National City Corp., which has already been successful in operating a subsidiary in Canada, is opening its first commercial lending branch north of the border.

The Cleveland banking company said Wednesday that it has gotten regulatory approval from the Canadian government to operate the branch. Executives of National City said it would become more competitive in lending to businesses that operate on both sides of the border.

The National City Bank Canada branch is to be opened next month in Toronto.

National City said it would move the assets of its National City Canada Inc. subsidiary to the new branch, which will help it expand its lending capability there.

“We see a real opportunity to develop cross-border business,” said Bill Hines, vice president and general manager of the 2-year-old subsidiary, who is to be the principal officer in the branch.

National City, which concentrates on middle-market businesses, already lends to more than 100 U.S. companies that have Canadian interests, he said.

“We are happy with the progress we have made,” Mr. Hines said. “We are interested in companies on both sides that have interests in both countries.”

National City is the third U.S. banking company to take advantage of a Canadian law that lets foreign banks open branches in the country. J.P. Morgan & Co. and Chase Manhattan Corp. already have branches there.

Before the legislation was passed last year, banks were required to establish separately capitalized subsidiaries, like National City Canada Inc. The law gives National City’s Canada operations “more opportunities to function as a true branch,” Mr. Hines said.

Carlton Faison, senior vice president of National City’s international division, said the company also can better serve existing clients that have Canadian credit needs. “With the new branch, we can now compete more effectively for new business in our market footprint, where there are companies doing business in Canada,” he said.

Analysts said the move appears positive, especially since it builds on National City’s core strength as a middle-market lender.

“This is just an extension of their basic strategy,” said Kenneth Puglisi, an analyst at Sandler O’Neill & Partners. “It just happens to be in Canada.”

National City announced Friday that it would realign its consumer finance operations. The company said it would close 69 retail loan stores, quit the automobile leasing business, and consolidate its wholesale mortgage origination business into a subsidiary. National City said it plans to cut 200 jobs in the process.

The Canadian branch will have four employees when it opens, but Mr. Hines said the staff will grow throughout 2001.

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