MONTERREY, Mexico -- Citicorp and Chemical Banking Corp.'s Texas Commerce Bancshares are intent on expanding in Mexico.

Officials of the banking companies outlined their strategies at a conference of the Mexican Institute of Finance Executives.

Awaiting Trade Pact

Marc Shapiro, chief executive of Houston-based Texas Commerce, said its broadening of banking services in Mexico will have to await ratification of the North American Free Trade Agreement.

Texas Commerce is planning to open a representative office in Monterrey, capital of the northern state of Nuevo Leon.

Chemical Bank has had a representative office in Mexico City for 35 years, offering trade finance, international fund-raising, and investment advice.

The free-trade agreement would open Mexico to full-service banking operations from the United States and Canada.

Geographic Potential

For Citibank, the one foreign-owned bank with deposit-taking powers in Mexico, growth plans do not depend on the trade pact, said Citicorp executive vice president Dennis Martin.

"Mexico has the potential to compete strongly with Asian countries purely by virtue of its geographical position" as a U.S. neighbor, Mr. Martin said.

The free accord would help make Mexico's banking system more efficienct, he said. "There will be more competition, and the cost of credit for consumers as well as industrial and retail companies will come down."

Citibank's plans include adding an undetermined number of branches and forming alliances with other institutions. Alliances, Mr. Martin said, are vital to improving services and their distribution.

He said Citibank also wants to manage pension funds, which is not permitted under current banking law. "Where we are able to enter into new businesses, such as pension fund management or credit cards or a strategic alliance, we will do it."

Global Strategy

"Mexico is important as part of a wider, global strategy for Chemical," said Mr. Shapiro, noting that it was the No. 1 arranger of syndicated loans worldwide last year.

"As confidence builds in the miracle of Mexico, Chemical and Texas Commerce anticipate a market for products we have developed around the world and on your border," Mr. Shapiro told the Mexican bankers.

He said he foresees a growing market for both traditional investment products and more sophisticated derivatives.

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