Growth in bank consumer loan portfolios accelerated in 1996, as increases in mortgages and other categories offset a slowdown in credit cards.

Among all federally insured commercial banks, total consumer loans grew 15.8%, up from 9.8% in 1995 and 13% in 1994. (See tables beginning on page 18.)

Consumer loan growth at the 100 largest holding companies was a below- average 11.5% in 1996, a result of retrenchment by such institutions as Bank of New York Co. and Mellon Bank Corp. and consolidations like Wells Fargo & Co.'s with First Interstate Bancorp and BankBoston Corp.'s with BayBanks Inc.

But in a sign of how broad-based the 1996 growth was, the total for U.S. holding companies surged by 16.5%, to $1.15 trillion. The home mortgage category was up 18.4%; home equity, 22.7%.

Other loans-including credit cards, education, auto and boat credits- were down 7.2% among the top 100, probably reflecting credit card problems concentrated among large issuers. But these same loans were up 12% for bank holding companies overall.

"People feel good about the economy," said American Bankers Association economist Keith J. Leggett. "Confidence is at a record high. People are employed; the stock market is booming."

Nevertheless, recent data "suggest a slowdown in the growth of consumer credit."

Mr. Leggett cautioned that consumer credit is a lagging, not leading, economic indicator. Even amid the general optimism, negative indicators from the last year are still at work. Personal bankruptcy filings are expected to reach 1.3 million this year, up from only 250,000 five years ago.

The ABA reported consumer debt equaled 21% of disposable income in 1996, up from 20% a year earlier.

Referring to Federal Reserve and ABA data, rather than the Sheshunoff Information Services data used in the American Banker compilations, Mr. Leggett said consumer installment loan growth was 7.6% in April, down from 9% the year before.

"Consumers are feeling a pinch," he said. "And banks have tightened underwriting, especially in credit card loans."

Securitizations-which take loans off bank balance sheets-may mean that 1996 growth is understated. The Fed said pools of securitized assets accounted for $271.9 billion of consumer loans by depository institutions and finance companies at yearend 1996, up 32.2% from yearend 1995.

Citicorp, BankAmerica Corp., Chase Manhattan Corp., and NationsBank Corp., the top four holding companies in consumer loans, grew in single digits last year.

No. 10 First Chicago NBD Corp. was off 2.6%, reflecting slower demand and tighter underwriting, said senior vice president David T. Fronek.

No. 5 First Union Corp. rose 44.8%, and No. 8 Wells Fargo 110.3% because of mergers.

Having combined with First Interstate, Wells is "now concentrating our efforts in our 10-state territory," said vice chairman Terri Dial.

"We are pleased with the growth in consumer credit," said Kenneth Herz, a spokesman for Chase, which was No. 6 before the Chemical Banking Corp. merger. "It's an area of emphasis."

Home mortgage loans contributed heavily to the expansion of bank consumer loan portfolios. They were up 23.8%, to $676.9 billion, for all FDIC-insured banks at yearend, more than double the previous year's 10.9% rise.

"Banks are picking up a greater percentage of the home mortgage market," spurring overall consumer portfolio growth, Mr. Leggett said. "Many of the top 100 bank holding companies have mortgage finance companies."

With home sales up 8% in the first quarter, more mortgages are on the way, Mr. Leggett said.

Joe Belew, president of the Consumer Bankers Association in Arlington, Va., attributed the expansion in mortgages to consumers' desire to take advantage of stable interest rates. Also, lenders have begun booking home equity loans at the time of a first mortgage.

"Confidence in the economy has led people to loosen standards on borrowing," he said. "The question is, will there be a consumer retrenching?"

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