Glory proved fleeting for Citicorp.
After supplanting BankAmerica Corp. earlier this year as the top bank in market capitalization, Citicorp lost the title in the second quarter, with BankAmerica again taking the lead.
The value of BankAmerica's outstanding stock rose 16.2% during the period, to $16 billion, according to an American Banker survey. Citicorp, by contrast, saw the value of its stock rise just 6.4%, to $15.5 billion.
Analysts said BankAmerica's gains stemmed from improved earnings, which helped push up the company's stock price.
Overall, the top 100 banks registered a 6.8% increase in their market capitalization, the survey found. (See tables, page 4.)
BankAmerica had held the No. 1 position for seven consecutive quarters until the first quarter of this year. At that point, Citicorp took the lead for the first time in four years. Analysts had cautioned, however, that Citicorp's reign might prove brief.
"Bank of America was ranked first for the second quarter because it finally broke out of its earnings channel," said Ronald Mandle, money-center analyst with Sanford C. Bernstein & Co. The San Francisco-based company earned $1.26 a share, after hovering at around $1.20 for three years, Mr. Mandle noted. The earnings gain, in turn, boosted BankAmerica's stock price $45.75 a share at June 30 from $39.37 at March 31.
"Citicorp and Bank of America are close," Mr. Mandle added. "Bank of America just had better earnings than Citicorp in the second quarter, that's all."
Mergers Not a Factor
Other factors that can influence market capitalization - such as mergers and stock issuance - were not a factor in the quarter, analysts said.
The ranking of the top 100 was compiled for American Banker by SNL Securities, Charlottesville, Va. The amount of market capitalization was tabulated by multiplying the number of the bank's common shares outstanding on March 31 and June 30 by the closing price of the bank's stock that day.
In another shift in the upper ranks, NationsBank Corp. knocked Bane One Corp. from the No. 3 post.
NationsBank's capitalization rose 12.3% for the quarter, to $14.1 billion. Bane One's market capitalization rose a much smaller 3.8%, to $13 billion.
Total market capitalization for the top 100 banks amounted to $288.2 billion in the second quarter, according to SNL Securities, up from $270 billion in the first quarter.
SNL Securities' analyst Scott Winslow agreed that changes in stock prices generally accounted for changes in the rankings.
"The ranking of market capitalization gives you a sense of which institutions investors think are worth more," he said.
Morgan in 5th Place
Only 13 of the top 100 banks registered declines for quarter, reflecting generally favorable conditions for banking.
The market capitalization of J.P. Morgan & Co. dropped 0.8%, to $11.9 billion - but the venerable institution retained its No. 5 ranking.
Bankers Trust New York Corp. fell to 17th place from 14th in the first quarter, with a 6.2% decline in market capitalization.
Mr. Mandle said Morgan's and Bankers Trust's trading activities and derivatives losses have depressed their capitalization.
Mr. Winslow at SNL said Bankers Trust's losses in its derivatives portfolio helped drag down its capitalization because investors shied away from the bank's stock. Trading Places Top 5 banking companies bymarket capitalization, in billions Rank Market6/94 3/94 cap 1 2 BankAmerica $16.0 San Francisco 2 1 Citicorp 15.5 New York 3 4 NationsBank 14.1 Charlotte, N.C. 4 3 Bank One. 13.1 Columbus 5 5 J.P. Morgan 11.9 New York Source: American Banker