Finding bankers between the broccoli and the bread aisle was only the beginning.

In their relentless effort to go where the customer is, banks are now beating a path to corporate headquarters and hospitals.

These nontraditional branch locations make sense, industry observers say, because they let banks set up shop in areas with captive audiences of thousands of employees. And like supermarket locations, the branches are less expensive to build.

"It's low overhead, and that's the driving point," said Howard Lee, senior consultant with CBM Group Inc.

Despite predictions that the branch system is dead, the number of bank branches is increasing. But about two-thirds of the additions differ from old-fashioned branches in how and where they operate.

Star Banc Corp. said last month it would open nine bank offices in Procter & Gamble Co.'s research centers in the Cincinnati area. The consumer products company, which has 14,000 employees in Cincinnati, wanted to add banks to its corporate campuses, which already have convenience stores and dry cleaners. Star Banc already had one branch at a Procter & Gamble site.

"This is a customer base that would be very attractive to any bank," said Kathy Beechem, Star senior vice president and regional manager of consumer banking. "This fits right into our strategy of nontraditional delivery. This is not your traditional brick and mortar branch."

Rival bankers said such branches are not easy to come by and, once opened, need extra attention. First, a company has to invite the bank in, and then there's no guarantee the employees will use the new branch.

"The challenge tends to be the marketing strategy," said Michael Barnum, senior vice president of retail delivery for KeyCorp. Mr. Barnum said KeyCorp has a small office at a General Electric site in Cleveland, but added that such locations can be restrictive. "We have not seen, nor do we think there will be, a strong business opportunity," he said.

Some corporate locations can be profitable, said Kevin Kabat, Old Kent Financial Corp.'s executive vice president for retail administration and corporate technology. Old Kent operates two suburban Chicago offices, at corporate headquarters for Sears Roebuck & Co. and Allstate Financial Corp. Each campus has about 4,500 employees.

Although Old Kent inherited each office through acquisition, it discovered that the offices held promise for revenue growth. In fact, Mr. Kabat said, he has talked to other Chicago companies about placing branches in their offices.

In many cases, banks are being invited into corporate sites because of existing relationships with the companies. Such was the case with Star Banc, which also provides cashier services for Procter & Gamble. Wachovia Corp. had an automated teller machine at North Carolina Baptist Hospital before it opened an office there five years ago. The hospital and its school constitute the largest employer in Winston-Salem, with about 9,000 employees.

Banks have also found opportunities catering to retirement centers. Most of the large Michigan and Ohio banks have at least part-time offices in retirement communities, where they primarily serve trust and investment customers as well as take deposits and even help plan travel.

TCF Financial Corp. is among a number of banks that are establishing relationships with universities. The Minneapolis thrift plans to open offices later this year at the University of Northern Illinois in De Kalb and at Saginaw Valley State University in University Center, Mich.

The strategy of partnering with companies or universities is a good idea, say observers. It brings banks closer to the customer, a major focus in an era of souped-up retail banking.

Pennsylvania's Sovereign Bancorp even has a recreational vehicle, dubbed the "mobile bank," which is driven to retirement centers a couple of times a week to drum up business. Sovereign plans to add an automated teller machine to its moving bank. And eventually, the bank hopes to use the mobile bank to serve other large employers in the Reading, Pa., area.

"I think we're seeing an evolution," said William Kiefaber, a retail strategist for Columbus, Ohio-based Retail Planning Associates. "Supermarket banking may have started this move toward financial retailing. Now banks are moving to where they have the best opportunity to serve customers."

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