It’s a good time for retail banking, and banks across the country – including many in Connecticut – are taking advantage of high profits to grow through de novo branching.

Since the beginning of 2004, eight banks have opened or announced 17 new branches across the state, according to bank executives and the state Department of Banking’s news bulletin.

“That’s a national trend,” said American Bankers Association spokeswoman Tracey Mills.

Banks across the country have been focusing more on customers and have been trying to give them what they want, Mills said.

“Banks are following consumer trends,” she said. “Consumers have been driving the economy. Retail banking has been a very hot trend and they’re competing very heavily for customers.”

Bridgeport-based People’s Bank is one of the Connecticut institutions that have been focusing on what makes sense for customers. The bank has six new branches opening this year, said spokesman Brent DiGiorgio. A branch opened in late April in East Lyme and five more new branches are planned for Greenwich, Stamford, Ridgefield, West Haven and Rocky Hill. The number of openings is typical of how many branches People’s opens in a year, DiGiorgio said.

“Banks are always looking at their branch networks,” he said.

People’s decides where to open new branches after investigating traffic patterns and where the customers live, DiGiorgio said. People’s is not closing any branches this year, but sometimes the location of existing branches does not make sense and new branches are necessary, he said.

The bank – which has 147 branches across the state, 56 of which are in Fairfield County – also has expressed interest in expanding to neighboring Westchester County in New York state and into southern Massachusetts, DiGiorgio said.

‘Future Planning’

Many banks that are opening de novo branches across the country have found that despite apparent increases in using online banking, customers want the presence of brick-and-mortar facilities nearby, Mills said. As the products that banks offer become increasingly diverse and complicated, customers enjoy being able to talk to bank employees face to face and like the employees to explain the products, she said.

The bankers themselves love their branches, Mills said.

“Banks like to have the branch because it helps them create that relationship with the customers,” she said.

When banks decide where to open new branches, they often take into account other businesses in an area and the foot traffic there, she said.

People’s has taken into account its customers’ convenience, DiGiorgio said. The bank has branches in Stop & Shop supermarkets all over the state.

People’s apparently has achieved its goal of providing its customers with the most convenient locations possible, but it soon will face another challenge on its home turf.

Waterbury-based Webster Bank, which is probably People’s biggest competition in Connecticut, has been opening de novo branches across Fairfield County. Webster has about 100 branches throughout the state and already has 19 branches in the county. The bank’s Monroe branch opened earlier this week and Webster plans to open two more branches, in Bridgeport and Norwalk, by the end of the year, according to a Webster press release. The bank also plans to open between six and eight additional de novo branches in Fairfield County over the next two to three years.

Webster began opening branches in Fairfield County in February 2002 with branches in Stamford, Darien and Danbury, according to the press release. Webster also expanded into Westchester County with a new branch that opened on May 18. The bank plans to add 12 to 15 new branches in Westchester County over the next few years, according to the release.

People’s isn’t worried, DiGiorgio said.

“We’re the market leader in Fairfield County,” he said. “We welcome the competition.”

Connecticut’s big banks aren’t the only ones extending their reach. Six community banks across the state have opened or announced de novo branches since the beginning of the year, according to the Department of Banking news bulletin.

The Dime Savings Bank in Norwich opened a branch in New London in February and opened a permanent branch in Westerly, R.I., earlier this month. The permanent branch took the place of a temporary branch the bank opened in June 2003, according to bank President Jim Cronin.

The expansion had been in the nine-branch, $470 million, 150-year-old bank’s plans for some time, Cronin said.

The state of the banking industry in Connecticut, where the acquisition of FleetBoston Financial Corp. by Bank of America and the consolidation of Tolland Bank, the Savings Bank of Manchester and New Haven Savings Bank have changed the landscape, provides a good opportunity to expand, Cronin said.

“As other banks have been consolidating, we’ve been expanding,” he said.

Studies have shown that acquired banks can lose as much as 15 percent of their deposit base after transition, DiGiorgio said, which creates an atmosphere where other banks try to capture those customers.

Dime Savings has opened five new branches in the last six years, Cronin said.

Danbury-based Union Savings Bank also has been expanding. The bank opened two new branches last year and intends to open branches in Southbury and Bethel in the last quarter of 2004, said Executive Vice President and Chief Operating Officer John Kline. The $1.4 billion bank has 18 branches that reach north to Sharon and south to Ridgefield.

“It’s one of those things that’s consistent with our growth strategy,” Kline said. “All part of future planning.”

Kline doesn’t expect fallout from Bank of America’s acquisition of Fleet to happen for a while. But when it does, he said, Union wants to be in a position that will make it convenient for customers seeking a new bank.

Still, one of the main reasons Union is expanding is to keep up good relationships with its current customers, Kline said.

“We place very high on the scale of good customer service,” he said.