Government reaches deal with banks to push pause on regional branch closures

Monday, 30 September 2019

Finance Minister Grant Robertson has announced a temporary halt to regional bank closures.

Major banks have announced a temporary pause to the closure of regional branches while they look at rolling out regional 'banking hubs'.

The Government announced on Monday that four regional banking hubs would open in Opunake, Martinborough, Stoke and Twizel to provide basic banking as part of a trial beginning in early 2020.

The hubs will feature a Smart ATM, where people will be able to make deposits and transfer money, as well as withdraw cash. Each hub will also have support staff to assist people using the ATM.

The trial was brokered by the Government with Kiwibank, BNZ, TSB, ANZ, ASB and Westpac, which will share the cost of running the hubs.

The banks have agreed to hold off closing regional branches for 12 months while the trial plays out.

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Regional bank closures have become a major political talking point.

In the two years to 2018, almost 50 Westpac, BNZ and ANZ branches closed, according to the bank workers' union.

Regional Economic Development Minister Shane Jones lashed out at the banks for the closures, noting that they came at a time of record profits for the predominantly Australian-owned banks.

In August, Jones met with ANZ CEO Shayne Elliot in Melbourne, where he raised the issue of regional branch closures.

Finance Minister Grant Robertson said the announcement would be good news for people in towns who felt cut off as banking moved online.

'I hope this will provide a solution for both the banks and local communities where it may not be economical for individual banks to maintain a branch,' Robertson said.

Jones said the hubs were good for people who had lost face-to-face banking services.

'Whānau, personal and business finances require close contact with a bank, and many Kiwis prefer face-to-face contact over online services to manage their financial matters. For many people in regional New Zealand that choice had been taken away from them,' Jones said.

Jones expected the banks would be 'surprised by the enthusiasm with which these four communities embrace the regional banking hubs'.

He hoped they would be the first of many.

New Zealand Bankers' Association chief executive Roger Beaumont acknowledged regional bank closures had meant some people had felt left behind.

'While many people hardly ever visit bank branches, some people still prefer to bank face to face,' Beaumont said.

He said each branch would ' test different ways of adapting to community demand and requirements and services will evolve over time'.

'They will provide different capabilities, with variations in technology and personal service,' he said.

The hubs would either use existing bank branches or other local infrastructure which would be arranged by a local organisation.

Nelson Mayor Rachel Reese welcomed the news that a hub would be opening in Stoke.

'I know the people of Stoke will embrace this new concept, and having staff to directly help will be welcomed by our diverse community,' she said.