Number of Bank Branches per 100,000 People at 14.4... Lower than OECD Average

[Asia Economy Reporter Song Hwajeong] The number of bank branches in South Korea was found to be lower than the average of OECD member countries.

According to the Financial Services Commission on the 19th, as of 2020 based on data compiled by the International Monetary Fund (IMF), the number of branches per 100,000 people in South Korea was 14.4, falling short of the OECD member country average of 18.3.

Compared to major countries, it was similar to the UK (14.5) and Sweden (13.8), but significantly lower than the United States (29.7) and Japan (33.9), where many small banks handle regional finance. However, when including non-bank deposit-taking institutions such as post offices and mutual finance, the number of branches was 36.4, higher than the US (33) and Japan (35).

The number of bank branches per 1㎢ was 0.07, higher than the US (0.008) but lower than Japan (0.1).

The number of domestic bank branches increased until 2012 but has been continuously decreasing since 2013. In particular, the decline, which had somewhat eased after 2018, accelerated after 2020 due to the spread of COVID-19 and the expansion of non-face-to-face transactions.

The reduction in branches is most pronounced among commercial banks with many branches, and the proportion of commercial bank branches among all bank branches has been decreasing every year. The share of commercial bank branches was close to 60% in 2015 but dropped to the mid-50% range in 2020 and further declined to 54% last year. Recently, branch reductions among regional and specialized banks have also increased significantly, indicating a trend of branch reduction expanding across the entire banking sector.

Regionally, the decrease was most significant in metropolitan areas (the Seoul Capital Area and metropolitan cities) where commercial bank branches are concentrated. This is interpreted as banks reducing overlapping branches mainly within the Seoul Capital Area.

This content was produced with the assistance of AI translation services.