Online banking and apps, despite ominous predictions to the contrary, have not killed off your local bank branch.

In fact, the largest U.S. bank, JPMorgan Chase (JPM), emphasized today that expanding its retail branches is a key business priority.

Key Takeaways

  • JPMorgan Chase is making it a priority to expand its retail branches.
  • The bank said 900,000 people visit a Chase branch in the lower 48 states every day.
  • The company has goals of eventually having 70% of the U.S. population within a 10-minute drive to the branch.

Why the focus on physical bank buildings? Easy. Widespread mobile commerce notwithstanding, about 75% of the bank's deposits sit in accounts of customers who still regularly visit a live, in-person Chase location.

At the company's annual investor day, Jennifer Piepszak, the company's co-CEO of consumer & community banking, said "900,000 different people walk into a JPMorgan branch in the lower 48 states every day."

Piepszak and her team hope to increase that number. In 2017, 50% of the U.S. population lived within a 10-minute drive of a JPMorgan Chase branch. That figure has increased to 60%, and the bank's now targeting 70%.

The financial behemoth in 2019 accounted for one of every $11 deposited in U.S. banks. That proportion has risen to one in nine, with deposits per branch rising at a 13.8% annual rate in the last five years to an average of $227 million.

However, this growth occurred even as the firm reduced its number of branches by 462. But it still operates 4,831 physical banks, and it has reduced its retail locations at a 62% lower annual rate than its competitors since 2017. To compare, Bank of America (BAC), at the end of Dec. 2022, operated 3,900 bank branches.

At the same time, 15% of JPMorgan Chase's current branches have opened in the past five years— five times more than its biggest rivals' new locations.

But even with its expansion, it has plenty of room to grow. JPMorgan still has less than a 5% share of deposits in 19 of the top 50 and three of the top 10 U.S. markets, including Washington D.C., Boston and Philadelphia.

The firm says, on average, its new branches break even in about four years after opening. Branches built in the past decade have added $85 billion in deposits since 2017, accounting for 8.5% of its total deposit growth.

JPMorgan inherited more branches with its recent acquisition of troubled First Republic Bank.

The firm said it may close a small amount of First Republic's 84 branches in close proximity to existing JPMorgan retail locations. The remainder will remain under First Republic's banner until back office integration of the two banks concludes.

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