The effect of branch network expansion on market share in banking: a case study of Co-operative Bank of Nigeria
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Background of the Study
Branch network expansion has long been recognized as a key strategy for increasing market share in the banking sector. Co-operative Bank of Nigeria has embarked on an aggressive expansion plan, opening new branches in underserved and strategic regions to tap into untapped markets (Ifeoma, 2023). This expansion is aimed at enhancing accessibility, fostering financial inclusion, and ultimately driving growth in market share. The bank’s strategy incorporates both traditional brick-and-mortar expansion and the integration of digital kiosks in remote areas to ensure a broad reach. The theoretical basis for this approach is supported by market penetration and competitive advantage theories, which posit that a wider physical presence can significantly boost customer acquisition and retention (Chukwu, 2024).
By expanding its branch network, Co-operative Bank of Nigeria aims to overcome geographical barriers and better serve customers in both urban and rural settings. The initiative is supported by investments in modern branch infrastructure, staff training, and localized marketing strategies that align with regional customer needs. Empirical research has indicated that banks with extensive branch networks tend to enjoy higher customer trust and loyalty, which translates into increased market share and sustainable revenue growth (Okoro, 2025). However, challenges such as high operational costs, regional infrastructural disparities, and competitive pressures from digital-only banks complicate the expansion strategy. This study seeks to evaluate the effect of branch network expansion on the bank’s market share, providing insights into how physical presence influences customer acquisition and overall competitive positioning.
Statement of the Problem
Although Co-operative Bank of Nigeria has expanded its branch network significantly, the anticipated increase in market share has not been uniformly realized. In some regions, new branches have struggled to attract the expected customer base due to factors such as poor local infrastructure, low brand awareness, and the growing preference for digital banking services (Adeniyi, 2023). Additionally, the high operational costs associated with maintaining physical branches may offset some of the revenue gains from increased market presence. Disparities in service quality and inconsistent customer experiences across new and existing branches have also emerged, undermining efforts to build a cohesive brand image. These challenges highlight the need for a comprehensive evaluation of the impact of branch network expansion on market share, as well as an analysis of the external and internal factors that influence its success (Chinwe, 2025).
Objectives of the Study
To assess the impact of branch network expansion on market share at Co-operative Bank of Nigeria.
To identify the factors that hinder effective market penetration in new regions.
To recommend strategies for optimizing branch performance and increasing market share.
Research Questions
How does branch network expansion affect market share at Co-operative Bank of Nigeria?
What are the main challenges limiting customer acquisition in newly established branches?
How can branch performance be optimized to improve market penetration?
Research Hypotheses
Branch network expansion is positively correlated with increased market share.
Infrastructural and local market challenges negatively affect the performance of new branches.
Enhanced regional marketing and service quality improvements lead to higher customer acquisition.
Scope and Limitations of the Study
This study examines the branch network expansion of Co-operative Bank of Nigeria over the past three years. Limitations include regional variations in market conditions and difficulties in isolating branch performance from overall economic trends.
Definitions of Terms
• Branch Network Expansion: The process of increasing the number of physical banking outlets.
• Market Share: The portion of the market that is served by the bank’s products and services.
• Financial Inclusion: The process of ensuring access to financial services for all segments of society.
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