A bank closing branches usually means a smaller bank. Absa's South African network finished the year with more places to walk into than it started with. It shut 79 traditional branches in the twelve months to June, taking the count from 438 to 359, and pulled out 120 cash machines and devices.
The replacements do everything except cash. Absa lifted its smaller sales and service outlets from 122 to 215 over the same year, and the two counts together, what the bank calls customer points of presence, went from 560 to 574. Those outlets do advice, sales, service and assisted digital banking, alongside self-service machines. What they will not do is take a deposit over the counter or hand you notes.
Cash is the expensive part
The whole move comes down to what it costs to keep money on the premises. Chief executive Kenny Fihla, speaking after the interim results, said cash-dispensing branches are substantially more costly to run than the cashless kind. "We are changing the nature of our branches, moving away from cash branches into more sales consulting-driven kinds of branches," he told the results briefing. "That alone significantly reduces the costs of managing that branch relative to having cash." Absa wants 456 of the cashless format over time. Fihla said the shift should not bring massive retrenchments and should instead give the bank room to carry more volume.
Six years of machines coming out
The cash machines have been going for longer than the branches. Absa's South African estate has fallen 41% in six years, from 8,435 machines to 4,976. Much of that was one event: a third-party ATM operator walked away in late 2022 and took roughly a fifth of the fleet with it.
The revenue has followed the traffic. Absa reported digital revenue up 21% and digital payment revenue up 18% for the half, and said branch and ATM revenues fell as customers migrated across.
Absa is not alone in the shape of it. Standard Bank says 353 of its branches now offer cash only through machines, including mobile branches, and FNB counts 203 tellerless branches and one cashless one within a network of 644. Absa is also working with the Reserve Bank on modernising cash distribution in South Africa, nameless ATMs included.
