First Union Corp. expects more foreign banks to sign with it soon for processing, as Australia and New Zealand Banking Group Ltd. did last week.

"Outsourcing is the wave of the future, and we expect more such agreements as banking consolidates and banks seek to become more efficient," said Charles L. Coltman 3d, executive vice president and head of global corporate banking at the Charlotte, N.C., company.

Mr. Coltman also said that the next deal could be signed with a South African bank.

Last week First Union signed a contract to process trade finance documentation and collections from Hong Kong for Australia and New Zealand Banking, known as ANZ, in Melbourne, Australia.

The agreement is the latest in a series that First Union has signed to handle Asia-based trade finance processing on behalf of Canadian, British, and U.S. institutions.

The bank also decided recently to allocate more than $70 million to develop sophisticated cash management with a special emphasis on international trade and payments, including the development of a multicurrency payment system.

First Union handles its global processing from 11 offices, including five international branches in Tokyo, Taipei, Hong Kong, Seoul, and London, as well as 24-hour foreign exchange trading through its Hong Kong, London, and Charlotte foreign exchange desks.

The $220 billion-asset banking company, which recently acquired Philadelphia-based CoreStates Financial Corp., is also the fourth-largest issuer of commercial letters of credit among U.S. banks, with $2.18 billion outstanding at yearend.

It is also one of several U.S. and foreign banks, including Chase Manhattan Corp., BankAmerica Corp., and Standard Chartered PLC, seeking to handle back-office trade finance processing for other banks under what is known as "private-label" services.

However, Mr. Coltman stressed that First Union is in a particularly advantageous position because it does not compete with other banks for local banking business outside the United States. Instead, it mainly provides banking services to other banks.

"First Union is a logical partner for banks around the world because we do not compete for corporate business other than with U.S. subsidiaries of foreign corporations," Mr. Coltman said.

ANZ, a $100 billion-asset bank, operates in 43 countries in the Middle East, Asia, and the Pacific. Under the agreement with First Union, ANZ will link its Hong Kong trade processing to First Union's and will also makes its network in Asia available to First Union customers.

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