(Yicai) April 24 -- Since the beginning of last year, more than 25 listed Chinese brokerages have closed or merged hundreds of branches to reduce costs and raise performance after an aggressive and brisk expansion period.

Beijing-based Hongta Securities shut six branches in 2023 and announced the closure of two more yesterday. Citic Securities, headquartered in Shenzhen, also recently disclosed a plan to shut five.

In the past two months, Southwest Securities, Minsheng Securities, Guosheng Securities, and other brokerages have all announced branch closures.

The closures are the result of excessive and rapid expansion, which resulted in bloated organizations, a source at a leading Chinese brokerage told Yicai. Amid tough competition some regional offices cannot go on, the person said.

China Galaxy Securities disbanded 18 last year, according to its annual report. Sealand Securities and Shanxi Securities shut 11 and eight, respectively, over the 12 months.

Shanxi Securities said the Taiyuan-based firm had combined human and material resources to focus on outlets with greater potential and to minimize losses had closed those that performed poorly or lacked resources.

As the frontline for marketing and client acquisition, the function of branches cannot be replaced in the future, the source pointed out. As competition deepens, enhancing employees' comprehensive service capabilities, product selection, and sales ability is crucial, they added.

Editor: Futura Costaglione