Bank of Boston Corp. announced Tuesday that its recently announced credit initiative had generated $761 million in new loan commitments in its first three months of operation.

The commitments, which range from $1,800 to $30 million, went to 291 existing customers who wanted additional credit and from 242 new customers.

The bank made $800 million in new loan committments for all of 1991.

The bank said 83% of the new customers were small businesses with annual sales at or under $5 million. It also said that of the 291 businesses that had received increases in their credit lines, 79% were small businesses.

However, it did not break out how much it committed to new as opposed to existing customers, nor did it list how much money it had committed to large businesses as opposed to small businesses.

It also did not break out what percentage of the commitments had become loans.

Bank of Boston, which has $32.3 billion in assets, launched the initiative with much fanfare May 18 as a way to drum up loan demand in a sluggish market.

It pledged to make $3 billion in new loans in two years.

Since then, Shawmut National Corp. in Hartford has announced a similar initiative, pledging to make $1 billion in new loans over an unspecified period.

Substance Questioned

Competitors, analysts, and businesses that are still struggling to get credit maintain that while it may be good marketing, the Bank of Boston initiative is more hype than substance.

"The real question is, |Who are you after,'" said John D. Rooney, Jr., an analyst at Legg Mason Inc. in New Haven. "Are you after the customer who can't get a loan anywhere else?"

Robert Mahoney, head of New England lending for Bank of Boston, said the initiative should not be seen as a panacea for New England's economic ills.

He said the credit crunch still exists in the region, and said that despite the initiative's efforts, Bank of Boston has stricter lending standards than it did in the 1980s.

In fact, he said, even if the credit initiative continues to generate loans at this pace, something he could not guarantee, Bank of Boston will probably only see a 4% to 6% increase in New England loan volume this year. Last year that sector declined about 15%.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.