Capital One Will Triple Its Spending on Branch Optimization in 2016

Capital One is known for being a digital company, and for its celebrity-driven marketing, but it’s also a bank with branches, and those branches need to be updated.

CEO Richard Fairbank usually talks about his bank’s digital efforts when he has a good audience, but on yesterday’s earnings call, he spoke instead about Capital One’s strategy with its branches. According to, Capital One currently has 840 branches in the U.S. The amount the bank will spend to “optimize” its branches will more than triple in 2016 over 2015, Fairbank said. Optimization generally refers to removing teller windows in favor of ‘pods’ or tables, making spaces more open, and often, moving from a large floorplan to a much smaller and less expensive space. Here’s Fairbank:

In our retail deposit businesses, customer needs and preferences are changing driving changes to the function, format, and number of our branches. Like all banks, we’ve been optimizing both the format and number of branches to better meet the evolving needs of our customers as banking goes digital.

In 2015, branch optimization costs were about $50 million. We are planning to accelerate these efforts and we expect branch optimization cost to be elevated in 2016. We are still formulating specific plans and timings, but based on what we see today we expect to recognize branch optimization expenses of about $160 million in 2016. In the first quarter, actual charges were $11 million.

There was not much more the bank wanted to put out on this topic. A request for more information from Bank Innovation went unanswered, and a question from an investor yesterday also yielded little. CFO Steve Crawford offered the following:

Obviously the branch optimization in and of itself on a narrow basis creates savings, but we’re also investing in that business in other places and really what we want to do is talk about this on consolidated level. Rich, I don’t know whether you have anything to add.

Fairbank answered, “Nothing.”

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