UPDATE 3-Walmex to open 300 units in Mexico, expand bank

* Walmex to open 300 outlets in Mexico

* Sees 30 stores in Central America

* Plans 12.5 billion peso capital expenditure for Mexico

* Bodega Aurrera Express, key driver (Adds Rank quote, bank details)

By Cyntia Barrera Diaz and Patrick Rucker

MEXICO CITY, Feb 18 (Reuters) - Dominant retailer Wal-Mart de Mexico will use a small supermarket format aimed at low income customers to drive its expansion in 2010, a senior executive said on Thursday.

The company, known as Walmex (WALMEXV.MX), is also set to increase its bank branches by 88 percent, said Chief Executive Scot Rank.

He told analysts at an annual company event in Mexico City that Walmex plans to open 300 outlets in Mexico this year, of which 186 will be the Bodega Aurrera Express, a format it launched last year.

The small stores are located in densely populated urban areas and specialize in selling low-cost staples.

"Bodega Aurrera Express is the first discount store near our customers' homes that offers prices 10 to 20 percent lower than those at other (rival) small formats," Rank said.

Walmex, controlled by U.S. retail giant Wal-Mart Stores (WMT.N), plans to spend 12.5 billion pesos ($975 million) this year to expand operations in Mexico, including store remodeling and distribution centers. That investment is slightly above 2009's capital expenditures.

The company opened 275 outlets in Mexico last year, including restaurants and clothing stores that struggled as consumers put non-essential spending on hold.

In Central America -- where Walmex recently bought 519 supermarket stores in Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica -- the company expects to open 30 more in 2010, Rank said.

BANK LIFT

Walmex launched its bank in 2008 as it joined a growing list of retailers offering simple financial services to customers, many of whom didn't have steady jobs and could not open savings accounts with bigger banks.

Mexico was the first country where parent Wal-Mart Stores launched banking services.

Walmex has been slow to expand the bank as the economic crisis pushed the company to focus on core retail operations as clients were hit by unemployment and inflation. But in recent months, advertising for the bank services has increased.

Mexico's economy likely declined nearly 7 percent last year, one of the worst performances in all Latin America.

This year, Walmex plans to open more than 160 in-store bank branches in Mexico. The retailer does not see taking the bank to Central America for now, Rank said.

Walmex shares ended up 2.77 percent at 63.14 pesos before the company disclosed its 2010 plans. ($1 = 12.82 pesos) (Reporting by Cyntia Barrera Diaz, Gabriela Lopez, Patrick Rucker; Editing by Gary Hill)