First Union Corp.'s revelation that its credit card loss rates will remain unexpectedly high for the rest of the year has renewed analysts' worries about the health of bank card portfolios.

First Union, which has $6.4 billion of card loans, announced Monday that it had failed to sell $1.2 billion of high-risk receivables. As a result, its bank card chargeoff ratio will not decline from the 5.85% of the second quarter.

The bank said chargeoffs could go even higher next year.

As recently as July 11, when it reported second-quarter earnings, First Union had been telling analysts it expected chargeoffs to fall to 5% of outstandings by yearend.

Analysts said the decision to abort the receivables sale was a sign of growing investor concerns about credit card problems. Norwest Corp. had sold $1 billion of high-risk receivables earlier in the year.

First Union investor relations spokesman Sean Fox said the bank withdrew the $1.2 billion pool from the market after an internal analysis concluded "we were better off keeping the portfolios ourselves and working them out."

But analysts speculated First Union ran up against a weak market for higher-risk receivables in the wake of recently reported declines in overall consumer credit quality, particularly in card loan portfolios. The market for lower-risk card receivables has been stronger, however.

"It's less likely that banks would be interested in a troubled portfolio at this point in the credit cycle, which narrows the field of possible buyers," said Moshe Orenbuch, an analyst with Sanford C. Bernstein & Co.

"It seems like it's a buyer's market," said R. Harold Schroeder, an analyst with Keefe, Bruyette & Woods Inc. "If you're going to dump a big pot of these on somebody, they're going to push you for a big discount and it may be far more than you're willing to accept at this point."

Among those struggling with higher-than-expected card losses, Bank of New York Co. recently announced a $350 million increase in its loan-loss provision. First Chicago Corp. and Banc One Corp. throttled back dramatically on their card solicitations.

First Union sought to sell $1.2 billion of receivables in two tranches, consisting of accounts solicited nationally in September 1994 and February 1995. First Union has expanded its card portfolio since 1933 by 41%, one of the industry's fastest growth rates.

The Charlotte, N.C., company declined to reveal the loss ratio of its high-risk pool. But analysts and other observers said it was probably in the double-digit range.

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