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South Korean commercial banks are going ahead with downsizing measures, shuttering more than 40 offices and branches around the country next month alone despite repeated call for restraint from authorities.

According to sources from the banking industry on Thursday, Woori Bank will shut down 15 offices and five branches on Oct. 19. Shinhan Bank will close eight offices and two branches. Standard Chartered (SC) Bank Korea that integrated two offices into one on Sep. 18 will additionally shutter five offices on Oct. 19. KB Kookmin Bank will merge two offices in Yeouido in central Seoul on Oct. 23 and Hana Bank plans to close an office on Oct. 26.

Commercial lenders facing strong competition from online players and waning customer visits have been rationalizing brick-and-mortar outlets to cut costs.

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According to the Korea Federation of Banks, the number of bank branches shrank from 7,100 in late 2016 to 6,591 as of the end of June this year. Local lenders closed down 117 branches and offices during the first half of this year alone, prompting the Financial Supervisory Service (FSS) to call upon restraint in the downsizing movement. “

It is undesirable that banks reduce such a large number of branches in a short period of time,” FSS Chairman Yoon Suk-heon said in July as the elderly still prefer to directly handle bank affairs.

Online and mobile banking accounted for 59.3 percent of the entire financial transactions last year.

The proportion of in-person banking at offline banks dropped from 9.8 percent in 2018 to 7.4 percent in 2019. The automated teller machine (ATM) usage rate also declined from 30.2 percent to 26.4 percent over the period. The Covid-19 pandemic has accelerated thee surge in electronic banking.

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