factoring services in the Far East. First Union, which is based in Charlotte, N.C., said its Hong Kong-based affiliate will join with First Factors Corp. of High Point, N.C., to offer factoring services to Asian exporters for their sales to U.S. and European buyers. Under the alliance, First Factors will purchase the exporters' invoices and then assign the receivables to First Union HKCB Asia Ltd., a company jointly owned by First Union and Hongkong Chinese Bank. "We think our timing is great," said Steven Bash, a managing director in First Union's International Division. "We think we're right there to help these companies increase their sales." Mr. Bash said Asian companies have matured to the point where they are more receptive to using factoring - a financial guarantee provided by a third party - to facilitate their export sales. Other U.S. banks that provide factoring services in Asia include Charlotte-based NationsBank Corp. and an alliance of State Street Boston Corp. and Philadelphia-based CoreStates Financial Corp. The Asian exporters "are ready to go to the next stage in terms of how they sell and buy," Mr. Bash said. "That stage is open account. That's where we've seen the market move in Hong Kong over the last five years." Factoring is a form of financing and asset protection in which the seller transfers title to its accounts receivable to a factoring company, which in turn finances the seller, manages the assigned accounts receivable, and collects money from buyers. The buyers can make their purchases on credit using an "open account" arrangement. Mr. Bash predicted that the arrangement with First Factors will expand First Union's client base in Asia and also provide the banking company with some fee income. But the bottom line impact, he admitted, will be diluted by First Union's half ownership of First Union HKCB. "You're not going to see a line item in our annual report, that's for sure," Mr. Bash said. The First Union-First Factors joint venture will be administered from Hong Kong by Ralph Lai, previously with New York-based CIT. Mr. Lai, a Hong Kong native, has also worked in the Hong Kong office of Rabobank Nederland.

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