Closure of bank branches is a ‘catastrophe’ for rural areas

More and more rural bank branches are closing – although at a slower rate in France than in neighbouring countries.

The trend has been blamed on the rise of online banking, making in-person branches less profitable.

Local mayors say rural areas are being “forgotten”, as the closures have left hundreds of villages without even a cash machine for residents.

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Rural branches often have fewer employees, making them easier to close down.

This has been happening despite 80% of people in France preferring a bank that allows them to use both online and in-branch services, depending on needs, according to a study published by the Fédération bancaire française and polling company Ifop.

It also found, however, that 94% of account holders used a website or banking app to manage their account.

Out of 35,000 communes in France, 654 were left without a branch between 2010 and 2020, data from Infostat Marketing shows.

In that decade, no department experienced an increase in the number of branches. In total, 3,500 branches closed down in that period.

'A disgrace'

The phenomenon has been termed a désertification bancaire – creating a banking desert.

“It is a disgrace,” Jean-Paul Vasseur, mayor of Tournehem-sur-la-Hem (Pas-de-Calais), told The Connexion.

Crédit Agricole and La Banque Postale recently closed their branches in his village, leaving no banking options for residents.

“There are a lot of older residents here who cannot easily go to neighbouring towns.

“You also cannot expect them to learn the technology necessary for online banking.

“Of course, banks’ profit margins are very high and they have the budget to spend millions on advertising on TV, but they still have to shut rural branches.

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“Rurality is dying, we have no more banks, no more doctors. We are completely forgotten and abandoned.

“It is a catastrophe,” he said.

Lack of cash machines

As well as having no in-person branches, it means a lot of towns and villages no longer have cash machines.

This can pose a problem, as some businesses have not yet transitioned to card payments and have no way of depositing cash or having change for customers.

Some communes, such as Bessières (Haute-Garonne), have taken matters into their own hands by renting an ATM.

The trend for branch closures is not restricted to France and, compared to other countries in Europe, it is among those resisting it best.

French resistance

Last year, there were 49 branches for every 100,000 residents in France, according to the banking federation.

This is compared to 37 in Spain, 23 in Germany, and four in the Netherlands.

The rate at which branches are closed is also set to be slower in France in the coming years than in these neighbouring countries.

The federation’s managing director Maya Atig said: “There are almost 36,000 bank branches throughout France – as many as there are communes.

“So we’re a long way from seeing the disappearance of bank branches.”

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However, it is no comfort to the hundreds of communes with no physical branches, such as Andlau (Alsace), a town of around 1,500 residents.

A resident told France 3: “I think that people living in rural areas are barely considered.

“We now have to travel a long way. It’s difficult for the elderly”.

Crédit Agricole, one of France’s biggest banks, is closing 26 branches in rural areas in Occitanie this year, with plans for more to follow afterwards.

Caisse d’Epargne had announced it was going to test a new model that would see independent entrepreneurs running local branches, rather than the bank, but it has since abandoned the project.