May 18, 2020 07:37 PM

Charts of the Day: Banks Cutting More Branches as Sector Moves Online

Brick-and-mortar banks in China have continued to shut down local branches and ATMs to cut costs as they move more of their services online as internet banking continues its rapid rise.

Data from China’s top banking regulator showed that Chinese banks closed 826 branches (link in Chinese) in the first four months of 2020, about 70 more than in the same period last year.

The six largest state-owned commercial banks all reduced their number of branches in 2019, according to their annual reports. Agricultural Bank of China Ltd. and Industrial and Commercial Bank of China Ltd. (ICBC) each closed more than 200 branches on the Chinese mainland, the most among the “Big Six.” Many lenders continued to reduce their numbers of ATMs last year, with ICBC closing more than 7,000.

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Agricultural Bank of China has tried to employ new technologies such as 5G to make its branches smarter, and cut staff and traditional equipment to save costs, according to its 2019 annual report.

In recent years, more and more Chinese people have relied on online banking services. On average, customers could access nearly 90% (link in Chinese) of their banks’ financial services without going to a bank branch last year, up from about 63% in 2013 (link in Chinese), according to data from the China Banking Association, a self-regulatory industry body.

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New digital-first banks have seen a surge in business. Online lender Zhejiang E-Commerce Bank Co. Ltd., also known as MYBank, reported its revenue jumped to 6.6 billion yuan ($900 million) last year (link in Chinese), up significantly from 2.6 billion yuan in 2016 (link in Chinese). The bank, backed by Alibaba Group Holding Ltd.-affiliated Ant Financial Services Group, saw client deposits nearly triple from the end of 2016 to some 78.9 billion yuan at the end 2019, and outstanding loans more than double over the same period.

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Qianhai WeBank Co. Ltd., an online bank backed by internet giant Tencent Holdings Ltd., reported sixfold growth in revenue from 2016 to 14.9 billion yuan (link in Chinese) in 2019. Its outstanding loans rose more than 400% from the end of 2016 to 163 billion yuan at the end of 2019.

Contact reporter Guo Yingzhe ( and editor Gavin Cross (

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