Angry about bank branches being closed in the regions: “There is no logic” | Business

“There are a lot of people asking about this and there is no logic as to why the number of branches of Swedbank in the regions has started to be reduced, for example. I don’t know why this is done.

As of today, they have over 43 chapters. One of them is in Radvilišky, which is a large city in terms of population, but is on the list of closed units. So why is it so?” – asked A. Čepononis.

He mentioned that in 2022-2023 the net profits of the banks grew twice, so it is not clear why the branches have to be closed.

“It doesn’t matter that it is a private commercial institution. It provides services for which we pay, so we have to talk about it in the committee, in the Seimas, in municipalities,” said a member of the Seimas.

Many no longer visit the departments

LBA manager Eivilė Čipkutė indicated that the reason for such actions is simple: many customers never visit the branches.

“The main factor is the digitization of the economy and the resulting changing habits. People’s use of live services is falling sharply, the vast majority are switching to digital services.

Last year, even 62 percent. respondents said that they had never visited a bank branch during the year. In five years, this number has fallen sharply, and the use of banking services on the Internet, e-mail in banking increased strongly – from 70 to 90 percent.

Thus, the changing habits of the majority of society shape the nature of financial services in Lithuania,” she explained.

According to E. Čipkutė, we are no different from other countries. Throughout the European Union (EU), the number of branches of credit institutions has been decreasing rapidly in recent years.

However, if we take a closer look at the statistics, we will see that there are all kinds of numbers.

Here in Lithuania there are 100 thousand. there are 11.2 units of credit institutions per population.

Statistics provided by LBA

The lowest such number, reaching 5.5, is in the Netherlands. This country is immediately followed by Finland, with an indicator of 6.2.

In Latvia, this figure is 6.6, and in Estonia – 7.5. So in Lithuania, compared to other Baltic countries, we really have more branches of financial institutions.

However, there are countries that have an abundance of financial institutions. Most of them are in Bulgaria. 100 thousand there are 60.5 units per population.

The number is also high in Luxembourg – 56.5, Spain – 37.4, Italy – 34.5, France – 33.3.

“Southern Europe is less digitized. Let’s put it this way – it is struggling to digitize compared to Northern Europe, including us. Our digitization is proceeding rapidly”, – E. Čipkutė named the reason for the differences.

Despite the fact that bank branches are closed, E. Čipkutė assured that residents who do not yet know how to use the internet bank have not been forgotten. Most services or answers to questions can be obtained over the phone. And if that’s not enough, bank employees can come to the precinct or municipality on the agreed day, if the clients of that region would like consultations.

“In this way, the needs of those residents who have not yet digitized and may not want to digitize,” mentioned the head of the LBA.

Photo of the Lithuanian Banks Association/Eivilė Čipkutė

He found the door locked

Algirdas Butkevičius, a member of the “Vardan Lietuvos” democrats faction, reacted to the statistics provided by the LBA about departments of credit institutions.

According to him, one should not forget that Lithuania is different from other Baltic countries. In our country, a considerable number of people still live in the regions, when at that time in Latvia the majority of the population gathered in the capital.

“And there are no gravel roads in Estonia. All regional roads are paved there, so communication is much better than in Lithuania. <...> In addition, in Lithuania, buses run from some villages to city centers three times a week”, A. Butkevičius mentioned at the BFK meeting.

For these reasons, according to the politician, it should not be necessary to reduce the number of branches of financial institutions in Lithuania.

He also shared his experience – a couple of years ago, when he wanted to visit a bank branch in Radvilišky, he found the door locked and a note left on it – to visit, you need to register by phone in advance.

“It was a miracle for me. And imagine that as my mother, an 88-year-old woman, should talk about computer literacy. It is hopeless.

There are a number of residents in our regions who still need contact services, and the profitability of commercial banks in Lithuania grew the fastest compared to other countries. Therefore, there are definitely reserves for maintaining smaller departments”, said A. Butkevičius.

Pauliaus Peleckis/BNS photo/Algirdas Butkevičius

E. Čipkutė mentioned that in case of an important matter, all credit institutions accept clients without registration, but in the regions the working hours of some departments are shorter, so sometimes you may find their doors locked.

“Some credit institutions reduce working hours in order to keep those departments in the regions.

And in the mentioned Radvilišky, there are currently a couple of branches of credit institutions, so if one closes, there will be another. Of course, it is not very popular in Lithuania to change credit institutions, but it can be an opportunity,” she said.

It encourages you to think again

Asta Kuniyoshi, Deputy Chairman of the Board of the Bank of Lithuania (LB), did not deny that the vast majority of customers want efficient payment services provided via the Internet.

However, the number of customers for whom it is important to receive services by contact has not decreased so much either. Therefore, he urged financial institutions to reassess whether it is really necessary to close the doors of branches in certain areas.

“We have received appeals from some municipalities expressing concern about this. Here, in the city of Radviliškis, a branch of one credit institution will be closed.

In such cases, we additionally appeal to the banks to reconsider the possibilities of leaving customer service departments, and in the absence of such possibilities, to explain in detail how services could be provided to residents.

Now it is possible to come to homes and municipalities, but there is a lack of greater communication about this,” A. Kuniyoshi pointed out.