First Chicago Corp. announced Monday it would take a $625 million charge in the third quarter to write down more than $2.1 billion in troubled real estate assets.

The company said the charge would be partially offset on its income statement by a $300 million special gain resulting from its adoption of market value accounting for its $1.1 billion venture capital portfolio.

Analysts were cautious about the accounting change, but they praised First Chicago's aggressive steps to deal with its problem real estate loans. Although the writedown is expected to result in a roughly $125 million loss in the quarter, the company is expected to report a modest profit for the entire year.

First Chicago closed at $32.75, up $2.125, on Monday.

"The market is looking at this in a positive way, figuring 'let's bury the problems in this year, and look ahead to something positive,'" said Mike Milunovich, a banking analyst at Robert W. Baird & Co., Milwaukee.

John D. Leonard, an analyst at Salomon Brothers Inc., raised his 1994 earning estimates to $4.50 a share from $3.65.

In a news release, First Chicago said it would establish a workout unit to sell the problem real estate assets. The unit will be overseen by a five-person senior management team; the company estimated it would take 24 to 30 months to dispose of the assets.

First Chicago said it would write down the value of its problem real estate assets to 54 cents on the dollar, reflecting their current market value. The assets were previously valued on the company's books at 80 cents on the dollar.

|Reserve and Liquidate' Policy

"The decision to dispose of our lower-quality real estate assets reflects the same philosophy we applied to our troubled-country debt portfolio five years ago -- reserve and liquidate," said chairman and chief executive Richard L. Thomas.

Analysts said First Chicago may have to take additional writedowns if its real estate portfolio continues to deteriorate.

The assets consist of $700 million in nonperforming and $1.4 billion of performing loans.

Although the portfolio is national, there is a heavy concentration of problem assets in Chicago, New York, and California.

These assets have been primarily responsible for First Chicago's poor showing recently. Last year, for example, the $47 billion assets bank reported an anemic return on average assets of 0.16%.

Many analysts expected the bank to establish a "bad bank" in which it could deposit the troubled assets, a tactic pursued by Mellon Bank Corp. and discussed by BankAmerica Corp.

Some Raised Eyebrows

But the bad-bank approach might have been even more costly for First Chicago since additional writedowns might have been necessary to attract investor financing.

Although First Chicago's real estate writedowns were widely applauded, the company's decision to revalue its real estate portfolio raised some eyebrows. First Chicago said the accounting change "is proposed to become the industry accounting standard for investment portfolios."

"That's news to me," said Raphael Soifer of Brown Brothers Harriman & Co., New York. "The only bank that I am aware of that accounts for its venture capital investments that way is Citicorp."

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