BankBoston Corp. plans to increase its staff and expand operations in Mexico, according to industry sources in Mexico City.
Sources said the company has hired seven additional staff members to expand treasury and risk management operations. They added that BankBoston is also planning to increase its Mexican banking staff from 80 to 100 by yearend as part of a move to increase leasing, cash management, trade finance, custody, and asset management.
BankBoston executives were unavailable for comment on the report. However, a spokesman confirmed that the bank is implementing a program to expand in several activities in Mexico.
The company opened Banco de Boston SA, a Mexican banking subsidiary, in October 1995. The unit focuses largely on corporate banking operations in Mexican pesos and foreign currencies but has been seeking to expand dealings with Mexican middle-market companies. BankBoston subsequently opened a representative office in Monterrey in October 1997.
BankBoston has the third-largest international network among U.S. banks, with more than 200 offices in 24 countries.
The company has been expanding rapidly in Latin America, where it has 160 offices in Argentina, Brazil, Colombia, Chile, Mexico, Panama, and Uruguay. Last year, BankBoston acquired Deutsche Bank Argentina's retail operations, with $1.5 billion of deposits and $1 billion in loans, as well as OCA, a credit card and consumer finance company in Montevideo, Uruguay.
Earnings from Brazil last year rose 39%, to $99 million, and 40% more in the first quarter of this year. Earnings from Argentina last year climbed 17%, to $74 million, and were up 25% in the first quarter. The bank had more than $8 billion of assets in Argentina and more than $6 billion in Brazil at yearend, or more than 22% of a total $73 billion of assets.
BankBoston's planned merger with Fleet Financial Group has created some doubts over the combined group's commitment to expand in Latin America.
But BankBoston president and chief operating officer Henrique de Campos Meirelles said last month in an interview with Bloomberg News that the new bank would be able to pump even more investments into Latin America after it merges with Fleet.
The deal is expected to close in the fourth quarter.
Mr. Meirelles also said Latin American revenues would fall to 8% of the total, from more than twice that amount at BankBoston alone. He suggested that this decline in overall exposure as a share of the total will give the bank added leeway to take on more Latin exposure.
Mr. Meirelles also recently suggested that BankBoston could expand Fleet's credit card and discount brokerage operations through Quick & Reilly into Latin America. He also indicated separately that the bank will seek to expand Internet banking activities.
The bank provides Internet-based services in Brazil, where about 10% of its new financing for real estate purchases are being initiated on the Internet.
Mr. Meirelles is slated to head up international banking, corporate and investment banking, and investments services at the new company. The combined entity would be the eighth-biggest U.S. banking company, with more than $170 billion of assets.
