Third-quarter sales by bank broker-dealers were up 146% from a year- earlier, according to one common measure. But profit margins were thinner.

Banks racked up $1,371 of investment services revenue per $1 million of retail deposits, up from $556 in 1995's third quarter, according to surveys by Kenneth Kehrer Associates, a research firm in Princeton, N.J.

Fixed annuity products' larger share of the sales mix in the 1995 quarter accounted for the wider margin then. Fixed annuities usually command about a 6% commission, while mutual funds only pay about 4%. Mutual fund sales were steady from last year to this.

In last year's third quarter, 33% of all investment products sold at bank broker-dealers were fixed annuities. In this year's third quarter, fixed annuities were only 28% of the sales mix.

Though sales per million of deposits were up from year-earlier, they were below the second-quarter level.

"Everything worked to the bank broker-dealers' advantage in the second quarter," Mr. Kehrer said. Though sales of fixed and variable annuity usually move in opposite directions, during the second quarter sales of both grew. Annuities tend to be popular at bank brokerages.

Some of the sales improvement resulted from bank broker-dealers' getting better at their business, Mr. Kehrer said. Improvements in distribution helped, as did a fund market that was stronger than an year earlier, he said.

But though banks benefited from the strong market, they were slow to "jump on the mutual fund bandwagon" and probably could have done better, he said.

The 1995 quarter's high average commission per sale, like its higher profit margin, was due to the greater proportion of fixed annuities, according to the Kehrer study.

In the third quarter this year, the average commission at bank broker-dealers was $496. The average at nonbank brokerages was $156.

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