dense retail network, Fleet Financial Group is testing a careful approach to cutting back on the brick and mortar. Like many of its peers, the Boston-based superregional has long assumed that it can get by with fewer branches, said senior vice president Robert B. Hedges, who is head of retail banking. But Fleet did not want to act rashly and without good data on the potential consequences, he said. The $100 billion-asset banking company called in consultants from Dean & Co. of Vienna, Va., and selected the central Connecticut market for a trial run at redesigning the branch system. That market, extending about 30 miles out from Hartford, the state capital, was a good choice for several reasons, said Ware Adams, a consultant who worked on the project. "It's a big market, it's very close to Fleet's heart, lots of the bank's senior managers live there, and it's one they know," he said. Fleet has 85 branches in central Connecticut, nearly 100,000 customers there, and 30% of the deposits. (Key competitors are Webster Financial Corp. of Waterbury, Conn., and Charlotte, N.C.-based First Union Corp.) In addition, the area has plenty of "traffic flow" and lots of shopping malls, which Fleet also wanted to study. The project began a year ago, and initial analysis showed that some customers were using as many as six Fleet branches, Mr. Hedges said. This indicated that some branches could be shuttered without completely alienating customers. Beyond that, the bank could delve deeper, looking for branches that though apparently profitable were becoming obsolete. Many customers who had opened checking accounts years ago in some of the older, larger, centrally located branches had stopped visiting them for regular transactions. These branches had high deposit volumes, so they continued to take the credit for accounts opened there. But the costs of providing services were borne elsewhere. "People change jobs, people move," Mr. Hedges said. "There are significant commutation patterns that needed to be studied. "What a lot of banks are hooked on is booking deposits and revenues as opposed to transactions. There is a disconnect." Fleet also wanted to know where people did their shopping. New shopping centers and malls had created opportunities that the bank had not exploited for placing automated teller machines and full-service branches . "We need to fish where the fish are and go to the locations where the traffic and retail growth are," Mr. Hedges said. As a result, Fleet's office in Cromwell, Conn., is moving to a busier site. The study has led to the closing of six branches so far and plans to close two more next week and four in December. Of the 12 branches affected, two are within Hartford's city limits and the rest are suburban or rural, said Fleet spokesman James Schepker. The closings will save Fleet as much as $400,000 each per year, Mr. Hedges calculated. But the study has also prompted a $2.5 million investment to redesign some of the remaining branches to handle more customers, partly by maintaining longer hours, and to install five off- premises ATMs. The 71 people employed in the to-be-closed branches have all been offered new jobs in the Hartford area, Mr. Hedges said. It is too early to tell if the closings will anger some customers enough to switch banks. "We've received a handful of complaints in letters and phone calls," Mr. Hedges said, "but nothing compared to what you'd get in a merger." Of course, this project was engineered to avoid the common post-merger decisions to "shutter the branch with the shortest lease," he added. Henry C. Dickson, an analyst at Salomon Smith Barney, said branches make up 30% to 35% of a bank's cost base. "Customers are using branches differently, or not at all," he said. The trick is to offer "the best value proposition for customers and get the best returns on it, too."

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