The news: The bank’s Q1 2021 earnings report reveals that its total branch count fell to just 4,944, a quarter-over-quarter (QoQ) drop of 3% from Q4 2020, when it totaled 5,032. Mobile user growth had a virtually mirror image, with active users reaching 26.7 million, up 3% from Q4, when it stood at 26.0 million.
More on this: Wells Fargo unveiled its channel trends as it posted a Q1 profit of $4.74 billion, up 58% QoQ from $2.99 billion.
The bank’s bottom line was helped by the release of approximately $1.05 billion in provisions for credit losses. The release reversed aggressive action that it took last year to brace for the economic downturn wrought by the coronavirus pandemic.
The big takeaway: Gradually cutting branches can help Wells Fargo simplify its operations while limiting risk from competitors gaining an edge on it in physical channels.
Besides helping Wells Fargo streamline in an effort to shuck its federally mandated asset cap, these channel shifts are in line with industry trends: US banks slashed their branch footprints by a combined 95,000 to just 83,000 from 2010 to 2019, a drop of 12%, FDIC data shows. Branches are forecasted to continue their decline over the coming years, per Insider Intelligence, with the rate of adults who visit at least once annually dropping from a 2019 rate of 70.1% to just 62.3% in 2024. That means Wells Fargo likely won’t attract too much negative attention for trimming its own footprint.