In spite of shaky global markets, U.S. banks are continuing their push into Latin America.
In two of the latest forays, Citigroup's Citibank is targeting Argentina and Chile, and BankAmerica Corp. is building a presence in Venezuela.
The continuing expansion in Latin America comes despite growing uncertainty about the economic outlook there and in other emerging markets.
According to information released last week by Argentina's central bank, Citibank will acquire most of the assets of Banco Mayo, which was closed early last month after a run on deposits.
News agencies also quoted a Citigroup spokeswoman in Santiago as confirming that the company is considering buying Financiera Atlas SA, Chile's second-largest consumer finance company.
A Citigroup spokesman in New York declined to comment on either transaction. No terms were disclosed.
Separately, BankAmerica confirmed that it has obtained regulatory permission to open a bank in Venezuela. The North Carolina banking company has branches in Chile and Argentina, representative offices in Colombia and Brazil, and a banking subsidiary in Mexico.
Chase Manhattan Corp. established an office in Venezuela this year.
Banco Mayo, Argentina's 19th-largest, shut down last month after rumors that it had run into financial difficulties triggered a run on deposits.
The Argentine central bank said Citibank has offered to guarantee $728 million of Banco Mayo's checking and savings accounts and certificates of deposit provided it gets government assistance in reimbursing deposits.
In exchange, the U.S. bank would get 54, or half, the Banco Mayo branches. This would double Citibank's branch network in Argentina. Citibank would also get Banco Mayo's Provencred credit card business, and 1,850 to 2,000 employees.
The deal would be the second-largest Latin American purchase by Citicorp this year.
The deal is the second planned purchase of an Argentine bank by a U.S. bank company this year. BankBoston Corp. acquired Deutsche Bank's Argentina retail network.
The Citigroup acquisition would come amid forecasts that Argentina's economy will slow down. In a report last month, Salomon Smith Barney, a unit of Citigroup, predicted that Argentina's economic growth would slow to between 2% and 3% next year.
Salomon Smith Barney, however, also predicted that larger banks will do better than smaller ones because of their stronger liquidity.
Banking sources in Buenos Aires said there is no reason why financial turmoil in Asia and Russia should spread to Argentina. They also speculated that Citigroup, which would get Banco Mayo for a nominal amount, could use the bank as a vehicle to expand local retail as well as small-business lending.
"They're basically getting it free and picking up branches and a credit card business," said Christopher Ecclestone, a strategist at Buenos Aires Trust Co., a small Argentine investment bank.