American banks crank up profits: Citicorp leads way and beats Wall St expectations with record dollars 2.2bn

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The Independent Online
MOST of America's large 'money-centre' banks reported their results for the final quarter of 1993 yesterday, confirming better than expected profits, thanks largely to stronger trading performance and sharply lower credit costs.

Analysts said the results were the fruits of two years of difficult restructuring by the banks, which were badly weakened by over-aggressive commercial lending late in the 1980s. For the year, the banks also benefited from wide interest-rate margins, although these narrowed considerably during the final months of the year.

Citicorp, America's largest bank, confirmed results it released last week, turning in record annual profits of dollars 2.2bn, and strong fourth-quarter earnings of dollars 575m, or dollars 1.06 a share, despite one-off charges.

The bank's fourth-quarter results easily exceeded Wall Street's expectations, as did those of Chase Manhattan, Chemical Banking and Wells Fargo. First Chicago was ahead of expectations when it reported on Monday. JP Morgan similarly surprised banking analysts last week; Bank of America is scheduled to report today.

Chemical earned dollars 347m, or dollars 1.23 a share, versus dollars 304m or dollars 1.09 a share the year before. For the year, it made dollars 1.6bn compared with dollars 1.09bn in 1992.

Chase's profit in the fourth quarter doubled to dollars 313m, or dollars 1.53 a share, from dollars 169m or 87 cents the year before. For the year, the bank earned dollars 966m compared with dollars 639m in 1992.

Wells Fargo, based in San Francisco, made dollars 190m or dollars 3.18 a share, compared with dollars 58m or 83 cents a share a year earlier. For the year it earned dollars 612m compared with dollars 283m, a difference roughly equal to that between the loan-loss provisions for 1993 and 1992.

First Chicago saw its fourth-quarter earnings rise 27 per cent to dollars 172m, or dollars 1.81 a share, from dollars 136m or dollars 1.53 a share. For the year earnings were dollars 804m versus dollars 93m.