Mexico's only Internet-based bank has something most of its U.S. counterparts are still searching for-impressive profits.

Four-and-a-half-year-old Ixe Grupo Financiero turned a profit after three years, said Eluid Arista Gonzalez, director of banking systems. It now ranks as the third-most-profitable bank in Mexico, he said.

Its secret seems to be its dogged pursuit of one sliver of the market- very wealthy residents of Mexico City.

"We are very focused on our niche," Mr. Gonzalez said in an interview after his speech at an Internet World conference in Mexico City.

Such a specific target keeps marketing costs low.

"We've spent nothing on advertising" beyond the cost of two billboards, Mr. Gonzalez said. Ixe gets its customers mainly through basic telemarketing and word of mouth, he said.

In contrast, the handful of Internet-only banks in the United States are more likely to pour huge sums into national or regional mass-media campaigns aimed at building up their brands.

Officials at the newly formed, a creation of Bank One Corp.'s First USA subsidiary, said they are putting most of their promotional money into a national marketing campaign.

The on-line broker E-Trade Group is known for its aggressive marketing, having bought ads for the Super Bowl and popular television programs such as "ER." In April it reported a quarterly operating loss of $14.3 million, compared with net income of $4.5 million a year earlier, because of expenditures related to brand-building.

In June, E-Trade announced it would acquire Telebanc Financial Corp. of Arlington, Va., which has a 1999 advertising budget of $20 million. Telebanc's net income of $1 million last year was down from $4.2 million the year before, because of a decision to redirect resources toward building its brand.

NetBank of Atlanta, with a $4.4 million profit in 1998, up from a $5.5 million loss the year before, announced in February that it would spend with the objective of becoming the dominant brand in Internet banking. Last week it rolled out radio and print advertising in Atlanta and San Diego and said it would expand the campaign to 10 other markets in the fall.

"One of the difficulties the U.S. banks encounter is that they aren't differentiated," said Christopher E. Musto, director of financial services at Gomez Advisors in Concord, Mass.

Convenience and better rates, he said, "is a hard message to get out when many of the big branch banks in the U.S. are developing the same features in their Web offerings."

Ixe of Mexico started as a telephone-only bank. In May 1996, it added services over the Internet. It originally did not anticipate building brick-and-mortar branches. Now, however, it has 16 in Mexico City and the surrounding area.

"It sounds as if it's a branch bank with an Internet presence," Mr. Musto said, a point that is "significant" in making comparisons with U.S. Internet banks, which have fewer branches, if any.

Ixe's 2,500 active users execute 20,000 transactions monthly and are supported by four back-office employees, Mr. Gonzalez said. The bank has had no problems with security, and it averages only seven complaints a month, he said.

Ixe built its system internally using Java technology. One nifty feature is the ability to create savings accounts that apply money automatically to a category of the user's choosing, which might be a vacation, a car, gifts, or even clothing. Customers can also buy mutual funds, trade stocks, pay bills, and execute transfers in real time.

Ixe does not face the level of competition from other banks that its U.S. brethren do. Most of the established banks of Mexico offer only information on their Web pages, not the ability to do transactions, said Javier Romero, financial services partner at Deloitte Consulting in Mexico City.

"The banks are not focusing on the Internet because they're trying to survive," he said.

Ixe entered the market in the wake of the government's 1994 privatization effort, during which 18 banks were sold. Through acquisitions, only half remain, and doubts persist about how the other half will keep going, Mr. Romero said.

In this environment, Ixe is thriving. Though a high-technology company, it is mindful of its high-net-worth customers' demands and sometimes resorts to low-tech means to meet them. Though its clients have access to automated teller machines, Ixe also will hand-deliver cash or documents to clients upon request.

The high level of service may stem from Ixe's name. In Mexico's ancient Nahualt culture, it means "one who always fulfills promises."

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