Most of the leading players in the niche business of helping banks market and manage mutual funds grew in the third quarter, despite lackluster markets.

All but one of the top five administrators of bank mutual funds posted modest increases in the assets they serviced in the three months ending Sept. 30, according to researcher Lipper Analytical Services Inc., Summit, N.J.,

The sole exception, PNC Bank Corp.'s PFPC unit, suffered a decline of $2 billion, principally because of the loss of a co-administrator contract for a Comerica Inc. fund family.

PFPC, with $23.8 billion of assets, was the second largest administrator of bank mutual funds, after Concord Holding Corp., which increased its assets under administration by $1.7 billion, to $29.3 billion.

The rankings of the five largest bank fund administrators remained unchanged, with Stephens Inc., First Data Corp.'s Shareholder Services Group, and SEI Corp. rounding out the list.

But the apparent calm belied a growing sense among many that the administrator business is on the brink of a merger-driven shakeup.

For starters, acquisitions by banks have rattled administrators, which help fund managers market their funds and make regulatory filings.

For example, Mellon Bank Corp.'s acquisitions in the past two years of Dreyfus Corp. and the Boston Co. have set off a chain reaction of restructurings. The deals led to Shareholder Services Group taking over most of the administration the Boston Co. had handled for other companies' mutual funds.

Likewise, the deals have led to the handing off of distribution work for the Mellon and Dreyfus mutual funds to Funds Distributor Inc., a Boston-based start-up pieced together by former Boston Co. executives.

This deal was done because the Glass-steagall Act prohibits banks from distributing their own mutual funds. Instead, banks must hire Nonbanks -- usually their administrators. But Funds Distributor has taken a different tack by eschewing the administration business.

One list aspect of the Dreyfus deal was wrapped up in the third quarter. Specifically, Mellon stopped using Frank Russell Investment Management Co. to administer its Laurel Funds, and handed the work to Dreyfus, which also administers the Dreyfus funds.

Dreyfus isn't included in the Lipper rankings of administrators because it doesn't break out its internal administration contracts in data it publicly discloses.

Now many experts say mergers and acquisitions may start popping among servicers of bank mutual funds, including administrators and distributors.

"Consolidation is not only going on with fund companies, but it is beginning with fund service organizations," said George A. Rio, a vice president of Shareholder Services, Boston.

Shareholder Services, Mr. Rio said, will be among the acquirers. Indeed, the company last month disclosed a letter of intent to acquire a majority. of 440 Financial Group, a Worcester, Mass.-based administrator with clients including Bane One Corp. and Fleet Financial Group.

Mr. Rio said Shareholder Services is eyeing other acquisitions. The highest priority is on using acquisitions or partnerships to get into the mutual fund custody business -- where so-called custodians hold securities for mutual fund portfolios,

An acquisition in this area could put Shareholder and First Data in competition with the leaders in mutual fund custody, including State Street Boston Corp. and Chase Manhattan Corp.

For its part, Chase has now become a competitor of Shareholder Services and other administrators, by virtue of its agreement last month to acquire the securities processing businesses of U.S. Trust Corp., New York.

This deal gives Chase control of a U.S. Trust unit that administers and acts as a transfer agent for mutual funds.

Funds Distributor also has been mentioned as an acquisition candidate by administrators who think its strategy of sticking only to fund distribution isn't viable.

But an acquisition isn't in the cards, said Marie Connolly, president of Funds Distributor.

"There have been different firms who have expressed interest in either buying Funds Distributor, or having exclusive relationships," with the company, Ms. Connolly said.

"For now, our plan -- and our whole focus -- is on growing our business as an independent firm," she added. "We're not talking about any joint ventures or acquisitions."Top Administrators of Bank Mutual Funds* Bank mutual fund assets aministered BiggestCompany (in billion) bank clientConcord Holding Corp. $29.3 BankAmericaPFPC Inc. $28.8 PNC Bank Corp.Stephens Inc. $23.5 NationsBank**The Shareholder Services Group $23.5 NationsBank*SEI Corp. $21.4 SunTrust* as of Sept. 30.** co-administrators for NaionsBank's mutual fundsSource: Lipper Analytical Services Inc.

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