Brazil’s biggest lender Banco do Brasil SA announced that it will shutter its 402 branches, plans to ponder its sweats on its digital channels to both surge productivity and cut costs.
Not just that, the lender said it would cut the number of facilities offer to its customers through left out 379 branches. Remaining branches will expected count on fewer staffs to serve customers. By the end of last quarter the company had a total of 5,430 branches.
The Latin America’s largest bank by assets said in a statement that this decision will designed to save Banco do Brasil up to 750 million reais or $220 million a year.
“Forty percent of our clients’ transactions take place through mobile phones and 27% via internet. Digital channels are the most efficient way to attend our clients currently. This trend also represents an opportunity to us to increase our profitability,” said Banco do Brasil President Paulo Caffarelli during a conference call with reporters.
“We are doing a digital transformation,” he said. “This digital transformation is happening in several sectors and has reached banks’ industry too.”
Moreover the state-run bank will also embrace a retirement incentive plan for its employees, with subscriptions to be accepted until Dec. 9 and the bank said 18,000 from it total of 112,751 workers currently would be able to voluntarily join the plan.
According to Mr. Caffarelli, if all 18,000 employees subscribe to the program, it will have an upfront cost of 2.7 billion reais, but would reduce fixed costs by 3.05 billion reais a year.
“It is important to highlight that this is a projection,” he said. “The program is voluntary.”
This initiative followed as the bank’s profit fell behind, private-sector peers, which took a more conservative approach to lending when the country’s economy started to drop, then contract.
Banco do Brasil reported a net profit fall of nearly 27% in the latest 3 month period, as its loan portfolio shrank and loan-loss provisions augmented. Its net profit totaled 2.25 billion reais in the third quarter, down from 3.06 billion reais year over year.