First Union Corp. is counting on its CoreStates Financial Corp. acquisition to make waves internationally.
Typical of U.S. banks with a regional focus, First Union has historically been a bit player on the global scene. It has turned over international responsibilities to Michael P. Heavener, a veteran CoreStates executive, and given him an ambitious mandate to expand.
"The merger creates opportunities to connect First Union's domestic corporate clients to CoreStates' international network," Mr. Heavener said in a telephone interview this week. "We will leverage the CoreStates infrastructure to develop business outside the United States, especially capital markets business."
Analysts reacted favorably to First Union's intentions.
"They're taking the best of both banks and putting them together," said Michael A. Plodwick, a banking analyst at Lehman Brothers. "First Union has done a hell of a job domestically with capital markets, while CoreStates has a much longer history and more expertise outside the United States."
The merger, announced in November, is to close April 30. First Union said it will fold international activities into its capital markets division under Charles L. Coltman 3d, a CoreStates vice chairman.
The capital markets division covers a wide swath that includes trading, underwriting, and distribution of securities, specialized lending, and leasing.
Mr. Heavener-his title will be international division head-said the combined organization is likely to form more strategic alliances like one CoreStates entered into with Baden Wuerttembergische Bank of Germany. The two banks agreed to cross-refer business opportunities to each other.
Both First Union and CoreStates have remained largely unaffected by the recent financial turmoil in Asia. Most of their exposure has been limited to short-term trade credits, which tend to be low-risk.
"We avoided the temptation to go beyond extending short-term trade credits to banks," Mr. Heavener said. "So far, none of our credits have gone sour."
Of the two banks, CoreStates has by far the larger international operation, with 25 representative offices around the world, five branches, and international banking units in Miami, New York, Los Angeles, and Houston.
First Union has a branch in London and five rep offices. It is also an important supplier of financial services to foreign embassies, a business CoreStates unsuccessfully sought to enter.
Formerly known as Philadelphia National Bank, CoreStates has been active internationally since its predecessor, the Bank of North America, was founded in 1781. In the 1970s it decided to focus on trade finance and processing operations including payments, collections, and letters of credit for its own account and under contract to other banks.
The expanded international business will be run from CoreStates' base in Philadelphia, First Union's in Charlotte, N.C., and Miami.
The fate of First Union senior vice president Andrew Oleksiw, who until now had overseen its international operations, has not been clarified. CoreStates officials declined to comment on his status, and Mr. Oleksiw was unavailable to comment.
First Union named another CoreStates executive, Hong Kong-based Steven S. Nichols, as deputy division head in the trade services group. Additional assignments are to be announced by Friday.
Mr. Heavener, 54, began his career at CoreStates in 1968 after Army service in South Korea and Vietnam. He was the bank's first representative for Southeast Asia, beginning in 1972. He subsequently became general manager of the bank's international unit and manager for Europe, Canada, and the Middle East. He was named executive vice president for international banking in 1990.