The value of bank stocks held by the industry's top 25 institutional investors jumped 8.21% in the first quarter as market professionals sought bargains after last fall's market slide.

The 25 shareholders upped their overall stake in banks by $21.7 billion during the quarter, to $264 billion. Holdings of the top 50 investors rose 6.22%, to $342 billion.

The percentage growth as tracked for American Banker by Thomson Financial Securities Data from filings with the Securities and Exchange Commission was the strongest in seven quarters. (Tables appear on pages 28 and 29.)

These professional investors raised their collective stake in Citigroup Inc. by 4.4%, to $91.7 billion. Ownership of Bank One Corp. advanced 3.3%, to $39.1 billion, while the aggregate stake in MBNA Corp. jumped 6.4%, to $14.1 billion.

After a tumultuous selloff in the third and early fourth quarters, banks showed up as bargains on investors' radar screens, especially compared with the high price-to-earnings multiples of other sectors, said Scott Edgar, director of research for the $1.1 billion-asset Sife Fund.

"It has probably been the area of the market people have looked to for some growth in value in share prices," said Mr. Edgar, whose employer is based in of Walnut Creek, Calif.

The value of bank stocks held by the biggest investor in them, Fidelity Management and Research Corp., rose 13.8% in the first quarter, to $29.1 billion. Bank holdings of Bankers Trust Corp. rose 3.7%, to $15.7 billion, while those of Wellington Management Co. surged 86.3%, to $7.1 billion. TIAA-CREF Investment Management-previously unranked-joined the top 50 ranking, with $7.9 billion.

The largest 15 institutional investors were also notably bullish on thrift stocks, as the aggregate value of their holdings rose 5.74%, to $15.2 billion. Fidelity's holdings increased 16.1%, to $2.9 billion; Barclays Bank PLC's 4.7%, to $1.4 billion; and Putman Investment Management's 46%, to $1.1 billion.

But the institutions also cut holdings in some banks. Ownership of First Union Corp., whose shares were besieged after a January cut in earnings projections, decreased 3.1%, to $27.5 billion. The Charlotte, N.C.-based superregional has since reduced expectations further.

Institutional holdings of National City Corp. dropped 5.4%, to $10.5 billion, as the Cleveland bank's own shares slid 8%.

The first-quarter spurt in institutional holdings of bank and thrift stocks may have been a response to last fall's plunge in financial sector prices, particularly those of banks with foreign exposure, said Stephen Berman, a buy-side industry analyst for Stein Roe & Farnham Inc.

Institutions that had lightened their portfolio positions may have had second thoughts after some major banks reporting strong fourth-quarter earnings in mid-January.

"There may have been a lot of people who had bailed out of banks that hadn't bothered to get back in," Mr. Berman said.

In the first quarter, institutions tended to favor banks with large market capitalization, passing up values among smaller banks, said industry analyst Thomas Finucane of John Hancock Advisors in Boston.

He noted that a Keefe, Bruyette & Woods Inc. index of 24 top money- center and regional banks rose 5% during the quarter while the broader- based Standard & Poor's bank stock index was nearly flat.

"By and large it was the large-caps that led the charge," Mr. Finucane said.

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