In a bid to take advantage of the North American Free Trade Agreement, Comerica Inc. said it may set up a separately capitalized bank in Canada.

"We're seriously looking at that possibility and close to making some decisions," said Douglas A. Ransdell, senior vice president in charge of Comerica's international finance department. "We basically are taking a North American approach to our corporate banking business by having operating platforms in Mexico and Canada."

Sources close to the Detroit-based bank said Comerica has opted to open a bank rather than a branch because it believes that pending Canadian legislation to let U.S. banks branch into Canada might be several years away.

Comerica already does transactions in Mexican pesos and Canadian dollars. In addition to providing trade finance, Mr. Ransdell said, Comerica will be seeking to build middle-market corporate banking business in both countries. "That," he added, "means credit and noncredit products."

The contemplated move would be the latest in a series of steps by U.S. regional banks to expand their international banking activities in the wake of NAFTA's adoption.

Comerica, which has $34 billion of assets, opened a representative office in Toronto last October to serve large and midsize Canadian companies as well as U.S. firms doing business in Canada.

In April, it opened a Mexican bank, Comerica Bank Mexico SA, to offer corporate banking services and trade finance to middle-market and large companies in 14 Mexican cities. The Mexican bank will also serve U.S. companies based in Michigan, Texas, California, and Florida.

Canada is the largest U.S. trading partner; Mexico is second-largest.

"Trade flows among Canada, Mexico, and the United States are extensive and continue to increase," Mr. Ransdell observed.

In addition to expanding operations in Mexico and Canada, Comerica is also forging links to European corporations that do business within the bank's midwestern market.

Mr. Ransdell said that although Comerica is also looking at Asia and other parts of Latin America it will first concentrate on expanding in North America. "Our focus is making sure that we are competitive in our own backyard first and foremost," he said.

Comerica is looking very closely at the Far East and various options in Brazil, "but we haven't made any firm determinations yet," he said.

Brazil is an important market, and the bank would like to do more there than it's doing now, Mr. Ransdell said.

Brazil is "on the drawing board, but it's a little further out than our North American operations," he added.

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