Bank Branch Geographic Location Patterns in Spain: Some Implications for Financial Exclusion

Over the last 20 years, the Spanish banking industry has undergone a profound reshaping in several respects. One of the factors that has allowed this has been the geographic expansion of most savings banks into other regions outside their regions of origin that has been taking place at a significant pace since 1989. Almost simultaneously, the Spanish economy has grown at remarkable annual rates, a growth pattern that came to an abrupt halt in 2008. Under these circumstances, this paper analyzes the geographic expansion patterns of Spanish financial institutions during the postderegulation period. This goal extends previous analyses in two main ways: by considering a broader set of variables affecting bank branch location and by using a quantile regression in order to obtain results that go beyond conditional mean models. Results indicate that 1) location and geographic diversification patterns vary mostly across firms and by type of firm; 2) the evaluation of growth and financial development at municipal level indicates that some communities have experienced financial exclusion; and 3) it is difficult to establish a linear relationship to explain bank branch geographic diversification strategies.