Bank branch density

from Wikipedia, the free encyclopedia

The bank office density are in banking , the relationship between population and number of existing bank branches , and is a base rate for the supply of the population with financial products .

General

Branches , branches or branches are legally and economically dependent assets of a company that are geographically separate from their registered office . A branch is therefore a bank branch subordinate to a central office, which represents an organizationally independent unit and reaches a minimum company size . The idea of ​​not just having one company location at the company's headquarters arose for companies in all branches of the economy from the marketing strategy of being present at the customer's place of residence by being close to the customer. Its purpose is to improve customer reach. The customer range provides information about how many potential customers can actually be reached by a branch:

The number of possible customers is drawn from the population of a certain region , whereby non-bankable residents ( e.g. children ) are also recorded. The bank branch density is derived from this as follows:

According to this, the density of branches is higher, the fewer residents there are in a branch and vice versa. Sometimes one also finds the reciprocal value for this . If the bank branch density is 1,000 residents per branch according to the above formula, the reciprocal value is 0.001, so a resident has to be content with 0.001 branches.

history

Due to the need for personal advice , the branch policy of credit institutions has become increasingly important worldwide since banks defined private customers as their target group . In 1837, several residents of the city of Flensburg submitted a request to the management of the National Bank to set up a branch bank in this city. It was not until February 23, 1844 that the state government granted a “patent on the establishment of a branch bank in Flensburg with the authority to create one of the same subordinate Comtoirs in Rendsburg…”. On March 13, 1846, the Deutsche Bank in Dessau received the license for the banking business , whereby it had to "expand its sphere of activity as far as possible across Germany".

It was only after 1914 that the major Berlin banks established more branches. The actual expansion of the branch network of the big banks did not begin until after 1914 and lasted until around 1926. During this period they took over the provincial banks connected to them by interest groups and converted their branches into their own. The German Banking Act (KWG) in December 1934 resulted in view of the overstaffed banking ( English over branched ) of the Weimar Republic with §§ 3 para. 1 and para. 2, § 4, para. 1b KWG 1934 a needs test for the establishment of bank branches requiring co the supervision of the local needs for a bank branch was planned. The needs test was seen as a suitable means of keeping the credit apparatus healthy and of protecting the economic fabric from shocks. Because of this needs test, the expansion of the branch networks was restricted.

The Deutsche Bundesbank has been publishing bank statistics on the development of the bank branch network since 1953 . It understands bank branches to mean all legally independent credit institutions (head offices) including their branches. In addition, a report on the development of the bank branch network is published once a year. In 1957 there was one bank branch for every 4,162 inhabitants.

Due to the “pharmacy ruling” of the BVerfG of June 11, 1958, the needs test had to be abolished in the credit system too . The Federal Administrative Court took over this requirement and in July 1958 also abolished the license requirement for the banking industry. Between 1957 and 1967 the number of branches increased by 12,135, the so-called extensification phase of retail business . A second wave of extensions to the branch network took place in Germany from 1967, even if the introduction of the ATM in May 1968 made the important branch function of cash management largely obsolete.

The electronic banking and the increase in direct banks have contributed to a reduction in the branch network, because since 1995 to 2014, a downward trend of 48%. The branches have ceded the top position as the most frequent customer contact point to online banking.

Bank branch density in Germany

Banking statistics 1995 2000 2005 2009 2014 2015 2016 2018 2019
Number of banks 3,785 3,785 2,344 2.121 1,990 1,960 1,888 1,783 1,717
number of stores 71,716 59,848 46,444 39,441 35,302 34,045 32,026 29,670 28,384

The continuing trend towards a reduction in the number of bank branches is mainly due to the reduction in the branch network and has resulted in a reduction in the density of bank branches. In 2000 there were 3,785 credit institutions, in 2005 it was 2,344 and in 2014 only 1,990. The decline was highest at 2.9% for the cooperative banks , while the savings bank sector remained constant. The number of branches fell by 2.5% in 2014 compared to the previous year to 35,302 branches. If one looks at the development of the branches since 1995, one recognizes a continuous thinning of the branch network in the German banking sector; today only 48% of the branches from 1995 are left. This is mainly due to a consolidation in the Postbank network . With 37,292 bank branches nationwide and a population of around 81.084 million, the bank branch density for 2014 was around 2,174 inhabitants per bank branch. As a result of further closings, the number of inhabitants per bank branch rose to 2,924 in 2019.

Bank branch density in an international comparison

In Europe, Belgium had the lowest density in 2007 with 2,400 inhabitants per bank branch, followed by Germany (2,068), Luxembourg (2,043), Austria (1,949), Italy (1,785), Portugal (1,759), Switzerland (1,627) and France (1,607). The highest bank branch density is found in Cyprus (856) and Spain (986). In the USA , this statistic causes difficulties because a bank branch is only a branch that can also handle payment transactions . If you take this into account, the bank branch density is very low at 2,342, even less favorable in Great Britain (2,825), Australia (3,323), Mexico (6,850) and India (11,116).

Banking aspects

If the density of bank branches is reduced, more residents will be looked after by one bank branch. If branches are closed while the number of inhabitants remains unchanged, the density of bank branches is reduced, one branch is then responsible for more inhabitants and vice versa. In mathematical terms, bank customers therefore have to travel longer to their bank than before.

The main task of a bank branch is to advise bank customers, because financial issues are based on trust and can only be dealt with through personal contact . Personal contact takes place through a personal conversation between bank employees and bank customers (e.g. financial advice , investment advice ). Unlike in many non-banking sectors, bank branches tend not to be used for customer acquisition , as there is usually a permanent business relationship ( house bank ) and the acquisition of new customers is not the main task of the branches. Increasing the number of bank branches therefore does not necessarily increase the business volume of branch banks. Conversely, because of the mostly long-term business relationships, closing bank branches does not usually reduce the business volume, but rather it helps to improve the cost-income ratio .

In October 1959, the Bundesbank was of the opinion that the “consolidation of the branch network, if it is continued at this rate for a while, would be at the expense of the profitability of the credit institutions ...”. It was argued that bank branches are only profitable if they have several thousand customers. In banking , however, there is no systematic connection between bank office density and profitability , expressed in return on equity . Rather, there is a slight negative correlation between the two business indicators . A statistically significant correlation between the density of branches and the profitability of the banks cannot be determined for each country. A higher density of bank branches can therefore be economically justified against the background of the high density of population distribution. However, if one takes into account the branch intensity , i.e. the average number of branches per bank, it is very low in Germany at 16, while in Spain it is 138 and in Great Britain it is even 260 branches per bank. From this it can be concluded that German banks are, on average, too small in terms of their operational size to generate adequate profitability.

Individual evidence

  1. ^ Stephan Paul, Lenkungssysteme in Filialbanken , 1987, p. 3
  2. ^ Heinrich Ritter von Poschinger , From the oldest time to the year 1846 , 1971, p. 279 f.
  3. ^ Friedrich Ernst Feller, Die Staatspapier- und Actien-Börse , 1846, p. 282
  4. ↑ Manfred Pohl, Baden-Württembergische Bankgeschichte , 1992, p. 122
  5. ^ Dorit Becker, Bank Operational Branch Expansion and Location Research , 1975, p. 35
  6. ↑ BVerfGE 7, 377 ; the court considered the licensing procedure for pharmacies to be incompatible with the fundamental right of free choice of occupation under Article 12 (1) of the Basic Law
  7. ↑ BVerwG, judgment of July 10, 1958, Az .: IC 177.54
  8. ↑ Harald Brock / Ingo Bieberstein, Multi- and Omnichannel-Management in Banken und Sparkassen , 2015, p. 33 f.
  9. ↑ Börsen-Zeitung issue 178 of September 17, 2014, The bank branch: Dead people live longer , p. 5
  10. ↑ Federal Association of German Banks Online version ( Memento from February 21, 2014 in the Internet Archive )
  11. ↑ Bank branches are now officially dying. Retrieved April 13, 2016 .
  12. ↑ Deutsche Bundesbank, Bank Office Report 2014 , July 2015, p. 2
  13. ↑ Deutsche Bundesbank, Bank Office Report 2014 , July 2015, p. 8
  14. ↑ Statista, the statistics portal, ranking of EU countries according to bank density in 2007, accessed on July 10, 2016
  15. ↑ Bank for International Settlements, Statistics on payment, clearing and settlement systems in the CPSS countries - Figures for 2011 , 2013, p. 147 ff.
  16. ↑ Deutsche Bundesbank, Bank Office Report 2014 , July 2015, p. 11
  17. ^ Deutsche Bundesbank, Monthly Report October 1959 , p. 60
  18. ^ Max Weber, Bankenmarkt Deutschland II: Perspektiven , in: Die Bank 7, 2002, p. 458
  19. ↑ Leo Schuster / Alex W. Widmer, ways out of the banking and stock market crisis , 2004, p. 20
  20. ^ Norbert Walter / Reinhard Lahusen, Banking Industry in Germany - Myths, Mysteries and Contrasting Reality , 2004, p. 17 f.
  21. ↑ Leo Schuster / Alex W. Widmer, ways out of the banking and stock market crisis , 2004, p. 40
  22. ↑ Hans Tietmeyer / Bernd Rolfes (eds.), Banks in search of a strategic profile , 2006, p. 11