Despite tightened underwriting standards, the largest national banks are holding riskier loan portfolios than a year ago, the Office of the Comptroller of the Currency said Wednesday.

The rising risk is especially evident in credit cards, middle- market commercial loans, and indirect consumer loans, according to a survey of chief examiners at the 82 largest national banks. The risk of credit card holdings was up at fully half the banks sampled.

The trend comes even as banks have markedly tightened their retail underwriting standards, the survey found. It was the OCC's second annual survey of examiners.

OCC officials predicted that banks' tougher standards eventually would lead to safer loan portfolios. But Scott Calhoun, the agency's deputy comptroller for risk evaluation, said it may take until the fourth quarter of 1997.

"The tightening of standards that we're announcing today occurred mostly in the fourth quarter of 1995," said Jeri Gilland, assistant chief national bank examiner at the OCC. "It is going to take 12-18 months to see the results of that."

Mr. Calhoun described the survey results as "an early warning."

"We're using this as a way to ensure that national banks are on top of this, and I think most of them are," he said. The industry, with large capital reserves and robust earnings, is well-positioned to absorb losses, he said. (See related article on page 2.)

The OCC's underwriting survey covered the 12 months ended in May 1996. Examiners at the 82 largest national banks were contacted by the OCC's National Credit Committee, a task force of the agency's most experienced credit analysts. Comptroller of the Currency Eugene A. Ludwig formed the committee, which is led by Ms. Gilland, in February 1995 to keep tabs on lending practices and credit concentrations at national banks.

This survey is the first in which the agency zeroed in on the credit risks cropping up in national bank loan portfolios. Credit risk is the potential for borrowers to fail to repay.

The biggest increase showed up in credit card lending.

Examiners at half the national banks that offer credit cards saw an increase in credit risk in that segment of the portfolio; only 2% saw a decrease.

Similar increases were noted in other parts of the retail portfolios. Forty-three percent of the 67 national banks involved in indirect consumer lending, such as auto loans bought from a dealer, showed increased risk. For direct consumer loans, the risk in 29% of the banks' portfolios rose.

Examiners cited three causes for the increased credit risks: tougher competition, more consumer bankruptcies, and the fact that a strong economy has increased consumer loan demand.

"With delinquencies and bankruptcies up, some risk is inevitably going to creep into banks' portfolios," said Lawrence Chimerine, managing director of the Economic Strategy Institute and consulting economist for MasterCard International. "But we are not talking about anything on the scale of the late '80s, when there were massive writeoffs. This is still very modest, and banks are responding quite appropriately."

In commercial loan portfolios, the biggest increase in credit risk occurred in the midsize loans extended by national banks.

Of the 72 banks surveyed that make middle-market loans, 32% showed increased credit risk. Among the 55 banks surveyed with portfolios that included syndicated loans and national credits, 29% showed higher credit risk.

Bankers said that credit card underwriting standards had continued to stiffen beyond the period covered by the OCC survey.

"We all have budgeted numbers for losses, and those losses are running a little ahead of most folks' projections," said Dev Strischek, senior credit policy officer at Barnett Bank of Palm Beach, Fla. "We always expect losses, but we're tightening even more now to meet our yearend numbers."

The former chairman of Robert Morris Associates stressed that banks have more than adequately priced credit card loans for the risks involved. "We're definitely still making money on credit cards," Mr. Strischek said.

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