WASHINGTON - Chase Manhattan Corp. has no plans to follow the U.S. banks that are selling big chunks of problem real estate assets, vice chairman Richard Boyle said.

Chase will sell its problem realty assets piecemeal, he said.

First Chicago Corp. recently said it would speed up sales of $1.4 billion of problem real estate assets, and Fleet Financial Group is mulling a sale of $500 million of such assets. Analysts expect other banks to follow.

"I personally don't see the appetite" for the assets, Mr. Boyle said in an interview here last week at the International Monetary Conference. "We have no plans to do anything similar."

Illquidity Noted

Instead, Chase will sell its problem assets one by one, said Mr. Boyle, Chase's chief credit officer.

"Right now, property markets are impacted by illiquidity and gridlock," he said. Customary capital sources - pension funds, insurance companies and banks - are inactive, he noted.

But a wave of new real estate investment trusts may fill the gap. U.S. property prices may take four years to revive, he said.

Mr. Boyle was one of a small group of bankers who met with Treasury Secretary Nicholas Brady last week to discuss the credit crunch and how banks can encourage lending. He declined to give details of the Brady meeting.

Loan Demand Seen Lacking

Like most bankers, Mr. Boyle says there is no credit crunch, but rather a lack of demand that "is symptomatic of the state of the economy."

"Clearly, it is evident that to live as a bank, you are going to have to lend," he said. "Banks are not hiding from legitimate demand. There is not enough demand."

The best profits, he said, are still in middle-market lending, rather than Treasuries. Bank are being criticized for putting their deposits into Treasury securities instead of lending.

Mr. Boyle said there were few signs that regulators had eased their standards to help spur bank lending. Many banks blame the credit crunch on tight regulation.

"You don't find lax regulators today," Mr. Boyle said. "They cannot practice forbearance. The rules are the rules."

Effects of Rate Cuts

Demand for some consumer loans, including automobile lease and financing and home mortgages, have been spurred by low interest rates, he said.

Last year, Chase originated $5.8 billion of home mortgages. In the first nine months of 1992, he estimated, volume was well over $8 billion.

Mr. Boyle said he had seen no impact on commercial, industrial, or commercial real estate loan demand from lower rates.

The Chase vice chairman said his company had not experienced further deterioration in its own overall credit quality.

Mr. Boyle said he sees some signs of economic recovery. He declined to project third-quarter earnings but suggested that foreign exchange trading revenues may be strong because of large volumes of customer business related to the present currency turmoil and uncertainty.

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