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EU banks close branches, cut jobs as customers go online

[LONDON] European Union banks closed 9,100 branches and cut around 50,000 staff last year, according to data published on Tuesday, as customers increasingly opted for online banking.

The European Banking Federation, which gathered the information, said the number of bank branches in the EU had been reduced to 189,000 at the end of 2016, a 4.6 per cent fall on the previous year.

Staff numbers were their lowest since 1997, at around 2.8 million people, according to the analysis.

A total of 48,000 branches have been shut across the bloc since 2008 - a reduction of more than one fifth. But banks hastened closures last year compared with 2015, when 3 per cent of branches shut their doors.

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With many customers embracing electronic payments and digital and mobile banking and interest rates at rock bottom, banks have slashed their costly brick-and-mortar outlets to save costs.

Low interest rates depress what banks can charge for loans or earn on investments, eroding profits.

Some countries' banks have responded by closing branches, with British banks alone set to close a record 762 branches this year.

Alternatively banks elsewhere have introduced fees on previously free services, including basic bank accounts and withdrawals, to keep businesses afloat.

Banks also looked to consolidate or merge to increase profitability - a trend that began in 2009. There were 6,596 lenders across the bloc at the end of 2016, down 6 per cent on 2015.