Magazine article American Banker

U.S. Bancorp Plans 200 New In-Store Branches, 170 with Grocery Chain

Magazine article American Banker

U.S. Bancorp Plans 200 New In-Store Branches, 170 with Grocery Chain

Article excerpt

###BARTON CROCKETT

U.S. Bancorp has joined the new wave of banks planning a big push into supermarket banking.

The Portland, Ore.-based bank company said Wednesday that it plans to open about 200 branches in supermarkets during the next four years, 170 of which will be in Albertson's Inc. stores in Oregon, Washington, Idaho, and Nevada as part of an exclusive agreement.

The plan reflects U.S. Bancorp's new confidence that in-store banking can be profitable. It had gained confidence in the strategy by opening 32 such branches during the past two years.

The Albertson's agreement could also make it harder for other banks to develop big, in-store branch networks in the Pacific Northwest, since the deal locks up one of the region's biggest grocery chains.

"Customers are voting with their feet," said Kathy Haffner, vice president of the bank's in-store banking division.

Though the in-store sites numbered only 5% of U.S. Bancorp branches last year, Ms. Haffner noted, they accounted for 37% of its growth in households served. The company plans to spend $20 million to $25 million to open the new in-store branches, she said, and expects them to be profitable in 18 to 24 months.

Half the in-store branches are to be full-service, with five to six bankers and a teller counter; the rest will employ a single banker and will not handle teller transactions.

Ms. Haffner said that U.S. Bancorp, like other banks, is attracted to the relatively low cost of opening supermarket branches - $150,000 to $200,000 per site, compared to $1 million for a traditional branch - and the opportunity to see new prospects. About 20,000 people per week shop in a typical Albertson's store.

The bank plans to study ways to replace traditional branches with in store sites. But closures of traditional branches are at least two years off. …

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