SunTrust Banks, Inc. (STI - Free Report) plans to shutter nearly 40 of its branches in the first quarter of this year. The CEO of the company announced the plans to trim branch network on Mar 5 at a U.S. Financial Services Conference held by Citigroup Inc. (C - Free Report) .
As per a Securities and Exchange Commission filing on Mar 5, SunTrust expects to bring down the total number of branches to 1,580 by the end of the current month from 1,616 at the end of 2012.
Besides the closure of these branches in the first quarter, the company expects more closures in 2013. Most of the closures are anticipated to come from the company’s in-store network. It expects to cut down the overall number of grocery store partners, but retain strategic partnerships with key departmental stores including Wal-Mart Stores Inc. (WMT - Free Report) , Safeway Inc. and The Kroger Co.
The decision to shut down branches comes after a thorough evaluation of branch infrastructure following the migration of clients to self-service avenues like mobile banking and online banking, which reduced cost extensively.
In 2012, SunTrust closed 43 branches as a part of its cost cutting measures. Under these measures, the company also retrenched 2,400 employees and slashed the pay of the existing ones. Since 2010, the branch workforce has been reduced by nearly 10%.
SunTrust is not the only bank that has adopted branch closures and retrenchments to boost the top line. Both big and small financial institutions have been resorting to such strategy amid a bleak macro economic environment.
Currently, SunTrust retains Zacks Rank #3 (Hold).