Continuing losses in credit card portfolios and merger-related costs dampened profits at three of the nation's largest banks reporting Tuesday.

Chase Manhattan Corp. said it earned $836 million in the fourth quarter, a meager 1% gain from the previous year. Net credit card chargeoffs reached $311 million at the nation's largest bank, or 5.11% of average managed card receivables.

Credit card losses also mounted at Citicorp, contributing to a 20% drop in card profits worldwide. Fourth-quarter earnings at the nation's second- largest bank rose 9%, to $987 million.

San Francisco-based Wells Fargo & Co., meanwhile, said it earned $123 million in the fourth period, less than half what analysts had expected. Card chargeoffs of $101 million were one culprit, coupled with expenses related to the integration of First Interstate Bancorp.

"The credit environment in the consumer area was a negative," said John S. Reed, Citicorp's chairman, at a press conference Tuesday.

"Everybody's credit card losses continue to climb," said Lawrence Cohn, an analyst at PaineWebber Inc. "We can't find any management any place that thinks that card losses will peak before the second half of this year."

Ronald Mandle of Sanford C. Bernstein & Co. agreed. "Loss ratios will be up on average in 1997, but the rate of increase will be slower."

Chase Manhattan Corp.

The credit card losses at Chase, which were up from $238 million, or $4.18% of receivables in the same quarter of 1995, combined with a large restructuring charge, put a crimp in otherwise strong operating results.

The $336.6 billion-asset banking company earned $1.74 a share on a fully-diluted basis, compared to $1.73 in the same period of 1995.

When quarterly costs of $104 million related to last year's merger of Chase and Chemical Banking Corp. are removed, the bank's net income rose 9% to $901 million, or $1.88 a share, from $827 million, or $1.73 a share, in last year's fourth quarter. Those results met analysts' estimates compiled by First Call Corp.

Total revenues for the fourth quarter were $3.94 billion, a 2% increase.

Meanwhile, non-interest or fee-related income rose 5% to $1.86 billion. Securities trading revenue rose 14% to $457 million and trust and investment management fees rose 6.2% to $294 million.

Chase shares ended Tuesday unchanged at $92.875.

Citicorp

Fourth quarter earnings at Citicorp totalled $1.97 a share, compared to $1.72 a year earlier. The results were in line with analysts' consensus estimates.

Citicorp has delivered strong top-line growth in recent quarters, largely due to its presence in high-growth emerging markets. Revenues at the $281 billion-asset bank rose to $5.75 billion, up 14% from $5.05 billion in the fourth quarter a year ago.

However, the bank's credit card business in the U.S. continued to disappoint. U.S. bank card chargeoffs continued to climb, rising in the quarter to $608 million or 5.45% of average managed loans. That is up from $550 million, or 5.11%, in the 1996 third quarter, and $414 million, or 3.89%, in 1995's fourth quarter.

Managed U.S. bank card loans that were delinquent 90 days or longer represented 1.9% of the portfolio at the end of the fourth quarter, compared with 1.86% in the third quarter, and 1.66% a year ago.

Despite the fall-off in the credit card business, Citicorp's overall consumer banking earnings grew 3% to $575 million.

Corporate banking earnings rose 23% to $549 million.

"It was a solid year in a relatively difficult environment," Mr. Reed added.

Citicorp shares closed Tuesday's trading at $112.125, up $2.875.

Wells Fargo & Co.

One-time charges of $300 million related to last year's acquisition of First Interstate took investors by surprise at Wells Fargo & Co.

"It looks like they threw everything in there last quarter, including several kitchen sinks, a couple of bathrooms, and a large part of the cellar," said Mr. Mandle, the banking analyst at Sanford C. Bernstein & Co. "But they're on target to hit their expense goals for 1997."

Fourth quarter earnings per share were $1.12 at the $109 billion-asset company. Previous year figures are not comparable because of the merger, the bank said. The deal, which more than doubled the size of Wells, closed on April 1.

Earnings per share were $1.65 below the consensus of analysts' estimates as compiled by First Call Corp. The most conservative estimate, $1.90, was 78 cents higher than Wells' actual earnings.

"They had let people know that there would be an unusually high level of expenses, but there were more of them than people expected," said Raphael Soifer, a banking analyst at Brown Brothers, Harriman & Co.

Included in the one-time expenses were $40 million for severance costs, $20 million for an employee bonus for enduring the effects of the merger, and back-office-related costs, said Cindy Koehn, vice president of investor relations at Wells.

"This was consistent with what we've been talking about throughout the year, which is to be at 50% of our expense target by the time we report our first-quarter 1997 earnings," Ms. Koehn said. "This was a concerted effort to clean things up by yearend."

Wells' shares ended Tuesday's trading up $9, to $288.75.

This article was written by Jacqueline S. Gold, based on reporting by John Kimelman in New York and Chris Rhoads in San Francisco. +++

Wells Fargo & Co. San Francisco Dollar amounts in millions (except per share) Fourth Quarter 4Q96 4Q95 Net income $123.0 $306.0 Per share 1.12 6.29 ROA 0.45% 2.47% ROE 2.99% 34.98% Net interest margin 6.14% 6.08% Net interest income 1,253.0 667.0 Noninterest income 564.0 434.0 Noninterest expense 1,488.0 563.0 Loss provision 70.0 - Net chargeoffs 178.0 78.0 Year to Date 1996 1995 Net income $1,071.0 $1,032.0 Per share 12.21 20.37 ROA 1.15% 2.03% ROE 8.83% 29.70% Net interest margin 6.11% 5.80% Net interest income 4,532.0 2,655.0 Noninterest income 2,200.0 1,324.0 Noninterest expense 4,637.0 2,201.0 Loss provision 105.0 - Net chargeoffs 640.0 288.0 Balance Sheet 12/31/96 12/31/95 Assets $108,888.0 $50,316.0 Deposits 81,821.0 38,982.0 Loans 67,389.0 35,582.0 Reserve/nonp. loans 278.7% 325.0% Nonperf. loans/loans 1.10% 1.60% Nonperf. assets/assets 0.90% 1.50% Nonperf. assets/loans + OREO 1.40% 2.10% Leverage cap. ratio 6.60% 7.50% Tier 1 cap. ratio 7.60% 8.80% Tier 1+2 cap. ratio 11.60% 12.50%

Citicorp New York Dollar amounts in millions (except per share) Fourth Quarter 4Q96 4Q95 Net income $987.0 $905.0 Per share 1.97 1.72 ROA 1.42% 1.35% ROE 20.60% 20.50% Net interest margin 5.28% 4.91% Net interest income 3,484.0 3,106.0 Noninterest income 2,547.0 2,229.0 Noninterest expense 3,281.0 2,818.0 Loss provision 504.0 531.0 Net chargeoffs 454.0 467.0 Year to Date 1996 1995 Net income $3,788.0 $3,464.0 Per share 7.42 6.48 ROA 1.40% 1.29% ROE 20.40% 20.80% Net interest margin NA NA Net interest income 13,428.0 9,984.0 Noninterest income 9,256.0 8,727.0 Noninterest expense 12,197.0 11,102.0 Loss provision 1,926.0 1,991.0 Net chargeoffs 1,726.0 1,692.0 Balance Sheet 12/31/96 12/31/95 Assets $281,018.0 $256,853.0 Deposits 184,955.0 167,131.0 Loans 174,612.0 165,642.0 Reserve/nonp. loans 178% 128% Nonperf. loans/loans 1.80% 2.50% Nonperf. assets/assets 1.50% 2.20% Nonperf. assets/loans + OREO 2.50% 3.30% Leverage cap. ratio NA NA Tier 1 cap. ratio 8.40%* 8.40% Tier 1+2 cap. ratio 12.20%* 12.30%

*Estimated

Chase Manhattan Corp. New York Dollar amounts in millions (except per share) Fourth Quarter 4Q96 4Q95 Net income $836.0 $827.0 Per share 1.74 1.73 ROA 1.08% 1.04% ROE 18.12% 17.33% Net interest margin 3.10% 3.27% Net interest income 2,082.0 2,078.0 Noninterest income 1,856.0 1,765.0 Noninterest expense 2,304.0 2,379.0 Loss provision 182.0 186.0 Net chargeoffs 182.0 186.0 Year to Date 1996 1995 Net income $2,461.0 $2,959.0 Per share 4.94 6.04 ROA 1.12% 0.97% ROE 18.74% 16.27% Net interest margin 3.35% 3.39% Net interest income 8,340.0 8,202.0 Noninterest income 7,512.0 6,758.0 Noninterest expense 9,330.0 9,375.0 Loss provision 897.0 758.0 Net chargeoffs 999.0 840.0 Balance Sheet 12/31/96 12/31/95 Assets $336,100.0 $304,000.0 Deposits 180,900.0 171,500.0 Loans 151,500.0 146,400.0 Reserve/nonp. loans 348% 253% Nonperf. loans/loans 0.66% 0.99% Nonperf. assets/assets 0.34% 0.55% Nonperf. assets/loans + OREO 0.74% 1.11% Leverage cap. ratio 6.80% 6.70% Tier 1 cap. ratio 8.20%* 8.20% Tier 1+2 cap. ratio 11.80%* 12.30%

* Estimated ===

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