National Westminster Bancorp continued on its road to recovery with net third-quarter income of $ 39.4 million.

That compares with net profit of $ 35.8 million in the second quarter and a loss of $65.7 million in the 1991 third quarter.

John Tugwell, chairman and chief executive of the U.S. unit of Britain's National Westminster Bank PLC, attributed the earnings improvement to tight control over expenses, a diversification in banking services, and better core retail and corporate business.

Provisions for loan losses in the first nine months this year fell to $91.5 million, from $479.7 million in the same period of 1991, and net chargeoffs fell to $141.4 million, from $332.4 million.

Non-accruing loans at Sept. 30 totaled $.13 billion, or 8% of total loans, down from 8.92% the year earlier.

Net interest income for the year to date rose 4%, to $547 million, and noninterest income rose 20%, to $242 million, with much of the gain in the latter obtained from the sale of securities. Total assets rose 3.4% to $22.3 billion.

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