In the month of November alone The WinePress has highlighted that CEO’s and investors in some of the American megabanks are offloading millions of their own stock, if not all of it, at the same time the credit ratings firm Moody’s downgraded the credit ratings of JP Morgan-Chase, Wells Fargo, and Bank Of America.
Following this news, Bank of America revealed on Monday they would be shuttering 138 locations throughout the U.S., after already closing dozens of them this year already, and more going into 2024.
Diario AS reported: ‘Bank of America is the second largest bank in the United States, and this year, the financial giant has announced that it will close up to 138 locations. To date, 95 branches have been closed this year, and 15 more are to shutter by the end of the year. The remaining locations are planned to close in 2024, meaning that the trend, common among nearly all of the big banks of shutting local branches will continue.’
The full list of closures can be read here.
Furthermore, as noted by The Epoch Times, a number of other banks have filed to close some of their branches just this past week alone.
PNC Bank filed for 19 branch closures.
JP Morgan-Chase is planning to close 18.
Citizens Bank is will be shuttering 6.
Citibank is closing down 2 of theirs.
Including 5 bank closures from Bank of America (included in the total number above), in this past week along 64 branches will soon be closed across the U.S.
As noted in a briefing courtesy of Kiplinger, these bank closures are part of a growing trend of banks shutting down in relatively silent, rapid succession, though the ripple effect is starting to get noticed. Citing newly published data from 2022, roughly 3,000 bank locations closed, but less than 1,000 were opened. Kiplinger wrote:
U.S. Banks continue to shut down branches, in numbers not seen since the initial wave of bank closures in 2008, while allocating funds for new online technology.
Banks are closing branches faster than they’re opening new ones. U.S. banks closed over 3,000 branches last year while opening just 1,000. JPMorgan Chase led in branch closures last year, shuttering 144 branches, while opening 133. The trend will likely continue as banks face staunch competition for deposits and younger customers from online banks, fintech firms and Big Tech.
Note that the number of bank closures varies widely by area. Between 2017 and 2021, more than 7,000 branches were closed in the U.S., which represents 9% of all locations. One-third of these closures have been in areas with large minority populations.
The initial wave of closures was sparked by mergers and acquisitions in the wake of the 2008 financial crisis. More recently, changing consumer preferences and improved banking tech are the reasons given for ditching brick-and-mortar locations. It shows that big-bank investment in tech is paying off, as new apps and websites with an expanding array of services have lured more customers.
The full spreadsheet of bank closures are reported to the Office of the Controller of the Currency, and can be read here.
Other banks are trimming off some fat from their institutions. The Bank of New Hampshire has recently announced new staff layoffs, and will no longer be accepting new mortgages; something the Economic Lady says will probably be a growing trend going into next year.
It is worth noting that many medium, small, and local banks are mostly the largest holders of commercial real estate.
The banking problems are not just limited to the United States either. In the United Kingdom, Metro Bank has basically collapsed, as reported by economic forecaster Neil McCoy-Ward, reporting how that bank’s stock has taken a 98% drop over the last several years but has yet to recover, as investors at that bank have gotten wiped of their investments.
AUTHOR COMMENTARY
Go back to January, 2021, and I had reported on this mass bank closure trend then. It has not stopped and only continues to worsen; and at the time I wrote, “If you have your money in a bank, PULL IT OUT.”
That’s the same advice I’m going to give now, and have been saying since the get-go. Don’t keep your money in the banks, save for just enough to keep the necessary accounts open, to pay bills, and if you run a business. Otherwise, keep most of it stuffed away under your mattress. And, please, for crying out loud, do not keep hard assets and precious metals there: that’s really foolish.
I’ve been saying it for a some time now, as regulars of The WP know, that the banks are going to burst. They are insolvent and are heading onto tons of toxic loans and bad debt, and these smaller banks especially have extensive investments in commercial real estate. This will come home to roost in 2024 and 2025. When the banks go, then the whole system was basically collapse under its weight.
This is what happens when you play funny money and build wealth with a credit card, literally and figuratively.
[26] And every one that heareth these sayings of mine, and doeth them not, shall be likened unto a foolish man, which built his house upon the sand: [27] And the rain descended, and the floods came, and the winds blew, and beat upon that house; and it fell: and great was the fall of it. Matthew 7:26-27
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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