Russian banks slash branches as customers move online

Russian banks are rapidly shrinking their physical branch networks, with credit institutions closing 1,370 additional offices between January and August 2026, according to Central Bank data reviewed by Izvestia.

Banks shut an average of 196 branches per month during the period, bringing the contraction of Russia’s banking network to its sharpest level in seven years.

Sberbank accounted for around 40% of the closures, having discontinued operations at nearly 540 offices since the start of the year.

The accelerated branch closures are partly linked to recurring mobile internet disruptions, which can prevent customers from accessing remote banking services, said Ilya Larin, a leading analyst specializing in credit institution ratings at Expert RA.

At the same time, tighter controls over banking transactions have resulted in more customers facing account restrictions. In some cases, customers must visit a branch in person to resolve such issues, said Vasily Kutin, Director of Analytics at Ingo Bank.

Banks are also seeking to reduce operating costs amid rising expenses and staff shortages, according to Natalia Milchakova, a leading analyst at Freedom Global.

As customers increasingly shift to digital banking, the number of bank branches in Russia could decline by 2–2.5 times over the next five years, falling to approximately 12,000, Milchakova said.

However, analysts do not expect physical branches to disappear entirely. Russia’s vast territory, uneven access to digital technologies and continued demand for face-to-face services mean that banks will still need a physical presence, said Konstantin Borodulin, Managing Director for Financial Institution Ratings at NRA.

Banks will therefore have to balance cost efficiency with access to financial services, Borodulin said.

Routine transactions are expected to move increasingly to digital platforms, while physical branches will focus on complex financial products, consultations and services requiring personal assistance.

By Vafa Guliyeva