Academic journal article ABA Banking Journal

Branch Sales Sag to Ten-Year Low

Academic journal article ABA Banking Journal

Branch Sales Sag to Ten-Year Low

Article excerpt

The annualized number of branches sold by banks and thrifts in 2008 has fallen to the lowest level in at least ten years, according to SNL Financial data.

Premiums paid for deposits, though, have held relatively steady, indicating that there is still an appetite for brick-and-mortar among depository institutions.

The banks that have divested the most branches this year are companies that have been stung by the economic downturn. Royal Bank of Scotland sold 18 branches in upstate New York to Community Bank System Inc. at a 12% premium to deposits. RBS recorded almost $6 billion in writedowns during the first half of 2008.

Another bank bitten by writedowns, Citigroup sold off eight branches in Amarillo, Texas, to Happy State Bank. The premium in this deal was not disclosed.

Overall, though, the number of branches sold in 2008 totaled just 74 as of Aug. 27. compared to 184 sold in 2007 and 240 sold in 2006. If the pace of branch deals remains the same throughout 2008, it will be the lowest number of branches sold per year in SNL's database, which goes back to 1997. …

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