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JPMorgan to Shut Branches on Virus Concern: Others to Follow?

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With the coronavirus spreading to all the 50 states and Washington DC in the United States, companies are taking measures to safeguard employees, while trying not to compromise on the services provided to their clients at the same time. Likewise, banks are taking several measures, including work from home, to continue offering normal banking services to their customers.

JPMorgan (JPM - Free Report) is planning to close 20% of its branches temporarily as a precautionary measure to combat coronavirus-related health crisis. Also, the bank has made extensive plans for non-customer-facing staff to work from home.

Beginning today, JPMorgan’s remaining approximately 4,000 branches will be open but with reduced working hours. Also, these branches will operate with drive-thru services and/or have teller partition glass. Further, financial advisers, small-business bankers and home-lending advisers will start working from home.

Thasunda Duckett, CEO of Consumer Banking business, stated that the bank is balancing “the fact that we are essential to the communities we serve” with the need to protect employees as well.

Will Others Follow the Suit?

At present, none of the Wall Street biggies has come up with similar plans of closing branches temporarily.

Bank of America (BAC - Free Report) spokesman in a statement noted that there is no change in its branch operations currently. Similarly, Wells Fargo (WFC - Free Report) spokesperson, Beth Richek, stated that the majority of bank branches will remain open across the country. The same is the case for Citigroup (C - Free Report) .

Further, major regional banks like Truist Financial, Fifth Third Bancorp and Citizens Financial Group (CFG - Free Report) have kept their branches open.

Nonetheless, several small and mid-sized banks have taken measures like operating only via the drive-thru model. In case, the drive-thru facility is not available, banks are implementing appointment-only services. Some of these banks include Keycorp (KEY - Free Report) , Capital One, Huntington Bancshares (HBAN - Free Report) , South State Corporation and Pinnacle Financial Partners, Inc.

Our Viewpoint

With the banks taking a proactive approach toward coronavirus pandemic, closure or partial branch operations are not likely to have much adverse impact on their financials.

However, the pandemic has led to several near-term concerns, including slowing down of the U.S. economy, fewer business activities and supply-chain disruptions. These drove the Federal Reserve to cut interest rates to near zero. This is likely to have a severe, adverse impact on banks’ earnings over the next few quarters.

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