Citicorp and BankAmerica Corp. are expanding their operations in Mexico, a sign of renewed confidence in the country's economic prospects.

BankAmerica plans to open a representative office in Guadalajara next month, while Citicorp will open a branch in Puebla, a growing regional hub east of Mexico City.

"Mexico has clearly come back," said James F. McCabe, senior vice president and country manager for BankAmerica in Mexico. "The outlook is positive."

These new offices are the first significant expansions by U.S. banks since the Mexican financial crisis broke in December 1994.

Triggered by a selloff of the Mexican peso, the crisis led to a sharp drop in foreign credits to Mexico and forced many corporate loan defaults and bankruptcies.

As a result, unemployment rose sharply, real incomes dropped, and U.S. banks found fewer Mexican companies financially strong enough to qualify for debt. The banks then turned their attention to foreign exchange trading and capital-markets-related activities.

Mr. McCabe, however, stressed that as economic growth resumed and inflation and interest rates have fallen in recent years, U.S. banks are looking to grow in Mexico "by adding new customers, providing a broader range of services, and expanding geographically."

BankAmerica already has representative offices in Mexico City and Monterrey as well as a branch in Mexico City. Mr. McCabe added that BankAmerica is considering setting up a Mexican brokerage firm and is conducting a study "with regard to our position on retail banking."

With the exception of Citibank, which established a direct branch in Mexico City in the 1930s, U.S. banks could not perform banking services in the country until the North American Free Trade Agreement, or Nafta, took effect in 1994.

Since then, Citibank and units of six other U.S. banking companies-Bank of Boston, BankAmerica, Chase Manhattan, J.P. Morgan, NationsBank, and Republic New York - have established licensed banking subsidiaries.

Bankers Trust New York Corp. has opened a brokerage firm, and several others have representative offices.

Most had scrapped earlier ambitious plans to expand, pending resolution of the crisis.

A Citicorp spokesman in New York confirmed that it will open its eighth Mexican bank branch in April. He said the branch will handle corporate business. Citicorp is also looking at expanding in the corporate middle market.

Citicorp has the oldest and largest U.S. bank operation in Mexico, with seven branches and more than $5 billion of assets. Half the assets are on the Mexican books, the other half in New York.

The bank indicated several years ago it was aiming for as many as 40 branches in Mexico, but put its plans on hold after the December 1994 peso devaluation.

A branch opening in Guadalajara was delayed until December last year while Citicorp concentrated on foreign exchange trading and high-margin lending.

Citicorp last month obtained regulatory approval to set up a pension fund management company with Mexico's Banca Serfin. The New York company also indicated it may purchase some of the $14 billion of distressed loans the Mexican government has taken over from Mexican banks.

Several other U.S. banks have cautiously resumed Mexican growth. Bank of Boston Corp., for example, has acquired a stake in a Mexican pension fund management company, while Bankers Trust has opened a foreign exchange trading firm in Mexico City.

In a recent report, Deutsche Morgan Grenfell analysts concurred with the bullish outlook: "Macroeconomic prospects for 1997 have substantially improved over the past few months as a result of continued strength in production figures, employment and exports."

The London-based investment bank also noted that Mexico has been keeping its budget in balance, the peso relatively stable against the dollar, and inflation down. The gross domestic product is expected to increase by 4% this year.

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