Tremendous gains in third-quarter net income at some of the largest banking companies did not keep analysts from registering concerns Monday about possible bad news looming in the future.

Though Citigroup Inc. boosted earnings more than threefold, to $2.4 billion, and Bank of America Corp. outpaced that with a 475% rise, to $2.2 billion, those who track banking industry performance said they doubted such results can be sustained for long.

"We are seeing some uptick in nonperforming loans," said Diana Yates of A.G. Edwards Inc. in St. Louis. "To my companies, I'm adding a 25-basis-point increase in nonperforming loans into our forecasts for next year.

"It's not to say the sky is falling," she said, "but banks have been operating at unsustainable levels."

The third-quarter earnings were compared with a dismal period last year, when trading results were destroyed by blowups in emerging markets. Trading in the 1999 quarter did not match the levels of the second quarter.

However, the market gave bank stocks due credit Monday. The American Banker index of the top 50 banking companies was up 2.43%, while the Standard & Poor's 500 gained only 0.54%. (See story on back page.) Of the five top-25 bank holding companies reporting earnings, J.P. Morgan & Co. had the biggest percentage rise, at 6.92%.

Any damage from bad loans has not yet materialized, and analysts keep waiting for that other shoe to drop.

"The numbers are good," said Thomas McCandless of CIBC World Markets Inc. "But people are extremely focused on credit quality. The fact that nonperforming assets are inching up has the Street somewhat spooked."

Citigroup credited its spectacular year-to-year improvement to a strong rebound in corporate and investment banking activities and double-digit gains in consumer operations.

Its 72 cents a share beat Wall Street expectations by 4 cents. This month marks the one-year anniversary of the merger of Citicorp and Travelers Group to form Citigroup.

Sanford I. Weill and John S. Reed, co-chairmen and co-chief executive officers of the $689 billion-asset banking company, said the report demonstrated the revenue-generating and cross-selling potential of the combination. "The results speak for themselves," Mr. Reed said. It was "a solid, maybe boring quarter, but we like it that way."

Revenues from operations gained 32% from a year earlier, to $14.3 billion, while expenses rose 15%, to $7.2 billion. The quarter included $22 million in restructuring charges. Citigroup said it was on track to achieve its $2 billion annualized expense-reduction goal by the end of this year and it expects further expense reductions next year.

Net credit losses in the consumer loan portfolio were 2.4% in the third quarter, down from 2.68% in the 1998 quarter and 2.58% in this year's second quarter.

Looking ahead, Friedman Billings Ramsey & Co. analyst Carla D'Arista said, "There are concerns that it's very late in the cycle. There were improvements on the credit side, but they seem to be unsustainable improvements."

Profits from the Salomon Smith Barney unit rebounded to $432 million in the period compared with a loss of $396 million a year earlier, when investment banks felt the sting of the Russian bond crisis. Revenues at Salomon quadrupled, to $2.8 billion, including a 48% gain in investment banking fees, to $760 million. Citi's global corporate bank recorded income of $461 million, up from a $2 million loss in the corresponding period last year.

Profits from SSB Citi Asset Management Group rose 22%, to $82 million, and assets under management increased 20%, to $351.4 billion.

Global consumer operations turned in a 38% gain in profits, to $1.15 billion, on a 12% increase in revenues, at $7.2 billion.

Profits from branch banking in North America grew more than three times, to $111 million, and benefited from expense reductions of $67 million, the company said. Profits from the CitiFinancial consumer lending business more than doubled, to $135 million, reflecting loan growth and improved credit quality, the company said.

Income from credit card operations grew 33%, to $297 million. Card receivables in the United States grew 11%, to $70.7 billion. The loss ratio in the U.S. card portfolio was 4.4% at the end of the quarter, compared with 5.15% in the same period last year and 4.63% in the second quarter of 1999.

Shares in Citigroup closed Monday at $43.8125, up $1.5625.

The second-largest bank holding company reported an almost sixfold increase in net income for the third quarter, fueled by rising fees and falling expenses.

Excluding a $725 million pretax merger-related charge, operating earnings were $893 million in the year-earlier quarter, still less than half this year's total.

Earnings per share of $1.23 were two cents above analysts' consensus forecast.

"It was a great quarter," said David Stumpf of A.G. Edwards & Sons. "They had a surprisingly strong showing in mortgage banking, especially in light of what we've seen at other banks. Investment banking was extremely strong, buoyed by venture capital gains. And I'm very pleased with what came through on service charges for deposits."

Net interest income rose 3% from a year earlier, to $4.6 billion, amid solid loan growth.

"The consumer bank is doing very well," said Lori Appelbaum of Goldman, Sachs & Co. Consumer loans grew 17% during the quarter. Overall managed loans gained 9%, to an average $388 billion.

Noninterest income jumped 55%, to $3.7 billion. Mortgage fees rose on higher servicing revenues, lower prepayments in the wake of steeper interest rates, and consolidation of service operations, said Bank of America chief financial officer James H. Hance Jr.

He also credited the Charlotte, N.C., company's results to higher service charges on deposits, automated teller machines, and credit and debit card transactions.

"The fee side was very strong," said Ms. Appelbaum.

Though much of the increase in investment banking income came from venture capital gains, "I would argue that none of it dropped to the bottom line," said Harold Schroeder, a bank analyst at Schroder &Co. "It was offset by expenditures on compensation" and merger integration, he said. "Overall," Mr. Schroeder said, "that's a positive. They will get their conversion behind them sooner."

Noninterest expenses declined 1%, to $4.5 billion, reflecting savings from last year's combination of NationsBank Corp. and BankAmerica Corp., and before that, NationsBank's acquisition of Barnett Banks Inc.

Bank of America's full-time payroll dropped 9%, to 158,886, and the branch count 7%, to 4,535.

The company will reach its goal for this year of $1 billion in savings from the Nations-B of A merger and $500 million from Barnett, Mr. Hance said.

"The expense side is doing well," said Mr. McCandless, the analyst.

Nonperforming loans increased 22% to $2.81 billion. "There was a lack of deterioration in credit quality," said Mr. Schroeder. "And there had been concerns we could get negative surprises in that area."

Ms. Appelbaum said the bank's management of credit risk has been impressive. She cited the 39% reduction in exposure to emerging markets since the end of 1997. "The company continues to actively manage interest rate, trading and credit risk, and capital on its balance sheet," she said. "That's all encouraging."

The company's shares closed Monday at $49.5625, up $1.375.

J.P. Morgan also exhibited a strong rebound from last year's market turmoil, recording a nearly threefold gain in profits. Earnings per share of $2.22 beat consensus estimates by 7 cents.

Revenues from client activities made up for weaknesses in proprietary trading. Analysts also said stronger than expected gains from equity investments helped boost earnings at the nation's fourth-largest bank. Noninterest revenues for the third quarter gained 56%, to $1.55 billion.

Operating expenses rose 22%, to $1.34 billion. Excluding bonus compensation, however, expenses from operations fell 15% and reflected the company's continued efforts to hold back the rate of expense growth.

Morgan said it was on track with a plan to sharply reduce its credit portfolio, cutting it in half over the last seven quarters. The $255 billion-asset company also announced a plan to buy back $3 billion of its shares.

"They are increasingly looking at using their capital in way that is much friendlier to shareholders," said Ronald I. Mandle, an analyst at Sanford Bernstein & Co.

"The earnings engine we have built in our core business, combined with our focus on capital and expense productivity, allows us to return significant capital to shareholders," said chairman and chief executive officer Douglas A. Warner 3d.

Individual businesses showed a solid recovery from last year's global financial crisis, analysts said.

Profits from global finance activities were $484 million, compared with a loss of $90 million in last year's turbulent third quarter. Revenues from global finance businesses doubled, to $1.38 billion.

Investment banking revenues rose 28%, to $398 million, and included a 13% rise in advisory and syndication fees, to $258 million, and a 69% jump in underwriting revenues, to $140 million.

Profits from asset management doubled, to $57 million, and revenues from the business rose 18%, to $353 million. Assets under management grew 18%, to $323 million, reflecting market appreciation and new business from defined-benefit plan sponsors and private clients, the company said.

Trading revenues gained 19% year over year, to $424 million, but were cut nearly in half from the second quarter. Analysts said several other banks are expected to show sluggish trading results for the quarter, which was marked by volatility.

Morgan also boosted earnings with unexpectedly strong gains from investment securities, analysts said. Equity investments for the bank's own account resulted in revenues of $341 million, more than double the revenues of last year.

Morgan's shares ended the day at $113, up $7.3125.

Net income more than doubled to $773 million on gains from fee income businesses and the sale of the company's factoring unit.

Profits of $1.02 per share beat the analyst consensus target by 50 cents, though the results included a one-time $1.02 billion pretax gain on the sale of BNY Financial Corp. to General Motors Acceptance Corp. Without the gain and other nonrecurring factors, profits would have been 42 cents a share.

The $63 billion-asset Bank of New York continues to derive the bulk of its profits from fee-generating businesses such as securities processing and investment management. Fees from processing activities rose 17% over the year-earlier quarter, to $380 million. Fees from trust and investment management services rose 15%, to $61 million.

Bank of New York said it is also working to reduce its loan portfolio, channeling the freed up capital to other businesses. In addition to the sale of the factoring business, the 15th-largest U.S. bank said it had identified $1 billion in loans it wanted to sell off its books. By the end of the period, about $728 million of those credits remained to be sold, Bank of New York said.

"Our exit from the commercial finance business and from select commercial credits will result in a higher quality prospective earnings profile," said Thomas A. Renyi, chairman and chief executive officer. "These sales will provide capital for reinvestment in our higher growth securities servicing and asset management businesses."

Expenses rose 7%, to $515 million.

Shares of Bank of New York climbed 43.75 cents, to $34.3125.

Detroit-based Comerica reported strong commercial loan growth and fee income in the third quarter as net income rose by 10%, to $170 million.

The $37 billion-asset company, which met analysts' per-share estimate of $1.05, said fiduciary and investment management fees helped boost noninterest income 12%, to $170 million. Noninterest expenses also increased, but at a slower pace. Partly because of higher incentives and annual merit increases, noninterest expenses climbed 9%, to $277 million.

Net interest income rose 8%, to $390 million. The increase was driven by growth of 18% in average commercial loans, to $20.1 billion.

"Loan growth was really good -- better than we expected," said Ms. Yates, the analyst.

Commercial mortgages climbed 18%, to $4.5 billion, while international loans increased 40%, to $2.6 billion.

Asset quality, which had been improving during the second quarter, took a dip. Nonperforming assets were $169 million, or 0.53% of all loans, compared with $122 million, or 0.43%, a year earlier.

Comerica's stock price rose $1.125, to $51.9375.

Olaf de Senerpont Domis, Liz Moyer, and Dan Weil contributed to this article.

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