Aggregate second-quarter lending.by U.S. money-center banks fell for the fourteenth consecutive quarter, according to data compiled by Lehman Brothers.
Lending by money-centers fell 0.6%, or slightly more than half a percent, from the first quarter of this year to $386.2 billion.
In contrast, lending grew at an 8% average annual rate at regional banks, up from a 5% increase in the first quarter and 6% in the fourth quarter of 1993.
Among money-centers, the biggest decline in lending came at Republic New York Corp., where loans fell 5% to $9.87 billion.
J.P. Morgan Down 4.3%
Lending fell 4.3% at J.P. Morgan, to $26 billion; 3.2% at Bankers Trust Corp., to $13 billion; and 1.1% at Chase Manhattan Corp,, to $61.3 billion.
Lending also fell by half a percent at Chemical Banking Corp., to $74.5 billion.
Bank of New York Corp., Citicorp, Continental Bank Corp., and First Chicago Corp. all posted slight increases in lending.
Among big banks, Citicorp remained by far the biggest lender with $138 billion in outstanding loans, followed. by Chemical and Chase Manhattan.
Old Kent Gained 6.8%
Among midsize to large regional banks, Old Kent posted the biggest increase in lending, with loans up 6.8% in the second quarter, to $5.5 billion, followed by SouthTrust Corp., with a 6% increase to $9.6 billion.
James M. Rosenberg, a Lehman Brothers analyst in New York, attributed the money-center decline to a reduction in bank borrowings by big corporate customers and an unwillingness to increase lending until banks have worked out their remaining real estate problem loans.
"Money-centers are more weighted toward large corporate customers who have the most access to the capital markets," Mr. Rosenberg noted.
The analyst also said that even if lending has grown at regional banks, the growth has been slower than the double-digit increases recorded in previous economic recoveries.
Cost Cutting Continues
He attributed the slower-than-normal increase to continued cost cutting at many corporations and erratic patterns in.the economic recovery.
"Its a mixed and unusual recovery," Mr. Rosenberg said. "A lot of segments are experiencing a very strong, healthy recovery. But at the same time you have other segments of the industrial U.S. cutting back and trying to become more efficient."
Lehman also predicted the long decline in lending at money-centers may finally "have run its course. Increasing credit card outstandings having helped fuel flat-to-up volume at four of nine money center banks during the past six months," the investment bank said.