JPMorgan opening more branches as COVID-19 prompts other banks to pull back

November 9, 2020.
In this Aug. 16, 2019, file photo, the logo for JPMorgan Chase & Co. appears above a trading post on the floor of the New York Stock Exchange in New York. (AP Photo/Richard Drew, File)

In this Aug. 16, 2019, file photo, the logo for JPMorgan Chase & Co. appears above a trading post on the floor of the New York Stock Exchange in New York. (AP Photo/Richard Drew, File)

has opened north of 120 branches this year and will continue to plow ahead with expansion, an executive said, while many smaller rivals opt to shutter brick-and-mortar locations amid a pandemic-accelerated shift to digital banking.

Speaking Monday during a virtual conference, Marianne Lake, CEO of consumer lending for the New York-based bank, said JPMorgan remains bullish on in-person banking for the foreseeable future.

“We’re going to continue to open them through the end of the year,” Lake said during the BofA Securities Future of Financials 2020 Virtual Conference, referring to branches. “People are increasingly wanting to come in for advice, and I don’t see that changing over the long term.”

More than 90% of JPMorgan Chase’s approximately 5,200 bank branches are now open, after the bank temporarily closed about 20% of them in March to prevent the spread of the coronavirus,  Lake said. 

After receiving approval from the U.S. Comptroller of the Currency to operate in 10 new markets, the country’s largest bank by assets is setting sights on further growth nationwide. JPMorgan will be allowed to operate in all of the Lower 48 states by the middle of next year. 

One hundred branches will come to low- to moderate-income communities nationwide, JPMorgan has said. Last month, the bank revealed a $30 billion commitment to address the country’s racial wealth gap, including the opening of low-cost accounts for 1 million people by establishing branches in underserved areas and hiring 150 community managers. 

Lake called branches “the heart” of that five-year plan, which also entails an investment of up to $50 million in Community Development Financial Institutions and Minority Depository Institutions, similar to a pandemic-inspired Bank of America effort.

Still, JPMorgan has seen “a dramatic acceleration” in digital adoption during the pandemic, not just in areas like account-opening and deposits but also lending, requiring the bank to build up its capabilities in those areas.

“This pandemic obviously was a factor, and the job for us now is to make them so compelling and easy and seamless that people choose them first,” Lake said. “We’re going to work hard on making some of the digital adoption that we saw stick.”

Observing the same trend, some of JPMorgan’s U.S. peers have moved to reduce their in-person operations.

In October, U.S. Bancorp revealed plans to close another 15% of its branches by early next year, saving $150 million in costs and adding to an existing initiative to shutter 10% to 15% of its branches by that time. Executives said that while a physical presence is eternally important, the bank needs fewer outposts now.

A month before that, PNC Bank disclosed that it would shut down 280 branches by the end of 2021, noting that digital sales had picked up quickly enough to offset hypothetical sales at the closing branches.

Others such as Wells Fargo, Northwest Bank and Capital One have also shuttered branches during the pandemic, speaking to a prediction by some that closures nationwide would speed up as consumers stayed home.

“We still firmly believe in an omni-channel distribution strategy, which incorporates having the best branches in the best locations, more points of convenience, but also best-in-class digital channels, and that hasn’t changed,” Lake said. “We’re obviously paying attention to evolving customer trends, and we’ll feed those back into our plans.”