Chase Manhattan Corp.'s second-quarter profits were up 32% to $307 million, as weak trading revenue was offset by strong fee income, improved asset quality, and several one-time gains.
Trading revenue fell for the second straight quarter, down 16% to $151 million versus $179 million in the first quarter, and down 19% from 1993 second quarter revenue of $187 million.
But trading revenue at Chase was not hit as hard as at J.P. Morgan & Co., where second-quarter trading revenue plunged 56% to $228 million from the year-earlier quarter, in earnings reported last week.
Acceptable in Context
Chase's trading revenue "was less than we'd have expected a few weeks ago, but in light of what other firms are reporting it's not so bad," said Raphael Soifer, securities analyst at Brown Brothers Harriman.
Chase's per-share earnings of $1.46 were higher than the analysts' consensus estimate of $1.28, as compiled by First Call.
But analysts said that if one-time gains were excluded, Chase's operating earnings were more closely in line with estimates. Chase's profits included pretax gains of $55 million from the sale of Chase Arizona to First Interstate Bank,.and of $15 million from the accelerated disposition of problem real estate.
Chase took a lower provision for possible credit losses of $150 million, down $75 million from a year ago, and nonperforming assets declined, including a 28% decrease in commercial real estate nonperforming assets.
Trading Income Slips
Chase reported foreign exchange revenue of $78 million, down 8% from $85 million reported in the second quarter of 1993, while revenue from trading in Chase's own account was $73 million, down 28% from $102 million in the year-earlier quarter.
"Client-driven trading activity was strong across the industry, but it was concentrated in less profitable products" like simple swaps, than in earlier quarters, Mr. Soifer said.
Fees and commissions were up 24% to $480 million for the quarter, compared with $388 million in the year-earlier quarter.
Consumer Banking Profitable
Consumer banking fees, including credit card and mortgage banking fees, increased the most, by 44%, to $164 million.
Trust and fiduciary. fee income was up 26% to $140 million, and investment banking fees were up 27% to $68 million.
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