CITIZENS Financial Group the US& bank in which Bank of Ireland has a 23.5 per cent interest is to open 22 new supermarket branches. In a deal with Star Markets, the bank will significantly increase its presence in the eastern part of the state of Massachusetts.
Citizens will open 11 new supermarket branches in the next seven `months, replacing its rival Bank Boston. A further 11 branches will be opened within the next year.
On acquisitions, Citizens has a target list of a dozen suitable banks' in a $500 million to $1 billion asset range in the state of Connecticut at the New York end and around Hartford. It would like to acquire operations on the Route 128 around the Boston area, which is densely populated. Acquisition criteria include that the target should not be more than 100 miles from its Providence Rhode Island headquarters and should have no bad debts.
Citizens chairman and chief executive, Mr Larry Fish, said the deal with Stargaze the bank an important growth opportunity in a market, where acquisitions have become expensive.
Supermarket branches were cheaper than building new branches and suitable acquisitions were currently not available at the right price, Mr Fish said.
Citizens began the move into this alternative service delivery channel two and a half years ago. By the end of the year it will have 50 branches in supermarkets throughout New England. Some 30 per cent of its Massachusetts business will be done through supermarket branches.
Citizens already has 18 branches in Shaw supermarkets and six in Shop'N'Save supermarkets.
There are two types of supermarket branch with five to six full-time equivalent employees and the express branch, which is a sales outlet, with no tellers.
Citizens will pay rent to Star for the space and will pay marketing fees. But the cost of setting up and operating the supermarket branches is significantly less than that involved for a traditional branch typically 20 to 50 per cent less.
The expansion of its supermarket presence is Citizens' response to the need to grow in a market where acquisitions have become very costly. Targeting an increase in total assets to $20 billion (£13.28 billion) from $ 16 billion by the year 2000, the ban& plans to grow by increasing its products and services for targeted `customer groups and by increasing the number of products and services beach customer takes.
