After losing hard-fought battles in Oklahoma and California, Wal-Mart Stores Inc. is bringing its banking to Utah.

Wal-Mart on Monday afternoon submitted its application to the Utah Department of Financial Institutions to establish an industrial bank here.

And while critics worry the mammoth retailer will use its market heft to drive smaller banks and credit unions out of business, Wal-Mart insists its bank will be a small, back-office affair.

Wal-Mart Bank's sole function will be to process credit card, debit card and electronic check transactions from its retail locations, according to the bank's president and chief executive, Alan Whitchurch.

The company currently uses a third-party processor for the transactions. Bringing the operation in-house will save Wal-Mart a "significant" amount of money every year, Whitchurch said. He declined to specify how much money would be saved.

"It will be a significant savings when you add up the fractional savings on millions and hundreds of millions of transactions that can be paid to Wal-Mart Bank instead of a money center bank," said Whitchurch, a University of Utah graduate and 20-year banking veteran who comes to Wal-Mart by way of Merrill Lynch Bank.

But some groups still have concerns.

"The chairman of Wal-Mart has indicated that the next major growth area for Wal-Mart was financial services," said Ronald K. Ence, vice president at the Independent Community Bankers of America. "He made it very clear that from a corporate standpoint, the company was interested in expanding into financial services, and he didn't indicate that its interest would be 'limited.' It sounds like a very aggressive corporate philosophy that is inconsistent with the philosophy that they're only interested in a very limited, back-office banking operation."

The worry is having a bank branch in every Wal-Mart store, with the company using its considerable heft to do in banking what it has done in retail: undercut competitors in pricing products, driving out smaller, local businesses. Only in this instance, the products would be home mortgages, business and car loans.

"The largest company in the world would certainly have the financial resources to drive other competitors out of the market," Ence said. "Although all merchants are important in a community, we feel that community banks serve a role greater than one might expect from a financial institution of its size in that they support local merchants and local projects. We're just not sure that, on top of everything else, a branch of a nationwide, 50-state bank would share that local focus."