with Fleet Financial Group to expand its operations in Mexico.

BankBoston, which opened a Mexican-licensed bank in 1995 and a branch office in Monterrey two years ago, has $600 million of assets in Mexico, well below the $7 billion it has in Brazil and the $9 billion in Argentina.

"We intend to target the top end of the market (in Mexico) and pursue a strategy comparable to what we are doing in Brazil," said BankBoston president and chief operating officer Henrique de Campos Meirelles.

Speaking to reporters attending the International Monetary Fund and World Bank meetings here this week, Mr. Meirelles pointed out that BankBoston's planned combination with Fleet would reduce the new company's operating earnings from Latin America to 8% of total operating profits, from 20%.

The two Boston-based banking companies are scheduled to complete their merger next week. The combined Fleet Boston Corp. would have $180 billion of assets.

According to Mr. Meirelles, the combined company will be able to increase its earnings from Latin America and at the same time reassure the stock market that it is not overexposed in what many view as a volatile area because those earnings will account for a smaller slice of overall profits.

"The market has a lot more confidence in us when they see 8% of our earnings coming from Latin America rather than 20%," the Brazilian-born executive said.

BankBoston's stock price has taken a beating during the financial crisis that hit Latin America and other emerging markets beginning two years ago. Fleet has virtually no Latin exposure.

The Mexican expansion will be broad-based and include the development of new operations in corporate and trade finance, capital markets activities, cash management, and leasing, Mr. Meirelles said. The new company would do business in U.S. dollars and Mexican pesos and focus on attracting local corporations, financial institutions, and multinationals as customers.

The combined company also intends to expand in Latin American countries where it already has a presence, such as Panama, Chile, Uruguay, and Colombia. But it has no plans to move elsewhere in the region, he said.

"I said at the time of the crisis in Brazil that our earnings would continue to grow despite the crisis and they did," Mr. Meirelles said. "We still expect earnings to grow every quarter."

According to a BankBoston survey, U.S. investors are significantly more confident now about the prospects for Latin America than they were a year ago. The poll gave Mexico the highest marks for successfully managing its economy through the crisis. However, the study also found that investors are concerned about year-2000 computer problems hitting Latin America at the end of this year.

Mr. Meirelles brushed off concerns about Ecuador's inability to meet its interest payments on $13.5 billion in foreign bonds. This will not negatively affect confidence in the rest of the region, he predicted.

"Ecuador represents less than 2% of the emerging-market debt index," he said. "We don't think this will draw much attention."

He also predicted that efforts by multilateral agencies to get banks to participate in bailouts of financially troubled countries will not have major ramifications for financial relations with other Latin countries.

"There will continue to be financial support for specific countries that take appropriate measures," Mr. Meirelles said.

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