FIRST Union National Bank of the United States has become the first American regional bank to venture into a partnership with an Asian bank when it set up a joint-venture deposit-taking company (DTC) with the Hongkong Chinese Bank (HKCB). The territory's banking sector has for a long time seen giant American global banks such as Citibank and Bank of America roaming the region, but American regional banks' presence is a rare sight. This equal joint venture, with an initial paid-up capital of $25 million, is a cost-efficient way for this growing regional bank to expand its network to Asia and a conduit where HKCB's customers can enjoy swifter banking service in the Americas. Located in the HKCB office premises in Lippo Centre, the new DTC will focus on trade finance. HKCB has 65 per cent of its loan portfolio in trade finance and First Union Bank is also a predominately commercial bank, with a trade volume this year of about US$4 billion, up sharply from $1 billion two years ago. 'We have a large number of companies which will likely become importers and exporters and users of the capital market,' said Daniel Mathis, vice-chairman of the First Union National Bank. Based in Charlotte, North Carolina, the bank is the ninth largest US bank in assets and ranks third in terms of its asset quality. Faced with more questions from bank customers on China and the Asian market, and a growing number of board member companies which all have interests in Asia, First Union was eager to have an Asian partner. Andrew Oleksiw, managing director of the bank's international division said: 'We couldn't spare the time on the learning curve if we come here alone and the tuition is too high. A joint venture is the best approach. 'A stand-alone First Union branch in Hong Kong would not have given us the kind of local expertise we will gain through a partnership with the Hongkong Chinese Bank.' HKCB has a similar finance breakdown to First Union. With more than 40 per cent of its trade finance involved in imports and exports to the US and an increasing amount flowing to Latin America, a North American partner will sharpen its ability to service the trade business. John Muncy, executive vice-president of Lippo Group, said: 'A lot of Hong Kong companies think Latin America presents good opportunities now.' Lippo Group jointly owns HKCB with China Resources (Holdings). About five per cent of HKCB's trade finance is tied up in Latin American trade. First Union is the largest bank in Miami - which is often labelled as the heart of Latin America - and is well-placed to provide that link for HKCB. The joint-venture DTC should generate US$1 billion annually in trade transactions within five years. Its geographical span is not confined to Hong Kong and China, but covers all of Asia, especially where Lippo has a strong presence - such as the Philippines and Indonesia. Although largely unknown in Asia, First Union has been an aggressive player in the banking scene in the southeastern United States. Its expansion strategy is through acquisitions. Its assets have grown tenfold since 1985. As at September 30, First Union had US$74 billion in assets and 1,300 offices throughout the southeast US and mid-Atlantic region. It also has a 40 per cent-owned affiliate bank in Shenzhen - the Chinese Mercantile Bank - with the Chinese banking giant Industrial and Commercial Bank of China.