Duff & Phelps Credit Rating Co. has placed the credit ratings for First Deposit National Bank and Providian National Bank on rating watch for a possible downgrade.

The banks are subsidiaries of Providian Bancorp, Louisville, Ky.

The credit rating agency cited the Dec. 30, 1996, announcement by Providian that it intends to sell its insurance operations to Aegon NV.

Providian Bancorp is expected to be spun off as an independent company to existing Providian Corp. shareholders before the deal with Aegon NV is consummated.

Like the industry, Providian Bancorp has experienced deterioration in asset quality. Duff & Phelps says its "impressive" credit risk management process should keep future deterioration within a manageable range.

The banks possess more than $8 billion in managed receivables, with unsecured credit card receivables responsible for approximately 85% of the portfolio.

Management also is focused on building its home equity lending and secured credit card businesses to diversify the earnings of Providian Bancorp.

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