First Chicago NBD Corp., looking to expand its already sizable retail base here, has named an executive to focus on supermarket banking.

Robert Greco, senior vice president in charge of Illinois supermarket banking, said First Chicago will add at least 10 supermarket branches in the city and its sprawling suburbs by yearend.

The move comes at a time when BankAmerica Corp. is test-marketing its own supermarket banks in Illinois.

The $122 billion-asset First Chicago has agreements with two grocery store chains, Dominick's and Byerly's, said Mr. Greco.

BankAmerica, which operates its branches as Bank of America Savings, has an arrangement with Jewel-Osco, the largest grocery chain in Chicago.

Mr. Greco said the average cost to open a supermarket branch is $200,000, compared with about $1 million for a traditional branch. First Chicago, which merged with NBD in November, is examining Chicago branches for redundancy. "The old way (of branching) is a very expensive route," said Verne Istock, chief executive of First Chicago NBD. Mr. Istock said First Chicago will likely expand its presence among supermarkets in Indiana and Michigan, too. However, the company is focusing on the Chicago market first.

First Chicago has only been in the supermarket banking business since 1993. Its 13 supermarket branches are now only a small part of a 130-branch network, but company officials see them as a huge growth area.

The partnership with Dominick's, Chicago's second-largest grocery chain, could give First Chicago a vehicle for rapid growth.

Other companies are finding grocery partners as well. Minneapolis-based TCF Financial Corp. has an agreement with Cub Foods in Illinois, Minnesota, and Wisconsin. TCF has 11 supermarket branches at Cub stores in the Chicago area. St. Paul Bancorp has 17 supermarket branches, mostly in Omni Superstores in Chicago.

The partnerships between banks and grocery chains are becoming more common, said Rockwell F. Clancy II, executive vice president of the Bank Administration Institute. One attraction for banks is that store names are often better known to customers than bank names.

BankAmerica, which doesn't have high brand recognition in Chicago, can leverage the Jewel-Osco name, Mr. Clancy said.

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