The paper proposes a spatial competition model of banks' prices and branching decisions as strategic variables in an oligopolistic setting. Since bank typically have more than one branch and their activities usually span over several markets, the multimarket operation of the banks has been taking into account. The model allows to unify the fact that the banks operate in different local markets using branches and they compete in the deposit and loan market using price variables (price of deposit and loan) as well as non-price variable (branches) as strategic variables. An application to Spanish Banking Sector is reported in order to test the effect of banking deregulation in the competition behavior of the two main types of institutions that exist in Spain, private and savings banks.