Chase Manhattan Corp. will open full service, supermarket-based branches in central Texas in a bid to woo customers away from other banks in the region.

Five in-store branches are slated to open in the next two months in Austin and San Antonio -- markets identified by the $357 billion-asset New York bank as fast-growing population centers. The branches will be located in H-E-B stores. H-E-B is a Kerrville, Tex.-based food chain with 269 locations in the state and in nearby communities in Louisiana and Mexico.

Chase has 120 branches in Texas, but only eight in Austin and four in San Antonio. "We want to reach out to these markets," said David Jacobs, a Chase senior vice president who is in charge of the project.

The bank ranks third in deposit share in the state -- with 8.83% of the market -- behind Charlotte, N.C.-based Bank of America Corp., which has 14.43% of the state's deposits, and Chicago-based Bank One Corp., which has a 9.01% share, according to American Banker data.

If the new H-E-B locations prove profitable, Chase may open as many as 45 in-store branches in the state over the next three years, Mr. Jacobs said.

In-store branches have grown increasingly popular in the South and West as banks seek growth without the high expense of buying or building traditional branches. "We can build (the in-store branches) faster, and they are not as costly," Mr. Jacobs said. "We will be able to go quickly into markets where we don't enjoy a presence."

Chase has some experience with remote banking in the state. It has 76 automated teller machines in convenience stores owned by Exxon Corp. and at the oil company's gas stations throughout Texas. Thirteen of those locations are in Austin, and four are in San Antonio.

The supermarket branches, measuring 350 to 600 square feet, will go beyond electronic delivery and offer a full array of products and services, Mr. Jacobs said. Eventually, staff members at the locations will be licensed to sell insurance and investment products, he said. Initially, they will make referrals to a dedicated financial consultant.

"We are not going in there just to do transactions," Mr. Jacobs said.

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