Taking a cue from other regional banks, Fleet Financial Group has set up a separate trade finance unit and struck an agreement with Britain's Standard Chartered Bank PLC.

Fleet Trade Services Ltd., a wholly owned subsidiary, will provide trade finance to Fleet customers doing business in the Asia-Pacific region.

"Some of the world's brightest prospects for sustained economic growth are in the Asia-Pacific region," said Terrence Murray, Fleet's president and chief executive. "We believe our new subsidiary, working in conjunction with Standard Chartered, will allow us to provide a comprehensive array of trade services to our corporate customers now doing business in this increasingly important region of the world."

Standard Chartered will mainly process letters of credit for Fleet customers out of its Asian offices, thereby helping Fleet avert the need to invest in overseas offices of its own.

"Fleet has clearly become the dominant bank in New England," said Francis X. Suozzo, a bank analyst at S.G. Warburg & Co., New York. "They have a strong corporate presence in that market, and hooking up with Standard Chartered is a natural."

"For all intents and purposes," he said, "it's another form of outsourcing and keeps them from having to commit on-the-ground resources in foreign markets."

The deal will help both companies "benefit from the corporate flow in either direction," Mr. Suozzo said.

Fleet officials said the gross domestic products of developing countries in the Asia-Pacific region have grown twice as fast as GDP in the United States or the countries of Latin America. Asia-Pacific GDPs are growing 3.5 times the rate of those in Europe.

Fleet is the latest of a number of regional banks to have struck a working alliance with a foreign partner in Asian trade finance.

Last year, Wells Fargo & Co. set up a joint trade bank in Los Angeles with HSBC Holdings PLC. First Interstate Bancorp, which recently agreed to merge with Wells, has a longstanding strategic alliance with Standard Chartered, and Charlotte, N.C.-based First Union Corp. has a strategic alliance with Hongkong Chinese Bank.

Bank of Boston Corp., Fleet's major competitor in New England, also launched a major drive last year to expand trade finance to small and medium-sized companies.

Reorganizing its trade finance operations has become increasingly urgent for Fleet. The $86 billion-asset bank company recently completed its merger with Shawmut National Corp. and has agreed with Britain's National Westminster PLC to acquire that bank's $30 billion-asset U.S. operation. Both Shawmut and, in particular, Natwest are active in trade finance.

Jersey City-based Natwest Bank, for example, had $276 million in outstanding commercial letters of credit at Sept. 30, or more than triple the $86 million at Fleet. Shawmut had $139 million in outstandings.

Robert Johnson, senior vice president in charge of international operations at Fleet, said trade-related transactions among existing customers are growing by up to 12% per year. Transactions with new customers are growing even faster, 15% a year.

Mr. Johnson credited an increase in world trade, coupled with a ratcheting up of exports by U.S. companies, for making export finance increasingly important.

"Five years ago, the greater number of our customers didn't need anything internationally," he observed. "Today, trade finance has suddenly become applicable to a growing percentage of our customer base."

Mr. Johnson termed the agreement with Standard Chartered a "cooperative" arrangement rather than a strategic alliance because it didn't involve an equity stake.

Although based in London, Standard Chartered has most of its operations in Asia, where it maintains about 200 branches, including 100 in Hong Kong. The bank has for several years been building its local consumer as well as correspondent and trade-related banking operations.

Mr. Johnson said the creation of a subsidiary comes mainly in response to increased demand from middle-market customers for trade-related services rather than from any ambition on Fleet's part to develop international activities.

The agreement calls for Standard Chartered to provide processing facilities for Fleet in Asia. Financial terms of the arrangement were not disclosed, but the similar deal between Standard Chartered and First Interstate employed a complex formula for allocating fees earned through cross-referrals.

Mr. Johnson said Fleet is considering similar arrangements with banks for other services, such as international cash management.

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