Barring other possible megamergers, the combination of Chemical Banking Corp. and Chase Manhattan Corp. will create the largest bank in the United States, ending Citicorp's 13-year run at the top and reshuffling the rankings in numerous industry categories.

The new Chase Manhattan Corp. would have $297 billion of assets, about $40 billion more than Citicorp as of June 30. BankAmerica Corp., which last held the top spot in 1981, had $226 billion at midyear, followed by NationsBank at $184 billion.

But the big merger won't do much to raise U.S. banks' international standing. The new Chase would rank 21st, five places ahead of Citicorp based on yearend 1994 numbers.

Given the rapid pace of change, it may be a while before another banking company leads the U.S. ranking as long as Citicorp did. (Or Chase from 1930 to 1945, which was tops in deposits, ending that period with $5.7 billion.)

Said Edward E. Furash, chairman of Furash & Co. in Washington: "Never count Citicorp out." The New York powerhouse could easily reclaim its title through a merger, he said.

"It will take quite a while for the combined organizations (Chase and Chemical) to redraft their strategies and reintegrate themselves so that they can compete effectively," Mr. Furash said. "In the meantime, Citicorp will continue to do what it's been doing, having restructured itself two years ago.

"The Citicorp brand and its momentum will carry a very substantial influence for a long time."

But Citi will encounter a formidable, bulked-up competitor in many facets of the business. Chase will be No. 1 in mortgage servicing and luxury auto financing; No. 3 in mortgage originations; No. 4 in credit cards; and No. 4 among banks in mutual fund assets. Chase also will add Chemical's existing market-share leadership in the competitive New York metropolitan area.

Chemical and Chase serviced a combined $117 billion of mortgages at yearend, $4 billion more than last year's top servicer, Countrywide Credit Industries of Pasadena, Calif.

With $26.4 billion of home mortgages originated at yearend 1994, the new Chase trails only BankAmerica Corp.

Analysts pointed out that the merger comes at a sensitive time for both mortgage units.

Chemical's mortgage chief, David Frank, resigned in June and has not been replaced. Richard A. Mirro has headed Chase's mortgage unit for just a month, following the July departure of former chief executive Fred B. Koons.

The banks did not disclose who will run the credit card unit, though whoever gets the job will report to Donald L. Boudreau, Chase's vice chairman for consumer banking.

John A. Ward 3d, an executive vice president with a mortgage background, has headed Chase's card business since 1993. By contrast, Charles R. Walsh, Chemical's executive vice president for credit cards, has been in the card business since 1974, beginning at the former Manufacturers Hanover Trust Co.

"Charlie survived the Manny Hanny-Chemical merger; I suspect he will survive this, too," said one industry expert who did not want to be identified.

With $20 billion in card receivables and 11 million active accounts, the new Chase would trail only Citicorp, Dean Witter, Discover & Co., and MBNA Corp.

The proposed merger would create the fourth-largest bank-run mutual fund complex, with combined fund assets of $14 billion under management.

Chase has distinguished itself from other banks by successfully selling its proprietary Vista Funds outside the bank channel. The funds have been among the highest-rated performers in the industry.

The new company will likely build on Vista's brand-name recognition and probably merge the funds with Chemical's own proprietary Hanover Funds, said Eli Neusner, a consultant with Cerulli Associates, Boston.

With the Chase moniker intact, some observers say the new bank will continue its aggressive pursuit of wealthy clients. After the merger, Chase will actively manage more than $101.4 billion of trust assets.

This article includes reporting by William Plasencia, Juliana Ratner, and Karen Talley.

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