clarinews@clarinet.com (01/19/90)
NEW YORK (UPI) -- Chemical Banking Corp. Thursday reported earnings of $95.9 million, or $1.04 a share, in the fourth quarter, off 67 percent from year-ago quarterly earnings of $288.5 million,or $4.66 a share, reflecting heavy Third World loan-related chargeoffs and provisions. San Francisco-based BankAmerica Corp., meanwhile, said it had quarterly earnings of $270 million, or $1.21 a share, up from $265 million or $1.36 a share in the year-ago quarter. It had record annual profits of $1.10 billion for a 52 percent gain over 1988 earnings of $726 million. The Bank of New York Co. Inc. said its fourth-quarter earnings rose to $106.6 million, or $1.43 a share, against earnings in the year-ago quarter of $54.7 million, or $1.10 a share. As with Chemical, annual profits plunged due to stiff increases in Third World loan loss reserves. _C_h_e_m_i_c_a_l_ _B_a_n_k_i_n_g Chemical reported a loss for 1989 of $482.2 million, due mainly to its third-quarter addition of $600 million to Third World loan loss reserves and a $300 million special provision to cover real estate credit losses at its Texas Commerce Bankshares Inc. subsidiary.. In 1988 the corporation earned $753.6 million or $12.02 a share. Annual earnings also were hit by lower net interest income, trading profits and other declines. But trust and corporate finances fees were up, and record foreign exchange trading profits were seen. Net interest income was $513.4 for the fourth quarter, against $750.6 million in the year-ago quarter. Annual net interest income was $2.2 billion, compared with $2.5 billion in 1988. The fourth-quarter and annual interest income fall was partly due to arrears on Brazilian interest payments, narrowing interest rate margins, and loss of interest income after the securitization of loan assets. Interest from Mexican loans was reduced after the bank elected to exchange its eligible outstanding loans to the country for a combination of interest rate reduction and principal reduction bonds. Noninterest income from fees, commissions and trading was $362.5 million in the fourth quarter, against $340.2 million in the year-ago quarter. For the full year noninterest income was $1.4 billion. New provisions for loan losses in the year totaled $1.35 billion, including $66.2 million in the fourth quarter. In the quarter the bank also wrote off $210.5 million in credit losses, including $80.6 million in loans to Argentina following U.S. government instructions. _ _B_a_n_k_A_m_e_r_i_c_a BankAmerica Chairman A.W. Clausen said record yearly earnings made for an ``excellent finish to a turbulent decade.'' He attributed gains to improved credit quality, increased loans and deposits, growing fee revenue and greater control over the bank's operating expenses. Clausen also noted strong growth in domestic consumer loans and residential mortgage loans. Also, the bank trimmed its portfolio of loans to the developing world by $1.4 billion in the year while increasing its reserves against Third World losses to 47 percent of exposure. In 1989 BankAmerica expanded into Nevada through its newly acquired subsidiary, Bank of America Nevada, while its Seafirst Corp. unit added 12 new branches in Washington State's Pierce County, Clausen said. BankAmerica had net interest income of $1.02 billion for the fourth quarter, down from $1.27 billion in the year-ago quarter, reflecting Brazilian failure to pay interest on its loans in the fourth quarter. Noninterest income from fees, commissions and trading was $479 million in the quarter, against $480 million in the year-ago quarter. Loan loss reserves stood at $3.37 billion, including $2.4 billion for Third World credit risks. BankAmerica's portfolio of such long- and medium-term loans totaled $5.7 billion at year end. BankAmerica said it has elected, within the Mexican debt reduction plan, to convert $1.1 billion of outstanding debt into interest-rate reduction bonds and issue $100 million in new loans over three years. BankAmerica's total assets at year end were $98.8 billion, compared with $94.6 billion at the end of 1988. _ _B_a_n_k_ _o_f_ _N_e_w_ _Y_o_r_k The Bank of New York reported full-year earnings of $50.7 million, or 27 cents a share, down 76 percent from 1988 profits of $213 million, or $5.21 a share. The decline mainly stemmed from a $600 million addition in the third quarter to reserves against losses on loans to developing nations. Bank of New York Chairman J. Carter Bacot said the last quarter's ``favorable results were due primarily to increased net interest income and substantial continuing cost savings arising from our merger'' with Irving Bank & Trust Co., completed in the third quarter of 1989. Bank of New York said it sold $634 million of medium-term Third World credit to the secondary market in the quarter just ended, charging off $401.7 million in the process. This brought its portfolio of developing-country loans to $840 million against $1.47 billion at the end of September. The bank said it had agreements to sell off another $61 million in such debt, which would eliminate all remaining exposure in Colombia and ``substantially reduce'' it in Venezuela, Brazil, Chile and Ecuador. Reserves against losses on such loans stood at $537 million, or 64 percent of exposure.