Chase Bank is planning to expand its branch network by at least 25 locations in Northern California, a push that could create hundreds of new jobs in the region this year.

The goal for Chase is to draw closer to market leaders Bank of America and Wells Fargo Bank.

That could take a while, though. Chase ranks fourth in the Bay Area, with a market share of just 4.6 percent, based on deposits, according to the latest figures from the Federal Deposit Insurance Corp.

"When we look at our market share and the number of our branches, we definitely see room for expansion," said Don Bausley, manager of the San Francisco and East Bay markets for Chase.

Bay Area market leader Bank of America claims a 37.8 percent share of deposits, while Wells Fargo, No. 2 in the region, has a 21.9 percent share. Even third-ranked Citibank, with a 6.8 percent market share, holds a comfortable lead over Chase.

Chase plans to open 25 to 30 new branches in the Bay Area this year after opening 29 last year.

"We are looking at every single county for expansion," said Chase spokeswoman Eileen Leveckis.

The focus this year will be expansions in the East Bay, including six to eight new branches in Alameda County, as well as more branches in San Francisco.

The banking giant, though, also intends to widen its reach in the South Bay, where it is planning two or three more branches, according to Leveckis.

About 250 to 300 jobs could be created this year as a result of Chase's expansion program. "With each branch opening, we create 10 to 12 new jobs," Leveckis said.

Ken Thomas, a Miami-based independent bank analyst and operator of the BranchLocation.com website, said Chase's expansion makes sense because, "branches are ultimately the best way to attract and retain customers."

Yet many banks in recent years have taken the opposite approach, he noted.

"With all the mobile transactions (and) electronic banking, a lot of banks are saying they don't need branches any more," Thomas said. "I totally agree with Chase's strategy."

But other analysts say Chase faces an uphill climb.

"The problem is Wells Fargo and Bank of America have been firmly entrenched in the market for years," said Michael Yoshikami," chief investment strategist with Walnut Creek-based YCMNet Advisors. "It will take a long time for Chase to be able to take market share from the other banks. And when I say a long time, it could be 10 years before they make meaningful progress."

Chase also will be under pressure to parlay new branches into more than just repositories for deposits and a place to greet customers. The bank will have to find ways to get the most of their basic clientele.

"Brick-and-mortar costs are very high," said Walter Mix, a director and financial services practice leader with Berkeley Research Group, an Emeryville-based consulting firm. "In order to justify that, you would have to do a lot of cross-selling and increase wallet share. Otherwise it would be hard to make the numbers work."

Chase will also face challenges in prying loose customers from other banks, according to Yoshikami.

"No matter how many people complain about their bank, ultimately there is effort involved in switching banks," he said. "People really don't like having to make that effort."

Still, Thomas says Chase has a good chance to win with its expansion gambit.

"People have worked hard to earn their money, and they want personal service," Thomas said. "People still want the branch. They want to go somewhere and know a person is there."

Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos.

Bank market share
Ranking of banks by Bay Area market share, based on the dollar value of deposits.
Bank of
America: 35.2%
Wells Fargo
Bank: 21.9%
Citibank: 6.8%
Chase Bank: 4.6%
Silicon Valley
Bank: 4.1%
First Republic Bank: 3.4%
Bank of
the West: 3.4%
Union Bank: 2.3%
Comerica
Bank: 1.8%
U.S. Bank: 1.8%
Source: Federal Deposit Insurance Corp.