple transactions on bank-owned devices.
  • Semi-assisted — Where staff educates clients on digital banking.
  • Fully-assisted — Where bankers with financial expertise assist clients with sensitive and complex transactions.

Capitec encourages its customers to use its digital channels for routine, day-to-day transactions, to reduce queues at its branches and allow more resources for more complex transactions.

“With reduced transactional pressure, our branch staff can focus on providing personalised assistance, addressing client queries, introducing new products, and offering financial advice,” it said.

“Additionally, our branches continue to serve clients who may not have adopted digital banking, prefer face-to-face interactions, or don’t have access to the necessary technology for digital banking.”

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