The number of offices of Russian banks exceeded 24 thousand

Russian banks registered a record number of offices in November, according to Central Bank data. The total number of offices has already exceeded 24.2 thousand, the maximum since February 2022. According to Kommersant’s interlocutors, offline infrastructure is again gaining relevance for banks against the backdrop of problems with access to mobile applications that have arisen since 2022.

The number of offices of Russian banks in November 2023 increased by a record 318 units, exceeding the mark of 24.2 thousand units. The total number of offices was the highest since February 2022. This is evidenced by Bank of Russia data published on December 19. We are talking about additional offices of banks without taking into account branches, representative offices and mobile cash transactions points, which are presented on a significantly smaller scale. The current growth of branches in the banking system as a whole occurred against the backdrop of a continuing reduction in the number of Sberbank offices – by 51 units, to 11.7 thousand units.

It is significant that last month the growth of banking networks was mainly not due to new regions. Thus, in total, in the DPR, LPR, as well as the Kherson and Zaporozhye regions, the increase in offices was only 16 units. More significant growth was observed in all federal districts, with the largest number of new offices being opened in the Siberian (82), Volga (55), and Far Eastern (49) federal districts. At the same time, a significant expansion of the network concerned a small number of banks. According to statistics on the Central Bank website, in November new offices were mainly opened by Sovcombank, Alfa-Bank and PSB. Offices were also actively opening in the first half of December, in particular at Alfa Bank. Previously, a number of large banks announced further plans to increase the number of offices (see Kommersant on December 7).

Currently, despite the fact that opening offices is accompanied by significant costs for rent and personnel, they are an important channel of interaction with retail clients, Kommersant’s interlocutors say. Sberbank, for example, previously told Kommersant that a developed network of branches is one of the bank’s most important competitive advantages in the market. “We will continue to work on improving it, taking into account the demand from clients to receive services in a face-to-face format,” the bank noted.

As Roman Koenigsberg, head of the internal audit and risk management department of the FBK audit and consulting group, explains, the increase in the number of bank offices is the opposite trend of digitalization. For example, before problems with online banking applications began in 2022, credit institutions tried to transfer all processes and services to remote servicing as much as possible. This process began about ten years ago. “Now the trend is reversed. Banks no longer rely on mobile applications because of the difficulties in using them,” the expert notes. Against the backdrop of periodic problems with access to online services, physical infrastructure is an important element for ensuring the uninterrupted operation of banks, Mr. Koenigsberg is convinced.

Since the spring of 2022, the American companies Apple and Google began to remove mobile applications of Russian banks that were included in the sanctions lists from online stores (see “Kommersant” dated May 31, 2022). Despite such actions, banks are finding different ways to return to these sites. Periodically, their applications are deleted again, but the process begins again. In addition, great efforts are being made to improve online banking.

In addition, the previous trend towards a reduction in the number of offices was largely the result of reorganizations, license revocations and mergers and acquisitions in the banking sector. Now these processes have stopped, says Roman Koenigsberg, which also affects the current situation with the number of structural divisions.

Olga Sherunkova