Wayside Commons in Burlington reportedly will be the home of one of Citibank’s planned “investment centers” in Massachusetts. The centers would mark the first banking presence in the Bay State by Citigroup Inc., the nation’s largest financial services company.

In what appears to be an opening salvo for Citigroup Inc. coming into Massachusetts, the New-York-based operation is said to be shopping in the Boston area for branch locations. It already has auto loan and mortgage locations in Massachusetts, but the nation’s largest financial services company has never had a banking presence here.

The move to the area by Citibank, the retail banking arm of Citigroup, would mean another big player on the Bay State’s already competitive banking scene.

The plan is to open at several locations some are calling “investment centers,” including one reportedly slated to move into Burlington’s Wayside Commons, a new lifestyle center that is currently under construction near the Burlington Mall and Route 128.

Details of the lease for 8,000 square feet of commercial space were being finalized earlier this month, according to a source close to the transaction. It is unclear if an agreement has been reached. Boston-based Fidelity Investments also has considered the Burlington site but decided against it, according to sources.

Reportedly, Citibank has hired Meredith & Grew, a real estate services firm in Boston, to help the financial institution hunt for multiple Massachusetts locations. According to one source, Citibank is looking for about 10 locations in its initial search.

“It’s good to see them coming in,” said one Boston-area retail broker who has been in touch with Citigroup about its plan to make inroads into Massachusetts.

The broker said Citigroup is focusing on urban-area locations such as Brookline, Newton and Cambridge, as well as along Route 128.

Meredith & Grew could not be reached for comment, and Citibank did not return phone calls regarding plans to open new branches in Massachusetts.

‘A Question of Time’
The question is whether the limited amount of locations will be sufficient for Citibank to actually become a major player in the local market, said Jim Jones, president of First Wellesley Consulting Group.

“To move into a highly competitive market really takes a lot of guts,” he noted.

But Jones, who follows local and national financial trends, said he is not sure 10 locations are enough to draw a substantial amount of business from the banks that already have a presence in the commonwealth. If the bank stops at 10, it could be in trouble, he said.

“The largest challenge for them is going to be customer acquisition. I just think the Massachusetts consumers will continue to view them as an out-of-reach bank,” said Jones. “Consumers have a ton of choices and businesses have a ton of choices.”

Jones said people prefer banking that is more convenient and accessible than what can be offered through 10 branches.

On a national level, however, Citibank has made attempts to be more accessible to existing customers while trying to attract new ones. On March 29, Citigroup launched Citibank Direct, an Internet bank offering high-interest savings accounts and other products. This month, it announced a nationwide agreement with 7-Eleven to put its name on ATMs inside 5,500 convenience stores.

Jones said teaming up with the convenience store chain was a clever move, but he is not convinced it will be enough to attract high levels of business from Bay State consumers.

“If I don’t need a Slurpee, where can I deposit my check?” said Jones, who added that at first glance it appears Citibank has plans to make a “modest” investment in the area. “The acquisition strategy is really the only strategy that is successful.”

Bank of America – the nation’s second-largest bank in terms of assets, behind Citigroup – entered Massachusetts through its acquisition of FleetBoston Financial Corp., which was finalized in 2004. When the Charlotte, N.C.-based bank officially opened locally, it instantly had a strong presence. Jones said in his experience, that kind of approach has a much higher success rate. But he admitted that finding such a large regional player to buy is not easy since they are few and far between.

John Carusone, president of the Hartford, Conn.-based Bank Analysis Center, said he is not convinced there will not be an acquisition involved as Citibank moves into the area.

“I wouldn’t rule out the possibility of an acquisition by Citibank in Massachusetts,” noted Carusone.

Carusone said it is important for national banks to cover their ground. New England seemed to have been overlooked for a period, but once one major player moved in, it was sure to attract competition, he said. Carusone added that he believes entering Massachusetts was something Citibank had in its long-term agenda, and watching another major competitor move in probably moved its strategy for the area to the front burner.

“It was inevitable, and even though the initial steps are modest, they are very symbolic,” said Carusone. “The acquisition of Fleet by Bank of America was a catalyst. It was only a question of time before both institutions focused on this region.”

Carusone also said Citibank has recently taken similar steps in Connecticut, announcing a plan to open a couple of full-service institutions in the New Haven area.

Citibank leaders have acknowledged there is a plan to continue adding to its 900 retail banking branches that currently exist.

“During the [fourth] quarter [of 2005], we took several actions to strengthen our leading franchises. We continued to expand our distribution network to reach more customers globally by opening 207 new retail bank and consumer finance branches Â… As we move in to 2006, we see significant opportunities to grow our franchises. We are already increasing the pace of our distribution expansion and working to provide our customers with a more integrated set of products and services, yet a more simplified experience,” said Charles Prince, chief executive officer of Citigroup, in a January press release.

Bob Sihler, a senior licensing analyst at the Office of the Comptroller of the Currency, said there are no pending applications for Citigroup at present. However, larger institutions often file for branch approvals when the process is already well under way, he said. There is a 30-day comment period after an application is filed before the OCC makes a decision. Sihler said larger banks sometimes will wait until the last minute, in some cases filing as close to 35 days before they plan to open.