The mortgage banking subsidiaries of two of the nation's largest commercial banks posted wildly different results in 1996.

Net income nearly doubled for Chase Manhattan Corp.'s mortgage unit to $110 million while profits for Fleet Mortgage Group fell from $86 million in 1995 to $69 million last year.

The two companies disclosed these results in their annual 10-K reports, filed with the Securities and Exchange Commission last week.

Neither bank breaks down the mortgage unit's performance in its quarterly earnings report.

Chase Manhattan Mortgage Corp., Edison, N.J., is the third-largest producer of home loans, and Columbia, S.C.-based Fleet Mortgage ranks fourth. Last year, Chase originated $33 billion of mortgages while Fleet funded $22 billion.

The decline in profits at the Fleet unit came despite a 10% increase in mortgage revenues, to $560 million, and a 5% rise in the servicing portfolio, to $122 billion.

Chase's revenues increased slightly, from $636 million in 1995 to $652 million last year. The servicing portfolio was $141 billion at yearend.

The recent purchase of $17 billion in servicing from Source One Mortgage Services brought Chase's portfolio to about $160 billion, making it the second-largest servicer.

Last year was a tumultuous one for Fleet Mortgage on many counts.

Analysts said Fleet Financial's initial profit expectations for the unit were far higher.

Compounding the lender's problems were the departures last year of two different chief executive officers.

But Fleet has taken steps this year to get back on track.

A new management team was appointed in January and the unit recently decided to sell 17 retail branches outside of the parent company's core banking markets. Five of these offices were sold to PNC Bank Corp. last week.

For Chase, net income wasn't the only area of significant improvement.

Return on common equity, another measure of profitability, increased from 2.7% in 1995 to 8.3% last year.

Thomas Jacob, Chase Manhattan Mortgage's chairman and chief executive officer, said one of the main factors fueling his company's earnings increase was "a significant expense reduction" resulting from last year's merger of Chase and Chemical Banking Corp.

About a third of the company's mortgage branches were closed because of overlap.

Mr. Jacob declined to disclose specific targets for Chase Manhattan Mortgage for this year but a Chase spokesman said the unit was expected to meet the parent's expectations for net income and return on equity.

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