A branch bank is a single bank that operates two or more branches both or all of which have one group of directors and one charter or act. Branch banks are thus consolidations of several unit banks. It is believed that branch bank provides greater strength and stability than unit banking for several reasons namely.

First it facilitates diversification of activities particularly if the geographical area covered by the set of branches is sufficiently large.  By averaging or spreading risks, it reduces the danger of failure.

Branch banks can look after the needs of larger borrowers more easily since they can concentrate resources where they may be needed for larger loans.

A branch banking system can open an office or operate a mobile unit in a location that could not support a unit bank, since a mobile unit branch is less expensive to operate than a small independent bank,

Banking services are thus more widely available and conveniently located under a branch system than under a unit banking system.

Branch banking raises banking standards. The bank can hire a competent managerial force that can handle technical problems and make wise judgments in the operation of the institution.

The concentration of financial resources facilitates the movement of funds and makes possible more rapid mobilization of the resources in the time of emergency. Under a branch banking system a single institution can transfer the savings of one area of the country to the other area where loans are in greater demand. The transfer of funds which helps to make loans equally available in all parts of the country is less likely to happen where each bank is an independent unit.

The system also offers more job opportunities than unit banking.

A loss in one Branch can be covered up gains in other Branches.