Chase Manhattan Corp. Monday appeared poised to join a select group of commercial banks authorized to underwrite public stock offerings.
At a closed-door meeting yesterday, the Federal Reserve Board considered Chase's application to expand into equity underwriting.
As of press time, no decision had been announced, but it has been expected that Chase would get the go-ahead.
A Chase spokesman declined comment, pending word of the Fed's decision.
The banking company's Chase Securities Inc. subsidiary previously was cleared to underwrite corporate debt offerings.
Chase submitted a formal application for public stock underwriting authority to the Fed in early April.
Among Chase's money-center peers, three other banks have authority to underwrite both debt and equity offerings. They are Bankers Trust New York Corp., Chemical Banking Corp., and J.P. Morgan & Co.
Dauphan Deposit Corp., Deutsche Bank and Republic New York Corp. also have both debt and equity underwriting powers.
As with the other banks, the ability to underwrite stock offerings would represent a potentially significant expansion of Chase's investment-banking product line.
But breaking into the business isn't easy.
Chase will face the "same uphill battle to gain market share against strong, entrenched players," said Diane Glossman, money-center analyst at Salomon Brothers.
Morgan's securities underwriting subsidiary has made "notable headway," Ms. Glossman said, but "not all banks are likely to be equally successful."
Chase runs all of its capital markets businesses in the U.S. through its securities unit, which was set up under Section 20 of the Glass-Steagall Act.
On the corporate debt side of its underwriting business, Chase has been on a hiring binge in recent weeks, tapping Wall Street veterans to fill key posts in its junk-bond department.
The recent hires in the junk bond area have made Chase statements about its ambitions there sound more credible.
It's unclear, though, how aggressive Chase plans to be in recruiting Wall Street veterans to staff up its equity underwriting business.