TSB closes a third of its branches

The branches to be closed are in Opunake, Eltham, Newmarket and NorthWest in Auckland, Napier, Nelson and Palmerston North.

The closures will leave TSB with a single South Island branch in Christchurch.

“Like all banks, we're seeing more customers choose a bank online rather than in person and, with that, their expectations of digital products and services are quickly evolving,” says acting chief executive Gordon Davidson in a statement.

“The changes we're making to how we operate, which include some changes to our branch network, will enable us to put further investment and focus into developing smarter products to better meet our customers' needs,” Davidson says.

Former chief executive Donna Cooper, who left TSB at the end of last month, had floated the idea of branch closures back in June, citing a rapid decline in branch usage and saying the bank had begun consulting with staff.

Davidson says TSB is working with the people affect to find new opportunities within the bank wherever possible.

“We recognise that any change can be difficult. These decisions have not been made lightly and we're working hard to ensure our people and customers are proactively informed and supported,” he says.

“We have been encouraged by our people's understanding of the need for change as we digitally transform our business to continue delivering easily accessible, intuitive products and services for our customers and achieve our goal to be the easiest bank to deal with.”

Massey University banking professor David Tripe says the closures are understandable and that another bank had told him it has a branch that gets visits from just 39 customers a week, making it uneconomic.

But TSB also has a “significant issue with costs,” with blowouts in regulatory, staffing and IT costs, Tripe says.

TSB's annual report showed operating expenses in the year ended March jumped 39% to $189.3 million with staff costs up 31.7% to $75.4 million, IT costs up 27.7% to $33.3 million and professional and legal fees more than doubling to $15.7 million.