The transformation of bank branches in 2025 is something to watch.
In terms of sheer numbers, according to data from the State Financial Regulatory Commission, domestic commercial banks closed approximately 7,871 offline branches in 2025. Meanwhile, 8,494 new commercial bank branches were established throughout the year. This means that despite the significant number of branch closures, there was a net increase of 623 branches, marking the first positive growth in nearly three years.
"The net increase in branch outlets is due to the underlying reason that the banking industry is undergoing a strategic transformation from 'scale expansion' to 'structural optimization.' This is not simply a rebound in numbers, but a structural restructuring," said Xue Hongyan, a special researcher at Jiangsu Commercial Bank, in an interview with the Financial Times.
While retreating and advancing, bank branches have not "disappeared."
What does it mean that 7,871 commercial bank branches in China will be closed by the end of 2025?
This can be seen from the data comparison. In 2024, commercial banks closed 2,483 offline branches, compared to 2,649 in 2023. This means that the total number of branches closed in 2025 exceeded the total number of branches closed in the previous two years.
A review of the closed branches by reporters revealed that, in terms of bank type, rural commercial banks had the largest number of branches closing, approximately 5,400; large state-owned banks closed over 900; while city commercial banks and joint-stock banks had relatively fewer.
The significant reduction in bank branches in 2025 is closely related to the large-scale integration of the rural credit system.
According to statistics from Enterprise Early Warning System, based on the latest approval date, as of December 8, 2025, 377 banks were deregistered in 2025 due to mergers or dissolutions approved by regulators, exceeding the total number for the entire year of 2024. Among them, rural banks had the highest number of deregistrations, reaching 218, accounting for nearly 60%; rural commercial banks and credit cooperatives were deregistered 79 and 70 respectively.
For example, in May 2025, Inner Mongolia Rural Commercial Bank Co., Ltd. was officially established with a registered capital of 58.02 billion yuan, becoming the first provincial-level unified legal entity bank in the country to integrate 120 rural credit institutions and village banks in one go.
"The contraction of bank branches in 2025 will mainly focus on rural financial institutions with historically dense layouts and low business efficiency. This is the result of the combined effects of digital substitution and regional integration. On the other hand, new branches will be precisely targeted at specific scenarios and key areas, such as thematic branches for supply chain finance and elderly care finance," Xue Hongyan analyzed. He believes that this "retreat and advance" is essentially the industry's proactive optimization of resource allocation by banking institutions under the guidance of regulators to "reduce quantity and improve quality" and cope with cost pressures. This is driving the transformation of physical channels from widely covered "transaction windows" to "value nodes" providing precise services.
"Stable total volume, structural restructuring, and functional upgrades" may be the new pattern for branch networks.
While the number of branch closures reached a record high, the number of new branch openings also hit a new high in recent years. In 2025, a total of 8,494 commercial bank branches were approved to operate. For example, the Bozhou Qiaocheng branch of Bank of Communications and the Ruian branch of Ordos Bank were approved to open at the beginning and end of 2025, respectively.
In the past two years, expanding the layout of offline specialty branches has become a trend in the banking industry. Its advantage lies in building its own brand and reputation through the creation of distinctive services and businesses, thereby driving customer acquisition and retention.
"Banks typically focus on establishing new branches in counties, communities, and sectors such as elderly care and government services, driving the transformation of branches towards a lighter, smarter, and more multifunctional model," said Lou Feipeng, a researcher at China Postal Savings Bank, in an interview with the Financial Times.
Data released by the China Banking Association shows that over 90% of branches have implemented smart teller machines, and some branches have also introduced new service models such as remote video customer service and VR experience zones.
Xue Hongyan believes that in the future, the total number of bank branches will tend to stabilize dynamically, but internal structural adjustments and functional upgrades will continue to deepen. The industry will present a new pattern of "stable total number, structural restructuring, and functional upgrades." Branch network layout will more closely align with the needs of regional economic development and customer characteristics, serving inclusive finance and cultivating the local ecosystem while creating high-value professional service centers in core areas, achieving an organic combination and functional complementarity between online convenience and offline experience.
Lou Feipeng believes that the future trend of bank branches will likely continue the trend of relatively stable total number while undergoing a deep structural restructuring. The total number of branches may fluctuate slightly, but while the number changes, more emphasis will be placed on improving service efficiency. Traditional counter branches with high costs and low efficiency will continue to shrink, while new types of branches embedded in communities, catering to the elderly, and collaborating with government services will become the mainstream.
