Firstar Corp. is ending its stint as one of the few banking companies that only runs no-load mutual funds.

The Milwaukee-based company has received approval from the Securities and Exchange Commission to split its Portico Funds family into no-load institutional shares and new retail shares with front-end sales charges of 2% to 4%.

The bank hopes the new structure will give its brokers an incentive to sell more Portico funds to retail investors.

"Our focus all along has been a long-term goal to increase our retail assets under management," said Geoffrey G. Maclay Jr., president of Firstar Investment Services.

The Portico family, launched in 1989, has $2.6 billion of assets in 15 portfolios. The bank sells the funds through its trust department and through its retail brokerage, Elan Investment Services.

But the vast majority of the sales have been through the trust department. The retail brokerage, which employs 110 full-time brokers, has made more sales of other companies' mutual funds, including those from GT Global, Fidelity Investments, Putnam Financial Services, and Capital Research and Management.

These brokers serve Firstar's more than 200 branches as well as some of its smaller correspondent banks. The no-load institutional shares will be sold by the trust departments. The brokerage unit will sell the new retail shares.

This means that these brokers will keep a portion of the 4% sales load that will be levied for equity and balanced portfolios, and a portion of the 2% load that will be charged for bond portfolios. They are slated to begin selling the retail funds in January.

At least one Firstar broker is looking forward to the new class of shares. This broker, who asked not to be named, noted that the Portico funds are on his "preferred list" but that he hasn't sold any of them.

"There's no incentive," he said.

But the broker added that he may get more enthusiastic about selling the Portico funds after the new sales load is adopted.

Industry experts said Firstar's decision highlights the fierce competition banks face for brokers' shelf space.

According to Lipper Analytical Services Inc., Summit, N.J., as of August only 20 of the 118 banking companies running their own mutual funds only operated no-load funds.

But Mary McAvity, a consultant with Boston-based Cerulli Associates, noted that some banks have had to abandon no-load structures.

The most notable example, she said, was Chase Manhattan Corp., which began charging a front-end sales load for its Vista family in 1991. The Vista funds are now the most widely distributed bank proprietary funds in the country, with nearly 900 outside brokerages and banks selling them, Ms. McAvity said.

Mr. Maclay said the new retail shares are just part of the bank's effort to more tightly integrate its retail and trust businesses and to strengthen its brokerage division.

Other efforts have been aimed at making back-office operations more efficient, including such things as the centralization of record keeping, order taking, and tax return and statement preparation activities.

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