Bank exits ominous sign for small towns

Customers who bank elsewhere will do their shopping there too.

ments in technology had been driving a long-term trend towards urbanisation, he said.

‘‘It’s death by a thousand cuts. To think that somehow we’re going to be able to turn the tide around is unrealistic.’’ Research senior economist Christina Leung said there was no reason for banks to keep a branch open if it was not commercially viable.

If another bank branch was closer than the nearest Westpac then customers should switch to that bank, she said.

If there were no other banks in a town it indicated the industry did not deem the town economically viable to have a presence, she said.

‘‘The reality is that it does come down to the numbers,’’ she said. ‘‘It’s of little comfort to the towns themselves but that’s how it works.’’

If residents travelled out of town to bank that could result in a flow of funds out of the local economy as people did their shopping elsewhere, she said.

Bruce Thompson, a spokesman for taxpayer-owned Kiwibank, said it would not be stepping in to fill a void left by Westpac in communities which no longer had a bank branch.

‘‘We’re not looking at expanding our network at this stage,’’ Thompson said.

Kiwibank is a wholly-owned subsidiary of New Zealand Post, which is a 100 per cent state-owned enterprise. Set up in 2002, it operates through NZ Post’s 280 PostShops.

Its website said its retail network has the largest reach of any bank operating in New Zealand, ‘‘servicing communities where the other banks have closed’’.

Thompson said it would be unlikely the Government would dictate where Kiwibank should operate.