THE Commonwealth Bank has agreed to stay open in Summer Hill for at least another 12 months, but has fallen short of offering a long-term commitment.

The bank signalled the closure of its Lackey St branch in June when the site owner lodged a development application to turn the block into retail space and 14 units.

Hundreds of residents had fought the plans, including action group Save Our Bank Summer Hill.

It was feared the impact on small businesses and residents who rely on face-toface banking.

The Commonwealth Bank confirmed it has finalised a 12-month lease to extend its arrangements until June next year.

The agreement comes after the $3.5 million redevelopment proposal was rejected by Inner West Council in January.

A Commonwealth Bank spokeswoman said the bank “was just as surprised as the rest of the community by the news of the development application”.

“We were offered a 12 month lease renewal by the owner of the property, which we accepted,” she said.

Summer Hill state Labor MP Jo Haylen welcomed the announcement, but called for longer-term commitments for the site.

The planned closure came as figures showed the number of bank branches dropped 5 per cent in 2015-16.

“Local suburbs need local branches to thrive and we’ve seen too many services disappear over the past few years,” Ms Haylen said.