The Bank of New Zealand is to close eight branches by Christmas and a further 30 over the course of next year going against its promise not to close any more regional branches until 2022.
Paul Carter, BNZ chief customer officer, said it had not made the decision lightly.
"We made our commitment on regional branches in good faith. Not only was it a commitment to the communities we serve, it was also a commitment to our people, as closing a branch used to mean losing jobs.
"However, Covid changed everything. Our customers have embraced digital services and tools and our bankers are serving customers irrespective of where they are.
"We've shown we can work from anywhere and there are job opportunities for all our people - it reflects the ongoing shift in how our customers are choosing to bank with us."
Carter said it was closing the branches as customer demand for its digital services accelerated and its people opted for increased flexibility and remote working.
"Covid-19 has accelerated trends we've been seeing for some time. Around three quarters of our customers are digitally active and they are increasingly choosing to do their banking this way, or over the phone.
"The majority of our customers are banking online and our talented bankers are often waiting in empty branches for customers that simply do not arrive."
Carter said historical ways of banking like cash and cheque transactions had fallen significantly and the majority of transactions conducted in BNZ's branches had moved to BNZ's Smart ATMs and online.
"Branches will still have a role in how we serve our customers. We will continue to invest in modern customer centres to help customers take advantage of online banking and our digital tools, and where they can access specialist services."
It had recently opened new branches in Auckland's Commercial Bay and a Whakatipu customer centre.
The branches it will close by Christmas are Courtenay Place, Greerton, Manurewa, Mosgiel, Mount Maunganui, Pakuranga, Papatoetoe and Petone.
It will close another 14 branches between February and March 2021 based in Cromwell,
Geraldine, Huntly, Katikati, Ohakune, Opotiki, Orewa, Otorohanga, St Heliers, Taihape, Waiheke, Waimate, Wairoa and Westport.
A third tranche of 16 branches will close between April and June. Those branches are in Akaroa, Balclutha, Coromandel, Dannevirke, Hanmer Springs, Kaikohe, Methven, Reefton,
Stratford, Takaka, Taumarunui, Te Aroha, Waihi, Waipukurau, Whangamata and Winton.
BNZ will have around 100 branches and partner centres open after the closures.
Carter said changes to its branch network were part of a wider review of all BNZ locations to consolidate its workforce.
BNZ's move follows that of ASB which recently announced the closure of 23 branches.