The reason a branch closes is usually the presence of a nearby branch of the same bank. Moreover, the number of bank and thrift branches has increased each year since 1993. The impact is not clear. Market conditions and the level of competition often determines the cost for retail bank services. Overall employment in the banking industry actually has increased slightly over the last five years.
Some mergers do result in layoffs.
Over the last decade, the number of commercial banks declined by one third and the average asset size nearly doubled as banks acclimated themselves to deregulation, technological change, and new market pressures. Currently, the fifty largest bank holding companies hold approximately 68 percent of all commercial bank assets compared to 55 percent in 1990. A study conducted by the Federal Reserve Bank of New York reveals that the rise in the concentration of assets is primarily due to external growth through mergers and acquisitions, implying that the increased concentration reflects a transfer of banks assets as ownership changed through consolidation, rather than internal growth of existing subsidiaries. Thus, the key motivation behind the rise in merger activity in the 1990s was the removal of excess capacity rather than an effort to use competitive advantage to expand existing operations. The rise in the number of new banks in the second half of the 1990s coincides with a surge in merger activity in the same period.