Fifth Third Bank closed 36 branches nationwide last month — including seven in the Chicago area — reducing expenses and its brick-and-mortar footprint as consumers shift to online banking.
The shuttered branches include three in Chicago — in the Logan Square, Calumet Park and Wrightwood neighborhoods — as well as suburban locations in Fox Lake, Hoffman Estates, Prairie Stone and Winfield.
"To some degree, the customers are sort of voting with their feet," said Larry Magnesen, a spokesman for Fifth Third. "The places where you see the most significant falloffs in transactions, where you’ve got other branches nearby, are typically the ones that are going to see a change like that."
Fifth Third has 156 Chicago area offices as of Wednesday, Magnesen said.
The Cincinnati-based bank entered the market with the 2000 acquisition of Old Kent Financial, giving it a base of about 70 branches in the Chicago area. That total peaked at 181 branches in 2011, according to FDIC reports, and has been declining every year since.
Nationwide, Fifth Third has 1,155 branches in 10 states, Magnesen said. The bank began a previous wave of about 100 closures in the fall of 2015.
"Our branches are still important as critical places to consult with customers — open accounts, make changes to accounts," Magnesen said. "People come in to apply for loans — they want to see somebody face to face. But the big driver is the change in deposit transactions."
More than 60 percent of Fifth Third transactions are now digital, reducing customer traffic to bank branches, Magnesen said.
The challenging economic environment for banks and the cost of maintaining underperforming locations are also factors in the decision to close branches, Magnesen said.
"All banks tend to make less money Ngsbahis in a lower rate environment," he said. "People are certainly looking at efficiency and this certainly does increase our efficiency, because brick-and-mortar branches are expensive."
Magnesen said all of the closures take into account the proximity of alternative Fifth Third locations, and the availability of its fee-free ATMs. With online banking continuing to grow, brick-and-mortar locations likely will face ongoing reductions, he said.
"It will be looked at on an ongoing basis," Magnesen said. "We will continue to tweak the distribution system."
rchannick@chicagotribune.com
Twitter @RobertChannick
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