For Fifth Third Bank, customer service is not just about digital transformation. The bank also wants to expand its physical retail branch footprint, according to its president and CEO, Greg Carmichael.
As a result of the bank’s $4.7 billion acquisition of Chicago-based MB Financial Inc., which closed last month, Carmichael noted in the Q1 earnings call today that Fifth Third has 91 additional branches. Thanks to these extra branches, Fifth Third is now the third-largest bank in the Midwest region, in terms of retail branch locations.
Carmichael said he plans on adding “100-plus branches” during the rest of the year. But, unlike the case with MB Financial, Fifth Third will instead adopt a de novo strategy of acquiring new branches, he said. These new branches will be heavy on technology and, for the most part, will be self-service branches — efficient and minimal in terms of human employees.
Customer experience is becoming a major priority for many banks. As a result of this, the dynamic between digital and physical banking experience is gaining attention for being ripe with opportunities to enhance the customer experience. Most recently, Bank of America announced it would increase the number of its financial centers (branches) through a “high-tech, high-touch” strategy in the name of customer experience.
Also Read: BofA Opening More Financial Centers to Support Digital Strategy
Portland, Ore.-based Umpqua Bank was one of the first banks to rethink the physical branch experience by designing their branches with “hotel- and retail-like elements,” according to its website. Umpqua’s branch offers free coffee, snacks, a waiting room/reading area stocked with the latest books, as well as a store that exhibits “products for sale from a rotating roster of local companies,” according to the website.
Whether Fifth Third will design its branches with a similar retail-like experience, Carmichael didn’t say. In terms of markets, he noted that Fifth Third will be adding the bulk of new branches in the country’s Southeast region.
Aside from inspiring branch-expansion, the acquisition of MB Financial also had a positive impact on Fifth Third’s financials. According to the Q1 results, the acquisition added $19.8 billion in assets, $13.5 billion of total loans and leases, $14.5 billion of total deposits, and 91 locations (including 86 full-service banking centers).
Fifth Third will start bank and account conversion of MB Financials Bank next month, Carmichael said.
According to the Q1 earnings call today, Fifth Third reported a net income of $775 million, compared to net income of $701 million in the same quarter last year. Fifth Third is trading up 4% today, at $28.08 per share. The bank has a market cap of $18.2 billion.





