One of America's largest banks, Chase Manhattan, meanwhile, reported a similarly large profit, surprising most analysts.
Primerica made dollars 177m, or dollars 1.02 a share, compared with dollars 165m, or 90 cents a share, for the same period in 1992, exceeding Wall Street's estimates. Operating profits for Smith Barney, which is to acquire Shearson's brokerage and asset-management divisions at the end of the month, set a record, rising more than 25 per cent to dollars 57.7m.
The company also realised dollars 24m in gains on its share portfolio, notably from its controlling stake in the Travelers insurance group.
Primerica's turnover was only slightly above that of last year's second quarter, at dollars 1.28bn, and was actually lower for the first half of the year. Trading revenues were down from the year before, while investment banking turnover was up sharply.
The second quarter, which ended on 30 June, will be the last before Primerica concludes the dollars 1.15bn merger of Smith Barney and Shearson. Financing for the purchase reduced second-quarter earnings by about four cents a share, Sandy Weill, the chief executive, said.
Chase's second quarter surpassed the most optimistic estimates on Wall Street, with profits up 53 per cent to dollars 233m, or dollars 1.20 a share, on the strength of record trading gains. The year before, Chase, America's fourth-largest money-centre bank, made dollars 152m in the quarter, or 83 cents a share.
Trading revenues, which totalled dollars 187m, were strong both in the aggregate and for derivative products and emerging markets. Chase's performance suggests that other big US banks that report this week - including Citicorp, BankAmerica, Nationsbank and Chemical - will also show better-than-expected profits on their trading accounts, analysts said yesterday.
The other surprise in Chase's results was in the improvement in credit quality. While banking specialists were expecting some decline in non-performing assets, net charge-offs were down dollars 63m to dollars 224m from the same quarter in 1992.
The bank's provision for possible credit losses was also lower, at dollars 225m, down dollars 70m from the year before. Net interest margin continued to be strong at 4.1 per cent.
The outlook for other bank shares is very positive, several industry analysts said. 'It's full throttle for the money centres,' Diane Glossman, senior analyst with Salomon Brothers in New York, said.
In afternoon trading, Chase shares were up 1 4 at 323 4 .