The ASB bank is closing nine branches in main cities and cutting opening hours to three days a week at 25 other branches nationwide.
Retail banking head Craig Sims acknowledged the closures "may be disappointing for some branch users" but said the bank was not cutting support for customers.
"The branches not reopening have experienced very low number of customers using the branch.
"Some, for example, serve only 900 customers a year so that's only two to three a day. There is also a branch nearby for customers to use.
"Our decision is motivated by a desire to provide a better overall personal experience for customers and our people."
Sims denied it was "a cost-cutting exercise".
In the past five years, branch transactions had declined by 42 percent.
"And now 85 percent of our personal customers prefer the convenience of our online and mobile services. Add to that, since lockdown in March around 13,500 customers have used our digital channels for the first time to do their banking and they're continuing to do so," Sims said.
"We will still have 109 branches across the country. Also starting today, we will be proactively calling customers we know who use an impacted branch and letting them know how we will be supporting them through this transition."
From Monday, 3 August, 25 branches will permanently move to operating three days a week, Monday, Tuesday and Friday.
The branches closing are: Auckland Hospital, Parnell, Ronwood Avenue in Manukau City, Ellerslie and Mt Albert in Auckland, Waikato University in Hamilton, Papamoa in Bay of Plenty, Barrington in Christchurch and Mosgiel in Otago.
No job losses
No job losses were expected as staff could move to other branches, or roles within the company.
The bank also announced it would recruit an additional 150 staff to provide specialist support.
"The positions are for people who will work across phone, online and branch network responding to customers needing a range of specialist assistance, from Covid-19 related help, to buying a home or planning for retirement."
The bank would be calling customers who use any of the affected branches.
It would also work with Age Concern to help older customers transition to using mobile and online services.