From high-rise offices towering over the blue waters around this semitropical city, big regional banks are looking south to Latin America.

Banks such as First Union Corp., Barnett Banks Inc., CoreStates Financial Corp., and NationsBank Corp. have set up shop here to be closer to a region once shunned for its record of defaults on borrowings from commercial banks.

For these banks, Latin America constitutes a market where there's more economic growth than in the United States, loan margins are higher, and customers are searching for a broader range of products and services than in the past.

"The situation is improving across Latin America," said Carlos Perez, senior vice president in charge of CoreStates' operations there and in the Caribbean. "We reduced our profile in the 1980s, but we've been coming back in the 1990s."

Although data on the Latin lending of U.S. banks is hard to come by, bankers and industry officials said business with Latin America is growing fast. According to their estimates, anywhere from $20 billion to $30 billion a year is lent by U.S. and foreign banks out of Miami to Latin America.

That's up from only a couple of hundred million dollars two decades ago.

"Their customers have a growing interest in South America, and seeing the success of some others like Citicorp and Bank of Boston has probably made them more inclined to explore their own possibilities," said Henry Dickson, a banking analyst at Smith Barney.

With the decade-long Latin American debt crisis and the more recent Mexican financial crisis behind them, bankers are moving beyond the standard 180-day trade credit, extending longer-term loans not only for merchandise trade but for project finance and working capital.

They are also looking to develop business with Latin and multinational corporations, not just banks.

"We concentrated on the short term until now, but we're looking at market trends,"said Ariel J. Marin, senior vice president and managing director for Latin American correspondent banking at First Union National Bank of Florida. If the signals are right, he said, the bank might do some corporate finance with Latin corporations and subsidiaries of multinationals.

The increased interest in Latin America comes amid a broader flow of funds to the region from banks, mutual funds, and capital markets.

"The availability of funds for Latin America in both the short and long term and in terms of debt and equity has increased substantially in the last five years," said Clovis Estorilio, vice president and area manager for international and Latin American banking at Barnett Banks Inc.

Moves by U.S. corporations to expand operations in Latin America are also spurring an increase in credit to the region.

"U.S. banks are following U.S. corporations into Latin America," said Harold Schroeder, a banking analyst with Keefe, Bruyette & Woods Inc. "As corporations are getting more international, banks are getting more international."

Unlike banks in New York-which handle a large volume of business with Latin America revolving around underwriting, distributing, securitizing, and trading Latin American debt paper and syndicating large loans-banks' Miami offices have been used to focus on recycling private banking deposits into short-term trade finance loans.

Most of the loans are extended to some 300 Latin banks, which in turn lend the funds in their local markets.

Between 20 and 30 of the largest Latin banks account for roughly half the borrowings, bankers estimated; banks in Brazil alone account for around 40%. Banks in Mexico, Argentina, Peru, and Colombia are also big borrowers.

Still, with memories of the debt crisis lingering, bankers are leery of moving too fast. For one thing, shareholders and analysts don't like to hear about large increases in cross-border lending, especially to Latin America, and banks are reluctant to embark on anything which could dampen their stock prices.

Secondly, even though so-called transfer risk, or the risk that a government will not allow foreign exchange payments to reimburse a loan, has diminished, commercial risk-or the chance that a bank will go bust-has increased in Latin America.

Even here, though, bankers remain confident, noting that when some of the bigger Brazilian and Mexican banks went under, governments of both countries intervened, and foreign creditors were paid off.

"In most cases, governments stepped in and made sure that short-term trade credits were paid," Mr. Estorilio observed. "We ourselves have never charged off a penny."

For safety's sake, though, bankers said they are sticking to lending to the strongest and largest Latin banks, even though they could get higher spreads with second-tier banks. They are also expanding very cautiously.

Barnett, a $41 billion-asset bank that got into trade-related Latin lending around four years ago, still has only $500 million in commitments, and $140 billion-asset First Union has only about $1.3 billion in approved trade credit lines to Latin America.

But given recent history, analysts said, bankers in Miami face difficult decisions trying to balance business possibilities with Latin America against the potential risks. They added that despite bankers' firm belief that business can be safely increased, big questions remain over how fast banks can move.

"Many of these countries are still developing," Mr. Dickson noted. The question, he said, is whether the banks "can build a viable business."

"These are not stable political environments," said Mr. Schroeder. "Latin America is very fluid, subject to change, and people would be remiss in moving too quickly without remembering recent history."

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