Business Notes Financial Services

For neighborhood banks across the U.S., an invasion of financial giants is at hand. Big-city institutions are breaking through the legal barriers that once confined them to their home states. New York's Citicorp, the most aggressive of them all, gained important ground last week by persuading the Maryland legislature to allow the bank to set up branches in the state. The new law gives the same privilege to any out-of-state bank that promises to invest at least $25 million in Maryland and create a minimum of 1,000 jobs. In Citicorp's case, the bank plans to turn an abandoned factory site in depressed Hagerstown into a center for credit-card processing.

Most Maryland bankers strongly opposed the legislation because Citicorp (assets: $151 billion) is more than seven times as big as all of Maryland's 89 banks combined. But Governor Harry Hughes promoted the move as an economic stimulant, a tactic that Citicorp hopes will appeal to other states.

One of Citicorp's competitors, Chase Manhattan (assets: $87 billion), also branched out last week. The bank established a beachhead in Ohio by agreeing to buy two small thrifts, Mentor Savings Bank in Mentor and Federated Savings Bank in Cincinnati. Both were among the 69 savings and loans temporarily closed last month in Ohio.