(Yicai Global) Dec. 1 -- Bank of China’s decision to close its city-level branch in Lanzhou, the capital of China’s northwestern Gansu province, after just three years is an unusual step, according to an insider.

The branch’s shuttering is a rare case that may be due to poorer-than-expected operations, the person said.

The provincial office of China’s banking and insurance regulator approved the closure yesterday, without disclosing the reason behind it.

Bank of China, one of the country’s Big Four lenders, said it will not affect customer service. All business of the Lanzhou second-level branch, which is under the BOC’s Gansu first-level branch also located in the city, will move to other branches in Lanzhou, a manager told Yicai Global.

The city branch opened in December 2018. Zang Xinjun, president of Bank of China at the time, said the Beijing-based lender would further concentrate its resources and continue increasing support to contribute to Lanzhou’s development.

Large commercial banks change their institutional settings in provincial capitals now and then, often switching back and forth between independent and provincial branches, both having their own advantages, said Dong Ximiao, chief researcher at Merchants Union Consumer Finance.

Provincial branches can reduce management levels, flatten the organizational structure, reduce costs, and respond more quickly to market and customer needs, while independent branches can give provincial capital cities greater support with more resources and refined management, Dong said.

BOC had 10,449 offices in the Chinese mainland as of June, of which 38 are first-level branches, 370 are second-level ones, and 10,041 are sub-branches.

Editors: Shi Yi, Futura Costaglione