US Bancorp Goes Ga-Ga Over In-Store Branches

"We have fallen in love with it," says Richard K. Davis, chairman, president and chief executive of US Bancorp.

"It" is in-store and on-site banking, and US Bancorp is beefing up its presence in this retail market big time. By the end of 2008, US Bancorp will have 632 in-store and on-site locations. By the end of 2009 that number will jump to 738, and to 798 the year following -- a 28.1% increase from its number of locations at the end of last quarter.

These locations comprise, in part, ATMs in grocery stores and full-service branches at supermarkets. US Bancorp's most notable in-store deal in recent weeks was with Zions Bancorp. US Bancorp assumed Zions's leases in 49 Smith's Food & Drug Stores, a division of The Kroger Co. The deal put US Bank in 21 in Utah. US Bancorp replaces Nevada State Bank in 28 new Smith's locations in the Silver State.

In many ways, US Bancorp is gravitating away from traditional banking. In addition to this in-store banking effort, US Bancorp continues to beef up its services, trust and payments businesses. In fact, Davis said this week that the company may use the $2.2 billion of TARP funds it will receive to make acquisitions in services, trust and/or payments.

Tags: branches, in-store, nevada, retail, us-bancorp, utah

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Permalink Reply by Victoria Fierson on November 14, 2008 at 10:19am: I think banks' presence in the retail sector is going to become very typical soon. It's a way of restoring consumer confidence. By including branches in popular retail places it gives the customer a sense of security, "Look we're not troubled, we have branches everywhere, we're secure and you should bank with us." I think it's smart and I think it'll work. Convenience is also a huge plus.; ▶ Reply to This

Permalink Reply by Neal Kreitman on November 14, 2008 at 10:44am: In-store branches sound convenient but are they profitable for the bank, It is very difficult to open new accounts and discuss personal finance at one of these branches. Many do not have private rooms. I begin to think that an in-store branch is really no different than an ATM machine.; ▶ Reply to This

Permalink Reply by JJ Hornblass on November 24, 2008 at 9:09am: Neal, thanks for your comment. In-store branches may not, in fact, be different than ATM machines -- but that's not necessarily a bad thing. I haven't seen any recent data, but when I last checked ATM machines were quite profitable for banks. That said, in-store branches have come a long way, in the sense that they seem to be generally better accepted today by consumers. U.S. Bancorp wouldn't be committing to them if they were not profitable.

Neal, have you seen any data to the contrary?; ▶ Reply to This