Regions get reprieve from bank closures, expanded services

The Albanese Government has secured commitments from banks to shore up rural banking services by halting closures and joining a new scheme with Australia Post.

Under the new agreement, NAB has introduced a moratorium on regional branch closures, while Commonwealth Bank and Westpac have extended theirs. No regional branches from these banks will close before July 31, 2027.

The deal leans on the expansion of the Australia Post service Bank@Post, operating out of 3400 post offices, which will receive extended funding.

ANZ is to join the Bank@Post service as a condition of its acquisition of Suncorp Bank, with ANZ customers able to use Bank@Post services from October 1. Macquarie and HSBC are also in negotiations to join.

Bank closures have long been a political hot-potato in the regions, with 36 per cent of bank branches in regional Australia closing since 2017.

“We are standing up for regional Australia, for the communities and people and small businesses of our regions, helping to secure them the banking services that they need and deserve,” Treasurer Jim Chalmers said.

“We know that if we want a strong national economy, then regional Australia needs to be a big part of the story, and that means making sure that banking services are available to the businesses and workers and people and communities of regional Australia.”

The new deal replaces a regional services bank levy that was being considered by Federal Treasury that would have seen revenue redistributed to institutions that maintain a larger regional footprint.

The deal would have seen digital only banks like Macquarie pay into the scheme, while banks with strong regional branch networks such as Bendigo and Adelaide Bank would come out ahead.

Dr Chalmers said work on a possible levy will continue.

“We will continue to work with the banks, with stakeholders. We’ll continue to consult. There is more work to do to secure the best version of banking services for people in regional Australia, but these two announcements are very big, very substantial, very important announcements in their own right,” Dr Chalmers said.

Australian Banking Association chief executive Anna Bligh said the deal was a sign of the industry’s commitment to ”meeting the needs of customers in the bush”.

“This is a major commitment to keep regional branches open and available to customers,” Ms Bligh said.

“While Australians continue to shift to digital banking and payment platforms, banks recognise some customers still prefer face-to-face services.

“This is a major commitment to make sure regional customers can continue to visit a branch and access services if they wish to do so.”

NAB has the largest regional presence of the major banks, with 210 branches, or 47 per cent of the network, serving regional communities.

“While digital banking continues to evolve, we firmly believe that face-to-face banking services remain essential for many Australians,” group executive for personal banking, Ana Marinkovic said.

The expansion of the Bank@Post service was welcomed by Australia Post executive Paul Graham, who said was being used by “millions” across the 3500 strong network. According to Australia Post, there are 1550 communities across the country where there is no bank and communities rely on the local post office for financial services.

“The improved arrangements and ANZ’s membership help ensure Bank@Post is on a more sustainable financial pathway and that Australia Post can continue providing essential banking services in the many communities where there are no other banking services available,” he said.

“The new agreements will also help maintain the sustainability of thousands of licensed post offices, many of which are small businesses run by families who play an essential role in servicing their local communities.”