BankAmerica Corp. has applied to open a branch in Venezuela, joining two other U.S. banks seeking to expand their operations there.

The move underscores a growing effort by U.S. banks to expand retail and corporate banking in Latin America. Venezuela, an oil-rich country that has become increasingly friendly to U.S. banks, is simply the latest national market to be tapped.

"Venezuela has returned from the wilderness and gone a long way toward cleaning up its financial system," said Brent Erensel, director for Latin American bank equity research at UBS Securities Inc.

Venezuela's banking market went through a severe crisis in 1994 and 1995 that forced the government to close or take over 18 local institutions.

However, the market has since recovered, and rising demand for loans, especially from oil companies, has encouraged several large foreign banks - including Spain's Banco Santander and Banco Bilbao Vizcaya as well as London-based Standard Chartered - to acquire local banks or open offices of their own.

The average Venezuelan bank, however, remains small. Total total banking assets for the entire country are estimated at less than $20 billion.

Peter Magnani, head of investor relations for San Francisco-based BankAmerica, noted that recent changes in Venezuelan regulations have also made it easier for foreign banks to set up operations in that country.

BankAmerica plans to keep its existing representative office in Caracas. It would use the branch to handle business with multinational corporations and local companies in areas such as foreign exchange, risk management, lending, deposits, and payment services.

This month Chase Manhattan Corp. confirmed that it hopes to open up a banking subsidiary in Venezuela as early as April to handle trading in government bonds and foreign exchange.

A third U.S. bank, Citicorp, has taken an option on acquiring 51% of Venezuela's Banco Union SA. Citicorp focuses mainly on corporate banking in Venezuela, where it has about $480 million of assets.

Citicorp had about $465 million of assets in Venezuela at yearend. Buying Banco Union would considerably extend its retail network in Venezuela and turn Citicorp into Venezuela's third-largest bank, with around $1.9 billion of assets.

Four other U.S. banks-American Express Bank Ltd., Bank of New York Co., Bankers Trust New York Corp., and Republic National Bank of New York-have representative offices in Caracas.

"We aren't looking at large sums of money but we are looking at attractive opportunities with attractive growth rates," Mr. Erensel said.

Though U.S. banks entered the acquisition game in Latin America relatively late, several such as BankBoston Corp., NationsBank Corp., and Citicorp have recently bought banks in Argentina, Mexico, and Brazil.

"U.S. banks were preoccupied with consolidation in their backyard and stepped aside as Spanish banks invested billions of dollars and picked up millions of customers and tens of billions in assets," said Mr. Erensel. "Now they are wisely looking at ways to acquire attractive franchises with dynamic prospects and prices that are a fraction of what's available in the United States."

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