Take it to the bank, if you can find one: Capital One pulling up stakes part of worldwide trend
The Shelter Island’s Capital One branch will close its doors in November, joining branches in Southold and Riverhead that are also closing.
In just a few short years, what started as a trickle of bank branch closings has turned into a river.
Capital One was among a handful of major banks that bucked the trend as late as 2014, actually adding more branches. But now it’s joined the brick-and-mortar vanishing act, as reflected by branch closings on the East End, including Shelter Island.
According to The Economist, since the financial crisis of 2008, banks have closed more than 10,000 branches.
The reason, of course, is money, and the increasing ability of customers to handle most banking on their smart phones or computers
In confirming the closing of the Capital One Shelter Island branch some time in November, bank officials at their Virginia headquarters said they would be making every effort to provide customers with alternative ways of handling banking needs, but would refer those who wanted in-person service to branches still open in the region.
The trend in bank closings gained traction in 2008 with the financial meltdown. According to CNBC, there had already been closings due to a surge in bank mergers and acquisitions, which first affected regional banks, and then began spreading to larger banking institutions.
For example, Capital One had taken over North Fork Bancorp in 2008.
The trend in the United States was actually behind the curve for bank branch closings in other parts of the world until 2008, according to Jim Marous, co-publisher of The Financial Brand.
“In an era of sluggish revenue growth and heavy compliance costs, most bankers are trying to close or re-configure under-performing branches as quickly as possible,” Mr. Marous reported.
There would be even more branch closings were it not for regulatory and financial considerations and public relations repercussions, he wrote.
Some under-performing branches remain open because they are tied to long-term leases. Others hanging on are trying to amortize their investments in buying or building structures for their branches.
The average cost of closing a branch can be as high as $500,000, Mr. Marous said.
“The banking industry does not need the amount of space it currently has anymore,” according to Dave Martin, executive vice president and chief development officer of Financial Supermarkets, Inc.
