Breaking the close links between Japanese banks and corporations, Citicorp has arranged a $547 million 364-day revolving loan for NEC Corp., Japan's biggest producer of microchips and personal computers.

In fact, Citicorp said it is the first syndicated revolving facility ever for a Japanese company. The bank declined to disclose terms.

"While such syndicated revolving facilities are common in major money- centers around the world, they have been slow in arriving in Japan," Citicorp said in a statement.

Recent economic turmoil in Japan, the bank added, "has made leading companies such as NEC take measures like the current facility to insure that they are protected from disturbances in financial markets."

The deal comes as Japanese banks are tightening lending to build capital.

The cutbacks in lending follow heavy losses on loans in Southeast Asia, which have forced Japanese banks to dip into capital to augment loan-loss reserves. That has increased opportunities for better-capitalized banks in the United States and other countries to develop business with big Japanese corporations.

"Foreign banks have made a lot of inroads in Japan in the wake of the Asian turmoil," noted Gary Kleiman, president of Kleiman International Consultants, Washington. "A lot of Japanese customers have also opted to diversify with foreign institutions that are seen as more solid. "

Three other U.S. banks-Chase Manhattan Corp., J.P. Morgan & Co., and BankAmerica Corp.-are also participating in the NEC revolving credit. Other participants include three German banks and Union Bank of Switzerland.

Lending by foreign banks in Japan surged to a high of nearly $79 billion in September before slipping to about $72 billion in November, according to the Bank of Japan.

Despite the opportunities that are emerging in Japan, some analysts warn that spreads there will have to widen before banks can justify expanding lending.

"Foreign banks, which in general have vocal and demanding shareholders, will not be able to expand their Japanese loan portfolios as long as they are unable to earn a meaningful economic rate of return," according to a recent report from Salomon Smith Barney, a unit of Travelers Group.

Average net interest margins for banks in Japan, Salomon Smith Barney noted, is now only 0.43%, compared with 1% in Switzerland, 1.35% in Germany, 1.57% in France, 2.39% in the United States, and 2.68% in Britain.

"Foreign banks will find it hard to justify investing any capital for lending in Japan," the report said.

Bankers and analysts said Citicorp mainly stands to earn a commission fee on the NEC facility. But they added that the deal could help the bank develop a relationship with the electronics giant.

"One of the reasons for doing a deal like this beyond just the spread on the loan is that it's part of an overall relationship," said Morgan Brassler, executive vice president in charge of the Asia/Pacific region at Bank of New York Co. Others expressed similar views.

"Citibank is going into this not just for profits from loans but in order to build or maintain relationships with Japanese companies that will survive the credit crunch," said Allen Sinai, an economist with Primark Decision Economics Inc. in New York.

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