MADRID (Reuters) - Banco Sabadell (SABE.MC) plans to close 235 branches in Spain this year, around 13% of its network, as it speeds up cost cutting and digital transformation following the COVID-19 pandemic, a source with knowledge of the matter said on Thursday.
Spain’s fifth-biggest bank lender had said in January it would close 145 branches in 2020.
“There was already a plan in place to cut branches but the coronavirus is accelerating this process and the plan foresees closing now 90 branches more”, the source, adding that some of branches that had been closed during the pandemic would not be re-opened.
The plan’s initial aim was not to reduce the bank’s 16,668 staff in Spain as Sabadell was working on moving employees to other roles or duties such as remote channels, the source said.
The number of branches in Spain’s banking sector has dropped by around a half since the financial crisis in 2008, while the number of employees has shrunk by more than 30%.
Analysts expect this trend to continue as euro zone banks focus on cost savings while they grapple with the pressure from ultra low interest rates and higher loan-loss provisions to cope with the COVID-19 pandemic.
Separately, Sabadell’s British division TSB also launched a three-year strategy in November to shut 82 branches in 2020, or 15% of its network, in a turnaround plan that aims to save a total of 100 million pounds by 2022.
Reporting by Jesús Aguado. Editing by Ingrid Melander and Jane Merriman