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The changing geography of banking in CESEE. Branch closures outpace openings

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  • Beckmann, Elisabeth
  • Weinel, Jette Leonie

Abstract

We study the evolution of bank branch networks in ten CESEE countries between 2013 and 2021. Using a manually compiled dataset of all branches and their geocoordinates, we document a decline exceeding 30%, with substantial heterogeneity across and within countries. We show that banking market consolidation is a key driver of closures, while profitability and local economic growth mitigate them. Branches in highly urban or very rural areas close more often. Competitive effects are nonlinear: moderate clustering lowers closure risk, but intense competition increases it. These patterns differ markedly across CESEE banking systems during the entire period we analyze. JEL Classification: D53, G21, R12

Suggested Citation

  • Beckmann, Elisabeth & Weinel, Jette Leonie, 2026. "The changing geography of banking in CESEE. Branch closures outpace openings," Working Paper Series 3256, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20263256
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    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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