From a banking group’s perspective, a range of factors play a role in the choice of branching versus subsidiarization, including banks’ business focus and differences in regulatory and tax regimes across jurisdictions. Banks with significant wholesale operations tend to prefer a more centralized branch model that provides the flexibility to manage liquidity and credit risks globally and serve the needs of large clients. The funding costs for the wholesale group are likely to be lower under the branch structure, given the flexibility to move funds to where they are most needed. A subsidiary structure, in contrast, puts constraints on the.
