More branch closures for PNC Financial Services Group
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PNC Financial Services Group will step up branch closings this year to cut costs and focus on better serving customers in a digital world who increasingly are banking online and via smartphones, president and incoming CEO William Demchak said Tuesday.
PNC closed 65 branches last year across 19 states and Washington, D.C., and plans to shutter about 200 more this year, or about 7 percent of its current network of about 2,900 branches, Mr. Demchak told analysts at a Citigroup financial services conference in Boston.
PNC also will open some branches this year "where it makes sense," such as in underserved markets, said Mr. Demchak, who officially takes over as chief executive of the Pittsburgh region's biggest bank in April.
Spokeswoman Amy Vargo declined to disclose how many branches in the Pittsburgh area were targeted for closure.
At the same time, Mr. Demchak said, branches will remain an important touchstone for attracting new customers.
He noted that customers who use PNC's "virtual wallet" online and mobile banking product typically still visit a branch to open the accounts.
"They might not ever go into a branch again, but they want ... to see someone to know who the person is who has their money," Mr. Demchak said. "We need to be cognizant of that."
Besides investing less in physical branches, which account for about one-third of PNC's overall costs, the bank will deploy smaller branches, such as "cashless" offices where machines instead of tellers will handle cash transactions, Mr. Demchak said.
He said PNC needs to serve traditional customers as well as more technology-minded customers -- such as his son who has "every mobile app there is" and is "horrified by going into a branch" -- without alienating either group.
The bank also will explore charging a fee for certain services that currently are free, such as making deposits with a mobile phone.
"How many of you, if I charged you some money for that -- a quarter -- would still do it rather than go stand in a teller line?" Mr. Demchak asked.
"We are providing a value-added service to the consumer" and banks need to get paid for that, he said.
First Published March 6, 2013 12:31 am