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Site Seeking : Banks Widen the Field on Minibranches


Once a week, Loretta Costell fills up her Dodge van at a Unocal service station in Ontario, then walks inside the minimart and withdraws cash from one of two Bank of America automated teller machines.

In the corner of this minimart, BofA also has a counter where, on Fridays, Saturdays and Sundays, employees stand ready to open new accounts and help customers. But the one and only time Costell sought help, she was directed to a pair of telephones nearby where customers can obtain information about their accounts.

"I know they're trying to be more convenient," Costell said the other day while pumping gas. "At the same time, I think they're missing the point."

BofA opened this minibranch, on Archibald Street by Highway 60, last fall as part of a test. It is the only one of its kind in the state, though seven other Unocals are outfitted with the ubiquitous BofA Versateller ATMs.

BofA declined to comment on how the Unocal minibranch is doing. But judging by comments from customers such as Costell and Unocal clerks who watch the traffic--or lack of it, as they say--the bank-in-the-gas-station concept appears unlikely to spread any time soon.

Yet it is part of the banking industry's continuous search for ways to reach customers and provide at least some live service without opening costly branches. But as the Unocal test illustrates, finding an attractive substitute for the standard branch is no easy task.

Banks, notably Wells Fargo, have already saturated supermarkets, so where else will they go?

Two months ago, Glendale Federal Bank opened its first minibranch inside a Kinko's copy center in Simi Valley, and executive vice president Bill Birch says it has picked up 500 new individual and small-business accounts with deposits totaling $2 million. That's 40% ahead of projections, Birch says, adding that his company plans to open in 20 more Kinko's in California.

Glenfed also considered branches in gas stations, Birch says, but backed off "because it seemed to us that customers wanted to go in and out of there pretty quickly." By comparison, he says, people who visit Kinko's are there to get work done, so there's a greater window of opportunity.

The disadvantage, though, is that unlike the open space of supermarkets, copy centers are hardly roomy. At the Simi Valley Kinko's, two teller stations, an ATM, a merchant deposit box, plus phones and a desk are all compressed in 400 square feet of space.

"Our only concern is that we get too much traffic," he says.

Jim Pulsipher, a partner at accounting firm Grant Thornton who specializes in financial services, says banks are certain to test other alternatives to branches. "Anything is eligible as long as they feel there's a high level of traffic and accessibility," he said.

But of course, Pulsipher added, the true test to any of these minibranches, at least from the banks' perspective, will be whether they are profitable. So the question becomes: "Is it adding anything to the customer base, or is it simply keeping existing customers they have?"

In the Unocal minibranch, the answer seems pretty clear.

Off Added Interest

Banks have found one pleasant surprise in the mushrooming growth of in-store minibranches: They are much less likely to be robbed than traditional branches.

In bank-robbery-crazy California, that's no small matter. Wells Fargo, the industry's leader in developing supermarket branches, says it was robbed 586 times last year, but only 22 of the heists occurred at its in-store outlets.

At the end of last year, 519 of Wells Fargo's 1,135 branches in California were in grocery stores, and the figure is growing monthly.

Times staff writer Don Lee can be reached via e-mail at or by fax at (213) 237-7837.

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