Some of California's leading bankers were in Mexico City this week to launch separate ventures aimed at boosting their banks' cross-border businesses.
BankAmerica Corp. vice chairman David A. Coulter and group executive vice president Barbara Z. Otto attended the grand opening of two BankAmerica subsidiaries in the country.
Wells Fargo & Co. chairman Paul Hazen and president William Zuendt were also in the city to sign a memorandum of understanding for a strategic alliance with Banco Nacional de Mexico, the country's biggest commercial bank.
Neither BankAmerica nor Wells Fargo's ventures are expected to have a noticeable impact anytime soon on the banks' earnings. But analysts said the initiatives make sense because they position the banks to benefit from growth in trade from the North American Free Trade Agreement.
"They are logical things to do, given Nafta, geography, and what California and Mexico share in common," said Robert B. Albertson, U.S. bank stock research director for Goldman, Sachs & Co.
BankAmerica's new subsidiaries take advantage of a relaxation of restrictions on foreign banks in Mexico that came with the passage of the trade pact. The treaty allows foreign banks to sell peso-denominated financial services in the country through Mexican subsidiaries.
Previously, most foreign banks in Mexico were limited to dealing in dollars through representative offices. BankAmerica has done this for 45 years through representative offices in Mexico City and Monterrey.
"BankAmerica's investment and expansion here demonstrate our company's commitment to the Mexican markets in very tangible terms," Mr. Coulter said.
More than 10 American banks, including BankAmerica, Citicorp, and Bank of Boston Corp., are taking advantage of the new rules to open peso-dealing subsidiaries.
Wells Fargo is taking a different approach through its partnership with Banco Nacional de Mexico, also known as Banamex. The two institutions are powerhouses in their respective regions. Wells Fargo operates more than 600 branches in California, and Banamex operates more than 700 branches in Mexico.
The two banks said they intend to work together to provide trade finance and banking services to businesses operating in both of their areas. They also intend to help each other with consumer services, technology, and operations.