Now that banks are highly capitalized, you might expect to find them investing in the newest asset-backed securities in order to squeeze as much profit out of the market as possible.

But this is not happening.

While a few banks do invest in such offbeat securities as those backed by mobile homes, banks as a group continue to be as conservative as Midwest pensioners.

When looking to dabble in the asset-backed market, banks still turn to the old standbys: mortgage-backed securities, credit card loans, and automobile loans.

"Banks are big on credit cards and auto loans," said Paul Jablansky, head of asset-backed research for Salomon Brothers Inc. "The offbeat securitizations are more attractive to insurance companies than to banks."

He noted that banks are interested in making a quick return on their investment and are attracted to shorter-duration loans.

"I think their view on alternative investments comes down to cash versus short-duration, asset-backed yields," said Mr. Jablansky.

Raphael Soifer, an analyst at Brown Brothers, Harriman & Co., said banks traditionally have bought mortgage-backed securities and credit card securitizations because they originate those kinds of loans themselves.

"They put their own originations in the market and buy others' back to improve liquidity and capital," said Mr. Soifer.

In fact, Mr. Soifer pointed out, banks now are finding even those markets are getting squeezed because of the pressure on interest margins and the depressed bond market.

"Mortgages and credit card loans are typically higher-yielding assets than other loans," he said. "They are securitizing less and holding their own stuff longer."

The proof that banks are emphasizing their traditional businesses - making consumer and commercial loans - is reflected in the numbers, said Warren G. Heller, research director of Veribanc.

From September 1992 to September 1994, he noted, all types of traditional bank lending, except for home equity loans, have markedly increased.

In the past year, for example, business loans rose by $50 billion, Mr. Heller said. Credit card lending was up $30 billion. Real estate loans rose $60 billion, and consumer installment loans increased by $30 billion.

"There has been an across-the-board surge of loans," said Mr. Heller. "There has been some robustness in commercial loans over securitizations."

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