Kiwibank plans to close seven branches over the next year in a response to more customers moving online to do their banking.
The state-owned bank revealed the proposed branch closures while announcing its half-year result which saw its net profit rise $4m to $55m for the six months to December 2020.
Chief executive Steve Jurkovich said changing customer preferences and operational matters such as lease reviews had resulted in a proposal to close seven branches over the next 12 months.
"Covid-19 has only seen a further acceleration of this trend. The average customer visits a branch one to two times a year and uses online, mobile or phone banking at least five times a week."
He said visits to some branches had more than halved over the past five years.
The impacted branches were in Balclutha, Gisborne, The Palms (Christchurch), Matamata, Onehunga, Waihi, and Waipukurau.
The proposal is subject to consultation with branch teams and engagement with local communities.
"We appreciate the proposed changes can create uncertainty for our people, our customers, and communities and that's why there is a period of time so we can make fully informed decisions.
"We continue to offer all customers support to understand and use faster, safer and cheaper methods of banking, including telephone banking, mobile and internet banking, direct debits and guidance on how to set up automatic payments," he said.
The proposals affect 23 full-time equivalent roles.
Jurkovich said it was doing everything it could to provide alternative employment options for those team members.
"We are certainly trying to create options for them and we are way better placed than we were a year ago to be able to offer a meaningful opportunity to work from home and contribute to supporting customers - I am pleased we are in that position because to be frank a year and half ago we wouldn't have been in that position it would have been more difficult."
But he said it was also up to those employees to make a choice as well. "They may not want to move into those roles."
Final decisions on the branch closures would be made within the next month, he said.
As at December 31 Kiwibank services were available at 184 sites with 69 standalone branches and one corporate store still shared with NZ Post.
Jurkovich said growth in both home loans and business lending contributed to its solid half-year result, with customer lending growth of $1.6 billion.
Customer deposits also grew by $1.3b, he said.
Total operating income was up $10m to $287m while expenses rose slightly by $2m to $209m.
But Jurkovich said the recent community cases of Covid-19 were a timely reminder of the considerable uncertainty facing the short and medium-term outlook for the global and domestic economies.
"We had forecast a significant rise in mortgage and business banking loan defaults, but numbers remain very low largely thanks to the hard mahi of all New Zealanders to contain the virus and keep our economy moving. We remain prepared to assist our customers and support New Zealand's recovery," he said.
The bank recorded no credit impairment losses in the half compared to $5m in the December 2019 half year.