National Bank of Canada is adding offices in the United States in an effort to build its asset-based lending business.

Canada's sixth-largest banking company recently won regulatory approval to open a representative office in Somerville, N.J. And the bank is planning another in Seattle in November, provided regulatory approval is given, said Roger Smock, a senior vice president who oversees the bank's U.S. operations.

"We think the market in the U.S. for asset-based lending is just huge," Mr. Smock said.

Based in Montreal, $57 billion-asset National Bank of Canada is known for its effort to cultivate clients among U.S.-based middle-market borrowers. As a result, it views its primary competitors as U.S. regional banks.

The bank is also considered a specialist in asset-based lending, in which credit is secured by a firm's balance sheet assets, such as inventory or receivables.

"Most foreign banks in this market want to do big-ticket syndications," Mr. Smock said. "But asset-based lending has been our traditional business for decades on both sides of the border."

Mark Maxwell, an analyst at CIBC Wood Gundy in Toronto, applauded the Canadian bank's growing presence in the United States.

"The bank needs to diversify its base," he said, "because they currently have 68% of their assets in Quebec, which is both a politically and economically vulnerable area that won't grow as fast as the rest of North America."

While the bank has been a presence in the United States for many years, it has accelerated its activities in the past 18 months with the opening of representative offices in St. Louis, New Orleans, and Richmond, Va.

The bank has also opened up a finance company subsidiary in the United States-National Canadian Business Corp.-with offices in Cleveland, Memphis, and Somerville, N.J. The subsidiary focuses on asset-based lending for small companies, defined as having equity from $100,000 to $2 million.

For the fiscal year ended Oct. 31, National Bank earned more than $110 million of net interest income from its operations in the United States. Almost 9% of its outstanding loans are tied to the U.S. market.

National Bank has a network of more than 650 branches and offices across Canada.

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