Wachovia Corp. and London-based HSBC Holdings PLC have formed an alliance to jointly market corporate financial services globally.
The new alliance, announced Monday, will provide trade finance, cash management, and corporate banking services and products to both banks' customers.
"It's another step in Wachovia's development," said L.M. "Bud" Baker Jr., Wachovia's president and chief executive officer. "It's very difficult to operate in the world today without global operations," he said, in a telephone interview.
Wachovia, with headquarters in both Winston-Salem and Atlanta, has a long-standing relationship with HSBC, including facilitating major letters of credit. But the new alliance is much more broad in its scope, said Mr. Baker.
"Together we will be providing service that neither could provide separately," he said.
Made available to corporate customers will be such products and services as import and export letters of credit, local-currency financing, cross- border and in-country cash management, and structured and project financing.
Although there will be no exchange of equity, HSBC and Wachovia will exchange personnel and combine existing products, and may develop new services.
HSBC, with offices in 77 countries, established a similar alliance with Wells Fargo & Co. last year, with a focus on trade services. That operation is aimed at West Coast businesses, an HSBC spokesman said, while the Wachovia alliance will target corporate customers on the East Coast.
Several other U.S. banks have recently established trade or corporate finance relationships with banks that have large operations in Asia. Earlier this month, KeyCorp reached an agreement with London-based Standard Chartered to issue letters of credit for the Cleveland bank's Hong Kong- based subsidiary, Key Trade Services Ltd.
Similar deals were arranged last year for Fleet Financial Group Inc. and First Chicago NBD Corp. And Columbus, Ohio-based Huntington Bancshares arranged to provide trade finance services with BankAmerica Corp. through a Hong Kong-based Huntington subsidiary.
The relatively strong growth outlook for Asia-particularly Southeast Asia-for the next six to 10 years has made it an attractive place to invest for Wachovia's corporate customers, said Mr. Baker.
"Virtually all of our corporate customers want to do business in that area," he said.