Bankers at Wachovia Corp. are certain they want securities underwriting and distribution powers, but they are uncertain on how they will obtain them.

Executives of Winston-Salem and Atlanta-based Wachovia said last year that they had hoped to decide by the end of the first quarter whether to apply to the Fed for section 20 powers, as commercial banks' securities units are known.

But that decision has not yet been made, said Hugh M. Durden, president of Wachovia Corporate Services Inc.

"Up until this year, section 20 was much too binding on a bank that did business the way we do," he said, referring to the Fed's loosening this year of the regulatory barriers between commercial and investment banking activities.

Those barriers would have fragmented Wachovia's corporate relationship management teams, Mr. Durden said.

"That was too big a give-up for Wachovia. We weren't willing to permit that separation of pieces in a relationship," he said.

In lieu of building a section 20, Wachovia could choose to acquire a firm that is already in the securities business, Mr. Durden said. Although the bank has no plans to make such a deal, it is keeping its options open, he added.

Meanwhile, the bank is setting up a representative office this week in Hong Kong as part of a strategic alliance to market corporate finance services globally with Hong Kong Shanghai Bank Corp.

Both the securities and international efforts reflect Mr. Durden's focus on three key areas: providing access to capital; global connections; and corporate services. All three are needed to survive industry consolidation, Mr. Durden said. "Our customers want to do business with fewer banks, period."

Excellence in basic corporate financial services - such as cash management, pension planning, trade finance, and letters of credit - is still important to Wachovia's customers, Mr. Durden said.

"Cash management is not a sexy growth business, but the good news is everybody has to have it," he said. "I like working for a penny a day instead of a dollar every now and then."

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