Branching patterns and financial exclusion in Spain

Abstract

Over the last few decades the Spanish banking industry has undergone a profound restructuration. One of the triggers that have provoked this has been the geographic expansion of savings banks into other regions outside their former area of branching. This expansion has been taking place at an increasingly pace since 1989 when the law which allowed to open new branches all around the national territory was passed. Concurrently, the Spanish economy has grown at significant annual growth rates. However, this fast-paced growth came to an end in 2008. Taking into account the circumstances mentioned, this dissertation analyses the geographic expansion patterns of Spanish financial institutions after the deregulation and the implications of rural financial exclusion. This dissertation also aims to extend previous analyses and compare the outcomes. The results show that location patterns differ by type of firms; the patterns have evolved over time; some municipalities have experienced financial exclusion and that it is difficult to establish a linear relationship to explain diversification strategies.