Does Distance Influence Profitability of Bank Customers?

Eduardo Kalil Hanna

Authors

Eduardo Kalil Hanna

Keywords:

bank customer profitability, trading area, peformance

Abstract

This study aims to identify whether customers who live further away from bank branches where they opened their checking accounts are as profitable as those who live closer. For this purpose, it were selected 30 bank branches of one of the largest retail banks in Brazil and it was used analysis of variance in order to compare customer mean profitability of these branches among primary, secondary and fringe trading areas for those customers who receive their salaries by the bank and also for those who don´t receive. Regardless of whether customers receive or not their salaries by the bank, those who live further from the branches where they opened their checking accounts are as profitable as those who live closer and, in some cases, they are more profitable. So, Banks must take into account all customers of a branch and not only those who live closer it in order to develop strategies for customer retention and for increasing profitability provided by customers.

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Does Distance Influence Profitability of Bank Customers?. (2015). Global Journal of Management and Business Research, 15(A11), 5-15. https://journalofbusiness.org/index.php/GJMBR/article/view/1796

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Author´s Information, Eduado Kalil Hanna (2015) is a Phd Student and he has been working for a retaling bank for more than twenty years. Does Distance Influence Profitability of Bank Customers?.