What is a Shell Branch

A shell branch is a branch location of a U.S. chartered bank located outside the United States. Shell branches function as booking offices for the bank's financial transactions that happen outside the country. Shell branches also accept deposits and perform transactions for foreign banks. The ledgers of these banks are usually kept at the bank's domestic headquarters or main office. Shell branches are frequently housed inside offshore banking centers.


A shell branch is a foreign branch of a U.S. chartered bank and is located outside of the United States. Shell branches provide relatively cheap access to the Eurocurrency markets with comparatively light amounts of regulation. Many of these branches are located in the Bahamas and Cayman Islands. They are somewhat similar to international banking facilities, which are domestic shell branches of U.S. banks.

Example of a Shell Branch

For example, XYZ Bancorp is a U.S. charted bank. It has many locations inside of the United States. It also has locations in Switzerland, the Bahamas, and the Cayman Islands. At these locations, XYZ Bancorp performs transactions and accepts deposits from the local banks located in these regions.