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Instituto Valenciano de Investigaciones Económicas

News

Population with no access to a local bank branch in their town or village has increased 34% since 2008

16% of residents in Castile and Leon have to travel to visit a bank branch

The restructuring of the Spanish banking sector continues to reduce the network of bank branches across the country. In 2017, there were 27,320 branches in Spain, 40% less than in 2008.

By provinces, Barcelona has experienced the largest cuts with a loss of more than half its bank branches (-54%), falling from 5,819 branches in 2008 to 2,676 in 2017. Other provinces that have been particularly affected by these closures are –also in Catalonia– Girona and Tarragona, both with 49% fewer branches than in 2008; the three provinces of the Valencian Community: Castellón (-52%), Valencia (-46%) and Alicante (-45%); Zaragoza (-47%), and Ourense (46%). In contrast, Cuenca (-17%), Ciudad Real (-19%), Teruel (-21%) and Badajoz (-21%) are the least affected provinces.

The impact of these closures has been most noticeable in small towns where all branches have disappeared. According to an analysis by Joaquín Maudos, Deputy Director of the Ivie and Professor at the University of Valencia, in 2016 (latest available data) 4,114 municipalities had no bank branch, 50.7% of all towns and villages in Spain. This financial exclusion affected 1,256,590 residents of those localities, and reflects an increase of 34.2% on figures for 2008. Together, they represent 2.7% of the Spanish population compared to 2% in 2008.

Castile and Leon is the region most severely affected by financial exclusion, where 16% of its population (392,003 people) has no access to a bank branch in their municipality. This exclusion is even greater in the region’s provinces of Zamora, Segovia and Ávila, where over a fifth of the population have to travel outside their town or village to visit a bank branch. In these three provinces, 29%, 37%, and 40%, respectively, of bank branches were closed between 2008 and 2017.

At the opposite end are the regions of Murcia and the Balearic Islands, where practically all citizens have access to a bank branch in their place of residence. In fact, only one municipality in these two regions has no bank, savings bank, or credit cooperative branch.

More than half the Spanish municipalities have no bank branch, and in a further 15.8% only one depository institution provides its services through a branch office. This is the case of 1,281 towns with a total population of 1.4 million inhabitants, representing 3.1% of the population. Savings banks or banks created from former savings banks are most likely to save residents from falling into a situation of financial exclusion since they provide a service in 67% of these municipalities, while credit cooperatives are present in a further 21% of these towns and villages. Banks are only found in 12% of the municipalities where just one financial institution is present.

In a context in which the closure of bank branches has been necessary to safeguard the viability of the banking sector, a trend that is forecast to continue in the coming years, both financial institutions and public administrations must introduce measures to prevent financial exclusion. The best way forward for financial institutions to meet this objective is by advancing online banking services, whereas public administrations should work towards guaranteeing internet access for the whole of Spain’s territory. Sectors of the population most affected by the closure of branches are older people and those less familiar with the world of finance.

18 April 2018