Westpac regional landlords on notice of closures
Landlords of Westpac’s regional brand branches ought possibly plan for new tenants after JPMorgan recently argued that the regional brands should be confined to within their local markets.
Under the scenario St George would be unique to New South Wales, BankSA would stay within South Australia and Bank of Melbourne, which is pursuing a 100-branch target, would be limited to Victoria.
JPMorgan analysts Scott Manning, Bharat Anand and Vineet Ahuja point to the high number of duplicate branches in the Westpac empire.
According to their research 23% of the bank’s branches operate within close proximity.
"Nearly half of these duplicate sites are less than 200 metre from the closest alternative Westpac-branded branch.”
Most of the reduction would fall within the St George Bank network with 33 branches recommended for closure in Queensland, eight in South Australia and 12 in the ACT.
JPMorgan calculates the rationalisation savings would total $450 million.
The scale of the suggestion equates to a “radical rethink of the central cost model", with the Fairfax Media report suggesting an overhaul unlikely anytime prior to Westpac’s 200-year anniversary in 2017 as the bank’s strategy is geared towards this date.
