Despite the negative implications for Latin America of the Mexican peso's devaluation, Bank of Boston Corp. has not given up the idea of selling part of its operations there to investors.

The bank's Latin American business, which contributes about 20% to its bottom line, expects loan growth of 20% next year, according to Thomas Theurkauf of Keefe, Bruyette & Woods Inc.

When the issue was raised two weeks ago at an analysts meeting outside San Diego, Bank of Boston outlined its options.

But during an interview last Thursday, bank spokesman John Kahwaty said spinning off a portion of the business is not imminent. "Currently, we are very able to fund the growth in Latin America through existing operations," he said.

Of the bank's $44.6 billion of assets, $6.6 billion come from its offices in Latin America; particularly from Argentina, Brazil, and Chile.

Mr. Kahwaty said the bank can handle growth at current levels in Latin America, partly because while Argentina soars Brazil stagnates.

"We haven't seen the kind of meteoric growth that we have seen in Argentina," he said, "so we're not so challenged with the growth down there that we can't keep up with it ourselves."

Because the bank has only one office in Mexico, the peso crisis "has no bearing," he said. "We view right now the impact from Mexico as purely psychological."

Analysts have been raising the issue of spinning off portions of the Latin American operations for months, particularly because of rapid growth in that market.

"A year ago, I would have said it's possible but unlikely," said Mr. Theurkauf. "Now, I would say it's possible."

Mr. Kahwaty said that, as the bank divests certain businesses domestically, money generated in the United States could be used to help fund Latin American operations. For example, it recently sold its Vermont operations to Keycorp, raising $198.5 million.

However, if the Latin American operations were to be sold, the bank has several ways to proceed, aside from selling all or part of them to the public in an equity offering.

An alternative would be "taking on a partner of sorts with another bank or financial institution that wants to get into Latin America," Mr. Kahwaty said.

A third method would be partnerships with financial institutions on particular projects. A model of this is the bank's current joint venture with American International Group, which allows the insurance giant to sell its annuities to pension plans via Bank of Boston's distribution network.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.