One of the country's largest banks is expanding to Southwest Riverside County from its home turf in the southeastern United States, becoming the latest East Coast bank to open branches in fast-growing areas of Southern California.

Wachovia, the fifth-largest commercial bank in the U.S., won federal approval to open two branches in Murrieta and one in French Valley, according to a bulletin from the Treasury Department earlier this month. A spokeswoman for the Charlotte, N.C.-based bank said it hadn't yet decided exactly when and where to open the three locations.

Wachovia has crept into the market since early last year with acquisitions of two mortgage companies and an automotive lender, but has 20 retail banking branches in the state, including one on Rancho California Road in Temecula.

Manhattan-based Citibank, whose presence in California is the state's fourth-largest, has also continued to expand, with new branches in Oceanside and Mira Mesa and others planned in Rancho Cucamonga and Claremont. Parent company Citigroup, a diversified financial-services firm whose $150 billion revenue last year already dwarfs that of other U.S. banking companies, began last year to install or rebrand some 5,000 ATMs in 7-Eleven convenience stores nationwide.

Kevin Fitzsimmons, a financial analyst with Sandler O'Neill & Partners, said Wachovia's moves in California make sense, given the relatively strong growth in the state's population and economy.

"You can expect a number of new branches across the state," Fitzsimmons said. "The bulk of the branches they're going to acquire will be in California."

The two banks' moves follow a series of acquisitions that have swept California banks into ever-larger conglomerates in the last decade. San Francisco-based Bank of America was acquired by NationsBank, also of Charlotte, in 1998. Citibank burst onto the California scene in 2002 with the acquisition of Cal Fed and its locations in Sun City, Temecula and Vista.

Both banks are paying above-market interest rates to attract deposits. Wachovia, for example, is paying Southern California depositors 5.4 percent on six-month certificates of deposit, about a point higher than most other banks. Citibank is offering rates of about 5 percent on certain savings accounts.

While the implosion of the subprime mortgage market has devastated several home lenders and bruised hedge funds that invested in mortgage-backed bonds, Fitzsimmons said Wachovia has done very little business in that market and is thus in a strong position to expand. Wachovia's revenue grew by 30 percent to $47 billion in revenue last year, the sixth-highest growth rate among the nation's 30 largest banks, according to an annual analysis by Fortune magazine.

Fitzsimmons said California appears attractive to both Wachovia and Citibank.

"It happens to be where the growth is," he said.

- Contact staff writer Chris Bagley at (951) 676-4315, Ext. 2615, or cbagley@californian.com.