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| Nigerian Banks Shut 229 Branches |
Discover why Nigerian banks shut 229 branches nationwide, the role of POS and digital banking, and how this shift is reshaping access to financial services in 2026.
In a landmark development reflecting how rapidly financial services are evolving in Nigeria, nigerian banks shut 229 branches nationwide over the past year. This change marks a significant shift in how customers access banking services and highlights the impact of digital payments and financial technology on traditional banking models.
In this comprehensive, up-to-date article, we’ll explore why this happened, what’s driving the trend, how it affects customers and businesses, and what the future of physical banking might look like in Nigeria.
Nigeria’s banking landscape is undergoing one of the most transformative periods in recent memory. According to the most recent Central Bank of Nigeria (CBN) Financial Sector Statistical Bulletin, banks closed 229 physical branches between 2023 and 2024—a significant contraction in the traditional banking footprint. These closures didn’t happen in isolation; they coincide with the explosive growth of digital payment channels, particularly Point of Sale (POS) terminals, and a broader customer preference for electronic financial services over brick-and-mortar branches.
Understanding the implications of this shift is critical for anyone who uses financial services in Nigeria, whether as an individual, a small business owner, or a stakeholder in the financial sector.
The Data Behind the Branch Closures
How Many Branches Closed?
The most recent data shows that Nigerian Deposit Money Banks (DMBs) — including commercial, merchant, and non-interest banks — closed 229 physical branches nationally between 2023 and 2024. During this period, the total number of bank branches and cash centres fell from 5,373 to 5,144.
Interestingly, this contraction occurred even while the number of licensed banks grew from 33 to 35, suggesting that the sector’s physical footprint was shrinking despite institutional growth.
What’s Driving Bank Branch Closures?
Several major trends are fueling the decision by banks to shut branches:
1. Rapid Growth in POS Transactions
The rise of Point of Sale (POS) terminals is central to the reduction of physical bank branches in Nigeria. According to CBN data:
- POS transaction volume rose from 9.85 billion in 2023 to 13.08 billion in 2024 — an approximate 33% increase.
- The value of POS transactions more than doubled, climbing from ₦110.35 trillion in 2023 to ₦223.27 trillion in 2024.
This surge underscores that more Nigerians are turning to electronic payments for daily transactions, reducing the need to visit bank halls.
2. Customers Embracing Digital Banking
Bank customers are increasingly using digital channels — such as mobile apps, internet banking, and agent networks — to perform routine tasks like checking balances, transferring money, and making payments. These channels are often faster, cheaper, and more convenient than visiting a branch.
3. Cost Pressures and Efficiency
Operating physical branches is expensive. Banks must pay rent, utilities, personnel salaries, and security costs for each outlet. As customers shift to digital and POS channels, maintaining many low-traffic branches becomes less financially viable.
Where Branch Closures Were Most Pronounced
The decline in bank branches was not uniform across the country. Some areas saw steeper contractions than others:
States With Notable Reductions
- Ebonyi State saw the largest drop, with branches falling from 120 in 2023 to just 31 in 2024 — a loss of 89 branches.
- Oyo State lost 26 branches, reducing its total to 200.
- Niger State saw a decline of 32 branches, falling to 76.
- Ekiti and Ondo each recorded losses of 18 branches.
- The Federal Capital Territory (FCT) also saw a reduction of nine branches.
These figures reveal that branch closures are happening not only in rural or semi-urban areas but also in populous and commercially significant regions.
States With New Branch Openings
Some states, however, bucked the overall trend by adding new branches:
- Delta State saw a net increase of six branches.
- Rivers State added eight.
- Edo, Kaduna, and Kano each recorded eight new outlets.
- Katsina, Adamawa, Jigawa, and Kogi also saw modest gains.
These increases suggest that banks are becoming more selective, expanding presence in areas with rising commercial activity or population growth while retreating from low-footfall locations.
The Role of Digital Banking, Fintech, and POS Networks
Digital Banking’s Appeal
Digital channels have removed many traditional barriers to financial inclusion. Mobile banking apps and USSD (Unstructured Supplementary Service Data) platforms allow customers to:
- Send and receive money instantly
- Pay bills and buy airtime
- Open accounts without visiting a branch
These digital pathways have become especially attractive for younger, tech-savvy Nigerians and small business owners, who value speed and convenience.
POS Terminals as Everyday Banking Tools
POS terminals have become ubiquitous in markets, retail centres, and local communities, enabling consumers to:
- Pay merchants directly
- Withdraw cash without visiting a branch
- Accept payments for goods and services
The sheer growth of POS usage highlights a broader shift towards agent-based banking, where third-party operators provide financial services close to customers’ homes and workplaces.
What This Means for Bank Customers
A Decline in Branch Footprint
For many Nigerians, especially those in rural or semi-urban areas, branch closures may present challenges, including:
- Longer distances to reach remaining branches
- Reduced access to in-person support for complex transactions
- Potential gaps in services for less digitally connected populations
However, since many customers have already embraced digital channels, banks are betting that the convenience and availability of electronic services will offset these losses.
A Surge in Alternative Banking Access Points
As POS terminals and digital solutions become more widespread, customers can:
- Conduct everyday banking tasks electronically
- Access cash withdrawals via agents where ATMs or branches are absent
- Avoid long queues and limited business hours at branches
The Central Bank of Nigeria’s (CBN) Role
The CBN has been tracking financial sector trends closely. Its statistical bulletin reported the closure of 229 branches and the rapid growth of electronic transactions as part of broader structural shifts in the financial system.
Central banks globally are encouraging digital financial systems for efficiency, convenience, and formalization of the economy — and Nigeria is no exception.
Challenges and Criticisms
While there are clear benefits to digital banking, several concerns have emerged:
Cash Scarcity and ATM Shortages
In late 2024, many bank ATMs were reportedly empty, pushing more customers toward POS withdrawals at higher fees. This situation underscored the limitations of relying too heavily on digital channels without adequate cash access infrastructure.
POS Operator Regulation
The rise of POS terminals has also led to debates about regulation. In some reports, a forthcoming Corporate Affairs Commission (CAC) requirement threatened to shut down millions of unregistered POS operators, potentially affecting financial access for some users.
Customer Experience
According to industry surveys, traditional banks still face challenges in customer experience, especially for small and medium enterprises (SMEs) and areas with limited digital literacy. Improving user support and digital education remains vital.
The Future of Banking in Nigeria
The closures of 229 branches signal a clear trend: the future of banking in Nigeria is digital and agent-based. However, this evolution is not a one-size-fits-all solution. For inclusive financial growth, a hybrid model that balances digital innovation with targeted physical presence may be most effective.
Key Future Trends
- Increased reliance on digital channels
- Expansion of fintech platforms like mobile wallets
- Growth of agent banking networks
- Tailored branch presence in strategic locations
As customer behaviours continue to evolve, banks will need to balance cost-efficiency with accessibility and customer service excellence.
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A Banking Sector in Transition
The fact that nigerian banks shut 229 branches over the past year is a powerful indicator of how rapidly financial services are changing in Nigeria. This shift is driven by digital adoption, changing customer preferences, and the explosive growth of electronic payment channels like POS terminals.
Although physical branches remain important, especially for complex banking needs and underserved communities, the momentum toward digital and agent-based services is undeniable. For consumers and businesses alike, the key will be adapting to this new landscape with confidence and awareness.
As banks continue to evolve their models, the future looks increasingly digital — but with strategic physical presence where it matters most.
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