Chase Manhattan Corp. is exiting the American depositary receipt business as part of a broader plan to eliminate peripheral operations.

"The bank believes it will do better by focusing on its core institutional trust products, where Chase has clear competitive advantages," said a Chase spokeswoman.

The business is the second Chase has recently quit. In May, the bank gave up clearing and execution of worldwide exchange-traded futures.

Depositary receipts, or dollar-denominated negotiable certificates representing shares in a foreign company, are used by companies based outside the United States to list or raise capital on U.S. markets.

Chase entered the business a year ago in an effort to expand its institutional trust operations. In November, the bank reached an agreement with Bank Leumi le Israel to develop a program for Israeli companies.

Subsequently, Chase concluded it would be difficult to take business away from the three longtime players: Citicorp, J.P. Morgan & Co., and Bank of New York Co., which dominate the market.

Hopes to handle depositary receipts for Latin American companies also fell through after the Mexican currency crisis in December sent the emerging debt and equity markets into a tailspin.

Chase is the second institution after Morgan Stanley to give up its ADR operations recently.

Lawrence Cohn, a banking analyst with PaineWebber Inc., said he was not surprised by the move. "The players who are in this are really well entrenched, and they all do a good job," Mr. Cohn said.

"This is an industry which has been consolidating, and a new entrant doesn't have anything vaguely resembling the scale necessary to be competitive," he added.

In an interview at the International Monetary Conference in Seattle, Chase chairman Thomas Labrecque said the bank will continue to focus on building operations where it has a competitive advantage or enough volume to make money. "We will continue to acquire (operations), and we will continue to take things down," he said.

"When an institution tries to be all things to all people, there tend to be risks," Mr. Labrecque observed.

"If you're gong to compete in high-fixed-cost businesses, you need some scale to do it."

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