Well, not so much if you look at other Western countries. However, the bigger question is whether they are all overbranched? Only Singapore, with 111 branches per million, is in a good position cost-wise. Italy and Switzerland, with more than 700 branches per million, have their work cut out for them as they reduce the number of branches from a level twice as high per capita as the U.S. total of 372 per million.
At our sister publication Online Banking Report, we've predicted that the total number of branches in the United States will fall by about 40% during the next 20 years (see note 1). Given expected population growth, that equates to about half the number of branches per million (using the BIS baseline, our projection is that the U.S. would have under 200 branches per million in 2025). The reason for the decline is the rise of the out-of-branch channels: phone, online, ATM, and soon mobile (see note 2).
Here's some interesting data from the Bank for International Settlements <bis.org>. Click on the table below to read five-year data trend. The 270-page PDF is located here.
Interestingly, of the 13 countries covered in the report, only Hong Kong, Singapore, Sweden and The Netherlands have fewer branches per capita than the United States. We have almost 25% less than the 13-country average. However, only two countries showed an increase in the 2001-2005 period; Italy which added 1,500 branches and the United States which grew about 6,000 (see note 2).
Here's the list in order of most branches to fewest per million inhabitants:
1. Italy >>> 762
2. Switzerland >>> 701
3. France >>> 649
4. Belgium >>> 566
5. Germany >>> 561
6. UK >>> 472
<< <AVERAGE >>> 471
7. Japan >>> 459
8. Canada >>> 441
9. U.S. >>> 372
10. Sweden >>> 295
11. Netherlands >>> 270
12. Hong Kong >>> 249
13. Singapore >>> 111
Notes:
1. See Online Banking Report's Decline of the Branch (#128), published May 2006
2. Tom Brown's been writing about the trouble some banking chains have been having with the performance of their new de novo branches.
3. In 2001 and 2002 the U.S. branch total in the BIS data set excluded credit unions.