After a year spent tightening its belt,
While the renovations will occur across Pittsburgh-based PNC's footprint in 28 states and the District of Columbia, new branch construction will be concentrated in Texas and two other states. The $562 billion-asset PNC expects to build in Austin, Dallas, Houston and San Antonio in Texas. The company is also targeting Denver and Miami as part of its expansion blueprint.
The program's total cost will be about $1 billion, with the new branches going up between now and 2028, PNC said. It currently operates approximately 2,300 branches.
"While $1 billion is a big headline number, we wouldn't get caught up there," Scott Siefers, who covers PNC for Piper Sander, wrote Wednesday in a research note. "The message is the more important factor: heavy focus on the Southwest and growth areas. … PNC could not be clearer on its coast-to-coast presence and aspirations."
Banks strive continuously to optimize their delivery networks, to be sure. But for the past 15 years, t
PNC focused on cost control throughout 2023, closing some branches and
However, there are signs the pace of the net branch decline may be slowing, and that some institutions are interested in widening and deepening their branch networks. PNC's news comes just eight days after
David Schiff, a senior partner and head of retail banking at West Monroe, a Chicago-based consulting and digital services firm, said Wednesday in an interview that the announcements by companies like JPMorgan, PNC and Wells Fargo — which recently announced plans to spend $175 million opening at least 23 branches in the Chicago-area — are part of trend that is seeing banks move some of the traffic they shifted to online and digital back into human channels, "whether that is contact centers or whether that's face-to-face in a branch."
The trend "is much less centered around transactional activities … and much more focused on sales and complex servicing transactions and interactions," Schiff added. "Much more engagement, particularly around wealth management, around mortgages and around small business and commercial. You're going from taking things from the branch into the digital. Now you're going full circle and taking some of those digital capabilities … and bringing that back into the branch."
JPMorgan indicated it will enter several low-income, moderate-income and rural markets, where accessing traditional banking services has been a challenge. The country's largest bank will also expand in a number of higher-growth centers, including Boston, Minneapolis, Philadelphia, Washington and Charlotte, North Carolina.
"When you look at it, both the organizations that have made announcements this week are not talking about national, 'we're going to scatter branches everywhere'" expansions, Schiff said. "They talk very specifically about markets. When you look at those markets, [most] are high-growth markets where they have lower concentrations and smaller footprints, but there is substantial commercial opportunity, not just consumer."
The new branches, Schiff added, will also serve as sources of market intelligence that can inform decisions about commercial real estate, an area of increasing concern for many banks. "You can't just apply a blanket lens and say, 'Here's what commercial real estate is going to be like.' It's really market by market, property by property," Schiff said. "Some of what the banks are doing is trying to get greater presence. They're realizing there are things, like commercial real estate, that analytics alone do not provide a perspective sufficient to understand risk."
For PNC, the planned new branches represent a critically important part of its growth strategy. The renovations also play a key role, helping signal continued commitment to existing customers, Head of Branch Banking Jeff Martinez said in a press release Wednesday.
"We wanted to give a very clear shout out … for those that have been banking with us for 10, 20, 50 years in that branch that's been around for 100 years, they're going feel it, too, in terms of technology and privacy and furniture," Martinez said in a follow-up interview. "We've been on that path for some time. This then is we've kicked it into high gear. We're doubling down. Accelerating that investment."
Older branches, naturally, will receive a larger investment and more thorough facelift, "but the destination is the same for every location," Martinez added. "They're built to be centers for advice, where customers and employees can be confident and secure about all the information and discussions that they'll have. The feel will be inviting. It will be something where you go in and you're not only [satisfied] with the conversation you had, but you're proud of the bank you bank with."
According to Piper Sandler's Siefers, "the ambitious branch plans disclosed by the industry's largest players reinforce the importance of scale in an industry dominated by a handful of existing and a couple of emerging national players."
