Norwest Corp. has a deal that could give it as many as 22 new supermarket branches-nearly its current total.

The deal is with Rainbow Foods, a warehouse-style grocer based, like Norwest, in Minneapolis.

Norwest now has 28 supermarket banks in eight states, but the agreement with Rainbow is its biggest.

The $83.6 billion-asset banking company has already opened one Rainbow branch, this month, and plans to open four more by yearend in supermarkets in the Minneapolis-St. Paul suburbs.

Norwest opened its first supermarket branch seven years ago in Sioux Falls, S.D.

The company has an option to open as many as 22 Rainbow locations. Rainbow has 27 stores, four of which have non-Norwest bank branches. Rainbow expects to add stores in coming years, said a Norwest spokeswoman.

Norwest is also "in discussion" with other grocery chains in other markets, said Deborah Moore, senior vice president and head of alternative delivery systems at Norwest Bank Minnesota.

Such partnerships are becoming increasingly common. In the Twin Cities, First Bank System Inc. has locations in 10 Byerly's stores and two Rainbow stores. TCF Financial Corp. has 26 branches in Cub Foods Stores.

"Companies that have formed alliances with good partners have been able to grow market share and enter new markets relatively cheaply," said Frances B. Henry, vice president and regional manager at Cincinnati's Fifth Third Bancorp., a pioneer in supermarket banking.

Ms. Henry, whose company has opened 98 supermarket locations over the past 11 years, said the challenge for banks just now getting into the business is finding grocery store partners. Many banks have already forged exclusive agreements with supermarket chains.

Before Norwest signed its agreement, Ms. Moore said, she studied the market, watched her competitors, and monitored the success of two pilot Norwest supermarket locations at Super Valu stores in Twin Cities suburbs. The first opened one and a half years ago, and the other was opened eight months ago.

The move to increase the number of supermarket locations is to allow Norwest to enter growing suburban locations without incurring the high overhead of traditional branches, Ms. Moore said.

Unlike many other companies that have set aggressive schedules for opening in-store banks, Norwest plans to enter gradually and has no immediate plans to replace traditional branches with new supermarket locations.

"We'd be less inclined to make snap judgments to close traditional branches," said Ms. Moore.

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