As head of branches and ATMs at Wachovia Corp., Karen Curtin spends a lot of time studying market... Banks renew focus on branc
As head of branches and ATMs at Wachovia Corp., Karen Curtin spends a lot of time studying market-research reports. But sometimes she needs to go out and see the dirt.
Curtin and two other top executives jetted from North Carolina to New York to Maryland this month in a tour of new Wachovia locations. They visited branches under construction and hunted sites for new ones.
A few years ago, Wachovia executives might not have made such a trip. The Charlotte, N.C., company was too busy assembling a hodgepodge of branches through a flurry of mergers.
Now, Wachovia and other banks, such as Bank of America Corp., also based in Charlotte, are taking a more analytical approach to where they put their branches. They are building new ones in hot suburbs, closing offices in slow-growing neighborhoods, and refurbishing aging locations.
Besides the Comptroller of the Currency's numbers, Wachovia said it planned to open 14 more branches this year. It expects to keep up a similar pace of closures and openings next year.
The notices show that the nation's No. 4 bank by assets is growing mostly in hot markets such as Texas and New York City, while cutting back in states such as Pennsylvania and keeping its totals about the same in the Carolinas. It is adding more branches in low- to moderate-income areas than it is closing.
"We're heavily branched in this region," Wachovia spokeswoman Barbara Nate said. "Most of these closures represent situations where we consolidated two branches, typically within a one- to two-mile radius of each other. What that allows us to do is focus on the existing branch network. Refurbishment of existing branches is important, particularly to us in Pennsylvania, given the age of our branches."
Wachovia spent $26.4 million refurbishing 48 offices in Pennsylvania and Delaware this year and last. It plans to open a branch next month in Haverford.
Bank of America, which has about 5,800 branches, planned to open 186 locations over the same period while closing 165, according to the Office of the Comptroller of the Currency.
Branches are critical to banks as they look to increase revenue in an uncertain economy. Studies show that customers often choose banks based on how close they are to their homes and businesses. Wachovia has found that about 85 percent of new accounts are opened at branches.
After dismissing the importance of branches in the dot-com days of the 1990s, banks are in the midst of a major branch expansion. In the year ended June 30, federally insured institutions increased their offices 3 percent to 91,407, according to a report issued last month by the Federal Deposit Insurance Corp.
Still, experts say the boom is beginning to wane as banks face pressure to squeeze more profit from their locations. That is why banks are chasing new, faster-growing markets, said Arnold Danielson, a Rockville, Md.-based banking consultant.
To get the most out of their locations, Wachovia is developing specialized branches. For example, urban branches are designed to handle heavier customer traffic. New suburban locations are flexible to allow growth in offices for investment and mortgage specialists.
As it closes branches, Wachovia is trying to dampen the disruption for customers. In the late 1990s, predecessor First Union Corp. faced a backlash when it slashed branches after mergers and steered customers to call centers with its "Future Bank" initiative.
With its closure notices, Wachovia sends customers maps of nearby locations. After recent mergers, it has even kept some branches virtually side by side.
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