Chase to Cut More Jobs Next Year
Chase Manhattan Corp. said Tuesday that it would offset slow revenue growth with more job cuts in 1992.
Chase's chief financial officer, Michael Esposito, told analysts that the nation's third-largest bank company has "no illusions" about a rebound in its business lines. "We don't see any dramatic growth in revenue," he said. "That is what is causing us to take another dramatic look at the expense line."
Mr. Esposito said 1992 expenses would not exceed 1991 expenses, and could be lower. He projected expenses for the current year to be $3.8 billion, down from $3.9 billion in 1990.
Lower Expense Ratio Sought
Chase, he added, wants to reduce expenses as a percentage of revenues to 65% from its current level of 69%.
The job cuts would probably not come from wholesale firings but more from "orderly attritions" and "maybe the closing of a unit or two," he said.
Chase has eliminated 6,060 jobs from its payroll since it took a $650 million restructuring charge in the third quarter of 1990. But the company added another 1,135 employees as a result of its acquisition of Bridgeport, Conn.-based Citytrust Bancorp and Mechanics and Farmers Savings Bank in August.
$150 Million in Cuts Likely
Mr. Esposito would not project how many new layoffs may occur. He concurred with one analyst's estimate that the company would cut another $150 million out of expenses in 1992.
That could translate into another 2,000 layoffs, another analyst estimated. At the end of the third quarter, Chase employed 38,475 people.
Separately, Mr. Esposito predicted that credit card delinquencies are peaking.
On the commercial real estate front, he predicted that losses would continue to hurt the company even after nonperforming assets peak. He said he hopes to see the rate of growth in nonperformers level off within the next six to nine months.
Chase reported on Monday earnings of $136 million, or 79 cents a share, slightly ahead of analysts' expectations. The company booked $25 to $30 million in tax benefits, Mr. Esposito confirmed, in response to an analyst's question.
He said Chase has $750 million in unused tax benefits remaining.
He also said that Chase would probably book about $30 million to $40 million of interest from Brazilian loans in the fourth quarter. The company reported $45 million of Brazilian loan interest in the third quarter.
