First Union Corp., taking advantage of its purchase of CoreStates Financial Corp., plans to use CoreStates' global network to expand its worldwide capital market activities.

George M. Doolittle, a First Union senior vice president and general manager for Europe, said the initiative will include private placements, foreign exchange and interest rate derivatives, asset-securitization, trading, and loan syndications.

First Union also plans to step up global asset management activities as well as international cash management, on which it is spending about $70 million extra.

"Our correspondent banking network is being reincarnated as an origination and distribution network," Mr. Doolittle said. "The merger gives us a very strong footprint and puts us in a strong position."

As part of the effort to develop global capital markets activities, First Union has assembled a team that includes Andrew Oleksiw, who formerly headed up First Union's international operations from Charlotte, N.C., and Robert Teller, who was recently hired from Lehman Brothers.

The two will work closely with James Ho, head of North Asia; Tom Kirker, head of South Asia; Steve Bash, head of the Middle East and Africa; Carlos Perez, head of Latin American operations in Miami, and Mr. Doolittle in London.

In related moves, the banking company this year hired Jae Bryson, a former senior economist for the Federal Reserve Board in Washington, D.C., and David Round of Lloyds Bank, as vice president and market consultant in London. The two will work on First Union's strategy for the euro, the single European currency, which is to take effect next January.

In a first step toward achieving the bank's international capital market objectives, First Union has applied to the British Securities and Financial Authority to set up a London-based investment bank to be known as First Union International Capital Markets. The bank has combined First Union's and CoreStates' London dealing rooms and has linked the London dealing room to Hong Kong.

In a related move, First Union last month bought a 10% stake in Vienna- based Centro Handelsbank. First Union will use its new link with Centro Handelsbank to develop operations in Central and Eastern Europe in areas such as countertrade and equity investments and to market financial services to local banks.

First Union also plans to open a representative office in Moscow in the first quarter and another office in Warsaw within 12 months. First Union has a window into Russia under a consulting and advisory agreement with Russia's Alpha Bank.

First Union has more than 1,200 employees in its international operations, correspondent relationships with 1,400 banks in 130 countries and 33 overseas branches and representative offices. Its international unit is one of the largest providers of trade finance services, processing 200,000 import letters of credit valued at $5 billion annually, and 350,000 export letters of credit and collections valued at $12 billion.

Mr. Doolittle said the decision to use the correspondent network to market an array of products underscores the combined bank's greater capital resources, as well as an evolution of integrated banking systems.

"We believe that correspondent banking has moved on beyond payments and processing to broader relations with other financial institutions that include capital markets, consulting, and outsourcing," Mr. Doolittle said.

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