Boston, MA 12/11/2013 (wallstreetpr) – Regions Financial Corporation (NYSE:RF) is a Fortune 500 company and the only one in Birmingham. Under chief executive Grayson Hall, the company has turned around impressively and the future is even promising. Its profits are up and expenses and down at the same. It is expanding revenue sources and consolidating operations to ensure that every dollar is saved. This is good for shareholders.
The company is currently in the phase of consolidation. This is meant to cut operating costs and simplify services for users. Consolidation is the game of banking industry today. Even bigger banks like JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corp (NYSE:BAC) are pruning their branches and lowering staff count.
In the latest phase of consolidation, RF is closing about 30 bank branches next year and will be completed in March. The announced closures will be done in all its operation regions which span 16 states. Following the closure of the 30 branches, the company will be left with 1,674 branches.
Over the past five years, the bank has closed 16 percent of its branches. This is according to the head of business group for RF, John Owen.
Impact of the closure
The bank expects that the closure of the branches will have impact on its profits going forward. It expects the impact to be reflected in its fourth quarter.
Pruning of branches also essentially helps banks to curb expenses as they take operations digital. The environment is also making it a necessity to close the brick and mortar branches. This is because Internet and mobile banking are going currency and it makes a lot of business sense to meet the customers there.
The environment of low interest rates and tepid loan condition are also factors which force banks such as Regions Financial Corporation (NYSE:RF) to embrace other banking options in efforts to lower operating costs.