Cleveland-based KeyCorp has struck an agreement with a British bank to provide trade-related banking services to KeyCorp customers doing business in Asia.
The agreement, the latest in a series of moves by U.S. banks seeking to strengthen their banking transactions with Asia, calls for London-based Standard Chartered to process letters of credit issued by Key Trade Services Limited, a Hong Kong-based subsidiary of KeyCorp established in July 1995.
"Asia is home to the largest overseas markets for Key's corporate clients in the Midwest, Northwest, and around the country," said Henry L. Meyer 3d, chief operating officer of KeyCorp. "This arrangement allows us to provide an increased range of ... services to simplify our clients' international business in Asia."
The bank is negotiating a similar arrangement for trade finance services in Latin America, and Central and Eastern Europe with two unidentified European banks.
In recent months, large international U.S. and foreign banks have struck a number of trade finance processing deals with U.S. regionals, offering to issue letters of credit under the regional bank's name and process the documentation.
Earlier this year, Columbus, Ohio-based Huntington Bancshares and BankAmerica Corp. reached an agreement under which the San Francisco giant will provide trade finance services through a Hong Kong-based Huntington subsidiary.
Standard Chartered has more than $68 billion of assets and an extensive network across Asia, the Middle East, and Africa.
The agreement is its fourth with a U.S. bank.
The British bank struck a broad strategic alliance with First Interstate Bancorp before the Los Angeles bank was taken over by Wells Fargo & Co.
Wells subsequently opted instead to set up a joint trade bank with HSBC Holdings, another London-based bank with extensive operations in Asia.
Last year, Standard Chartered struck a similar deal with Fleet Financial Group Inc. as well as an Asian cash management arrangement with First Chicago NBD Corp.
Leon Wahba, senior vice president and manager of Key's international division, observed that consolidation has pushed KeyCorp and other regionals into international banking and forced them to seek out relatively inexpensive short cuts.
"KeyCorp is made up of a lot of smaller banks, none of which was ever big enough to have an international department," the banker observed.