Trimming The Branches

As I've said before, the most visible result of the bank balilout so strongly favoring the Too Big To Fail banks is the forced consolidation of the industry. Smaller regional and local banks will be eaten, reducing competition and the need to have so many branches. If you're the only game in town, after all, and you're a megabank like BoA...make the people come to you.

Bank of America Corp said on Tuesday it plans to "modestly" reduce the size of its U.S. branch network over the next three to five years, but does not have plans to eliminate 10 percent of its branches.

The largest U.S. bank by assets ended June with 6,109 branches, second nationally to Wells Fargo & Co.

Earlier Tuesday, The Wall Street Journal, citing people familiar with the matter, said Chief Executive Kenneth Lewis told investors at a meeting last Thursday that he plans to shrink the branch network by about 10 percent.

A bank spokesman, James Mahoney, said: "We do not have a plan to reduce branches by 10 percent," though the network "will come down modestly" in size over three to five years, even as the bank builds new branches.

Why pay for additional branches when you don't need them? Buy out your competitors, then shut them down. Go to more internet banking. Charge more fees, get rid of tellers and branches. What are people going to do, go to another bank with even fewer branches?

Makes perfect sense to me.