MTB filling money-management niche abandoned by big banks.

A small New York City bank is targeting international business that money-center banks don't want to handle anymore.

MTB Bank, with slightly more than $200 million of assets, has recently launched a foreign exchange risk-management program aimed at managing foreign currency businesses in the New York metropolitan area.

"The U.S. banking community is disinterested in foreign trade and serving small companies in the international market place," says Fredric Tordella, MTB's chairman.

'A Potentially Huge Backlog'

"What I see is a potentially hugh backlog of banking business that can be done by banks like our own," he said.

MTB, which obtained its banking charter last May, targets companies with $1 million to $20 million in sales.

Mr. Tordella says big banks that don't want to handle $1 million company loans anymore because the paperwork is too time consuming and expensive.

"A lot of our business, in fact, is being referred to us by big banks," he reports.

Mr. Tordella says the clients risk management fall into three categories:

* Those that do international business but don't believe they have have foreign-exchange exposure.

* Those that understand they have exposure but don't know how to manage it.

* Those that know they have foreign-exchange exposure and are trying to manage it but aren't satisfied they're getting the right kind of management.

MTB's bread and butter is

small-scale risk management in currency trades of up to $300,000. Typically, it will look at a year's worth of a client's import-export business and then make a series of proposals on how to manage the risk.

Mr. Tordella said risk management is important or exporters who price in dollars.

For example, if an importer is paying a fixed price in dollars for goods from Germany, and the dollar gains against another curency, the German exporter being paid in dollars earns extra money on the dollars he gets.

Similarly, if the dollar depreciates against another currency like the German mark, the German exporter may well raise his dollar prices, forcing the U.S. importer to pay more.

"It's is a very difficult program to sell, but companies need to keep in mind that they could lose as much as three fourths of their profits through currency fluctuations," he said.

Most of MTB's risk management is by forward purchases or foreign-currency sales. For more sophisticated players, MTB also provides options through a specialized unit, MTB Futures.

Alongside the push into foreign exchange management, the bank aims to expand its correspondent banking network. "small banks say they are increasingly unhappy dealing with money-center banks because of the lack of service," Mr. Tordella says. "This offers us an opportunity to market our correspondent service and payment services to smaller regionals and community banks."

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