Corporate cutbacks have shaved - and in many cases pared to the bone - banks' budgets for art purchases.

Collecting art is often considered a luxury, and frequently it is among the first items to be wiped from the expense sheet.

"We are not purchasing new art," said Richard Howe, a Citibank vice president. "We're reusing the art we have."

To restore profit levels, he explained, Citibank has implemented a two-year plan to cut costs. Art purchases simply do not fall within the plan, he said.

And since the Citicorp unit has been consolidating offices, there are fewer places to hang art - a further reason not to buy more.

Program Suspended

The First National Bank of Chicago, whose 6,000-piece collection spans the time line from antiquity to 1990, suspended art acquisitions two years ago.

Last year, in a companywide downsizing that trimmed 1,000 employees, the art program's

But John Hallmark Neff, director of the art program, is pleased that the bank made a commitment to maintain and preserve the collection.

The expense is modest, he said. "The art has been paid for, it's framed, and it's on the walls."

"We like to think of it as part of the bank's wellness program," Mr. Neff said. The bank's collection "was never intended as an investment, but to contribute to the overall work environment."

Some Art Donated

Despite pressure to increase revenues, the bank has never sold any of its art. However, some has been donated to hospitals through the bank's foundation, Mr. Neff said.

Ever since the bank stopped acquiring art, the staff has been upgrading documentation of the collection and making a detailed evaluation for insurance purposes.

A Blow to Artists

Since the staff is so small, two student interns from the School of the Art Institute of Chicago have been brought in to help.

Curators and their staffs are not the only ones to suffer when money for art purchases dries up. The withdrawal of corporations from the art market "has had a significant impact on artists and dealers," Mr. Neff observed.

Besides managing the art department staff, Mr. Neff gives lectures detailing the history and content of the art collection to the bank's customers, executives, and tour groups.

He has given lectures to employee groups in the past and hopes to rekindle that interest.

"I was sent a petition with over 60 signatures from one department requesting the reinstatement of art lectures. The bank has been very encouraging about it." he said.

"Education is key to the art program. There are many new hires coming into the corporation who were simply unfamiliar with the history of the collection and its purpose."

Chase Still Buying

Yet there are some banks that continue to make art acquisitions. One is Chase Manhattan Bank.

"We're in an expense-reduction mode. but we're still making acquisitions." confirmed Manuel E. Gonzalez, vice president and executive director of the Chase art program.

"We have 13,200 pieces in the collection, which we're editing and honing but at the same time keeping open-ended.

"We're still buying, and we're buying a lot of younger artists' work."

Mr. Gonzalez, who has spent more than 20 years in the New York art world, is overseeing the acquisition and setup of work by Dan Flavin and Nam June Paik.

Their creations will be displayed in the lobbies of the Chase MetroTech Center, the Brooklyn, N.Y.-site that houses the bank's technology-based businesses and computer operations.

Top Shows Scheduled

Although Mr. Gonzalez declined to say what the bank paid for this art, he did say the purchases were "very significant."

Mr. Gonzalez holds steadfast to his belief in the value of art in the business world.

"The bank buys art to create a visually stimulating atmosphere for its customers and employees," he said, "as well as to support and give encouragement to the artistic community."

The Hunt for

Southeast's Art

When Miami-base Southeast Bank was seized by the Federal Deposit Insurance Corp. in 1991, its assets included an art collection worth between $6 million and $10 million.

For bankruptcy investigators, rounding up the art has taken on the aura of a spy novel

Searcher Hired

"The collection was widely dispersed over 240 branches in a helter-skelter manner," said William A. Brandt Jr., who was appointed by the bankruptcy court to locate and sell the art collection.

Mr. Brandt works for Development Specialists Inc., an insolvency consulting firm with offices in Miami, Chicago, and London.

All but 100 Items Recovered

Of the 4,400 pieces in the collection, Mr. Brandt and his team of investigators and art curators have recovered 4,300.

They started by prowling closed branches to unearth the art. After all the branches had been searched, Mr. Brandt got bankruptcy court approval to hire a private investigator to comb Florida.

"The investigator has done all he can," Mr. Brandt said. The Federal Bureau of Investigation now has the job of recovering the final 100 missing pieces, worth between $40,000 and $45,000, he said.

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