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Staff Reporter

Banking at a gas station?

L.A.-area bankers are offering customers home loans and free checking accounts where they buy groceries, make photocopies and now, even where they fuel-up their cars.

Bank of America has opened a two-employee sales unit at a Unocal FastBreak convenience store in Ontario. It’s the first of its kind, and BofA plans to open up more if this one is successful.

“We have employees who work at the site, who are available to talk to customers, open accounts and provide product information,” said Lisa Prescott, executive vice president for the L.A. region.

Most banks are looking to open branches in a variety of retail settings as an alternative to traditional branches.

“They offer greater convenience, a cheaper means of product distribution and access to a greater customer base,” said Joe Morford, an analyst with Alex. Brown Inc., who noted that an in-store branch can cost two-thirds less than a traditional branch.

The key to determining where to put these alternative branches is finding places with a large volume of customers who visit on a regular basis, said Morford.

That reasoning led to the first, and still most common, retail setting for in-store branches grocery stores.

Wells Fargo Bank, which is making one of the industry’s most aggressive moves into this area, started out with four supermarket branches in 1990 and now has 730, most of which are in Vons stores, said Joe Laughlin, senior vice president of the Wells Fargo’s in-store banking group.

“The in-store branches have been very successful,” said Laughlin. “Roughly speaking, they have three times the sales productivity per Wells Fargo agent than at a traditional branch and see very high transaction volumes.”

But supermarkets are far from the only “co-marketing partner” for banking institutions.

Glendale Federal Bank officials considered a number of potential partners, including coffee houses and book stores, before eventually deciding on Kinko’s Copy Stores, said Bill Birch, Glendale Federal’s executive vice president of retail banking.

The bank opened a full-service branch at a Kinko’s in Simi Valley on Feb. 14 the first of its kind and now plans to open 20 more over the next 18 months.

“Kinko’s fit perfectly with our business strategy a strategy that targets consumers and the small-business market. Kinko’s customers’ profile is right along those lines,” said Birch.

Glendale Federal finds Kinko’s a more appealing partner than grocery stores, Birch said. “The average Kinko’s customer spends 20 to 25 minutes in the store and about half of that time is down time time spent waiting for a project which is a prime opportunity for the bank to sit down with the customer,” Birch said.

That’s a far more promising scenario than that found in a grocery store, Birch said, “where you want to get in and get out.”

Banks are not just seeking new alternative places to locate their branches, they are also inviting businesses into their existing traditional branches.

In February, Home Savings of America announced that Diedrich Coffee would open coffeehouses in several of its larger branches. “The issue for us is that we have a large number of large branches an abundance of real estate,” said Carl Forsythe, Home Savings executive vice president of personal financial services. “As a result, we could always accommodate other partners to draw more traffic into our existing facilities.”

So, what’s next?

Bank officials say they are in discussions with various retailers to open branches in their outlets or bring retailers into their existing branches.

Wells Fargo, for example, announced last summer that Thrifty Payless would open a pharmacy and small drug store in five of its branches. The project is currently on hold but will likely happen, according to Wells Fargo.

Home Savings’ Forsythe said his employer is considering opening branches in office supply stores that cater to small businesses and in home improvement centers a logical setting to have discussions about home loans or home improvement loans.

“We talk about the possbilities every day,” said Forsythe.

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