Magazine article American Banker

Chase Profits Rise 7% in First Quarter; National Westminster Bank USA Reports 20% Hike in Net Income

Magazine article American Banker

Chase Profits Rise 7% in First Quarter; National Westminster Bank USA Reports 20% Hike in Net Income

Article excerpt

Chase Profits Rise 7% in 1st Quarter

National Westminster Bank USA Reports 20% Hike in Net Income

Increased net interest income and profits from fees and foreign exchange operations helped the Chase Manhattan Corp. earn $144 million in the first quarter of 1986, a 7% improvement over the $134 million earned in the year-earlier period.

Chase, the nation's third largest bank holding company, earned $1.63 per share on a fully diluted basis, up from $1.46 in the same period a year earlier.

Over the last week, several other major money center banks have reported first-quarter earnings gains, paced by a 58% increase announced by the First Chicago Corp. last Friday and the 42% gain that J.P. Morgan & Co. announced last Wednesday. Other large New York banking firms, such as Chemical New York Corp., Marine Midland Banks Inc., and Irving Bank Corp., have reported smaller first-quarter gains than Morgan.

In most cases, the gains have been stronger than analysts expected, especially in noninterest earnings, which were boosted by sales of investment securities, and net interest income.

"The securities portfolio has taken on increased importance,' said J. Richard Fredericks, an analyst with Montgomery Securities in San Francisco. "Some banks have been very well positioned in this area and have reaped handsome rewards.'

Smaller New York banks have also been reporting improved first-quarter earnings. National Westminster Bank USA on Monday announced a 20% increase in net income to $15.3 million, compared with $12.7 million in the first quarter of 1985.

Chase attributed its increased earnings, which were roughly even with analysts' expectations for the quarter, partly to improved net interest income --which was bolstered by a 61-basis-point improvement in its first-quarter net interest rate spread--and to average earning assets, which were $1. …

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