The European Banking Federation (EBF) said the number of bank branches in the EU had been reduced to 189,000 at the end of 2016, a 4.6 per cent fall on the previous year.
Staff numbers fell to about 2.8 million – the lowest level in 20 years.
The EBF also found there were 6,596 lenders across the bloc at the end of 2016, down 6 per cent on 2015. There were 8,525 in 2008.
The report said Germany held 25 per cent of all EU banks.
Bank branches have become vulnerable in the wake of rock bottom interest rates, which decreases profits made through loans and investments.
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According to the EBF website: “In times of low interest rates, profitability becomes a key challenge banks face.
“With ECB’s ultra-low interest rates, banks in the European Union do not escape this challenge. The return on equity (ROE) – a key indicator to assess the bank sector’s attractiveness for investors – was 3.5 per cent in 2016 for EU 28, down from the 4.3 per cent seen in 2015.
“After a sharp contraction in 2008 to – 1.5 per cent from 10.6 per cent in 2007 due to the impact of the financial crisis, the ROE of European banks has been slowly recovering with the latest setbacks in 2011 and 2012 when the ratio fell again into negative territory.”
The switch to online transactions and mobile banking has also reduced the number of people relying on bricks and mortar branches.
The contagion is not exclusive to Europe – this year, British banks are expected to close a record 762 branches, Reuters reported.
In an attempt to buck the trend, some banks have resorted to charging for services that were previously free, such as some current accounts and withdrawals.
Banks also looked to consolidate or merge to increase profitability – a trend that began in 2009.
This somewhat skews the true picture of bank closures – merged companies have closed superfluous branches close to existing ones.