SAN FRANCISO - Pacific Century Financial Corp., which said last week that its earnings would be hit by increased credit provisions for bad loans, will have a new chief credit officer by yearend.

Robert Paris, who currently holds that position, has told executives that he will retire. The company is searching "internally and externally" for a successor, said Richard J. Dahl, president of the Honolulu holding company for Bank of Hawaii, the state's largest bank.

Mr. Paris' plan to retire was "not connected to the earnings announcement," Mr. Dahl said. Staff changes in the unit that analyzes credit risk will not take place immediately, he said.

However, he admitted in a telephone interview that a new chief credit officer "presents a new opportunity for people to make some changes."

The $14.3 billion-asset holding company had already touched on the question of personnel and its credit quality in the wake of its disappointing earnings report this month. Executives tried to reassure investors that they were doing everything in their power to clean up the company's spotty loan book.

Pacific Century's second-quarter net income plunged 81%, largely because of an $83.4 million credit provision to cover higher loan losses and nonperforming assets, it said. Its stock, which uses the ticker symbol BOH, has fallen 6% since the earnings report last Thursday.

"I want to emphasize that significant action in the second quarter has not been taken lightly," Lawrence M. Johnson, Pacific Century chairman and chief executive officer, said in a conference call last week.

In addition to a review of the loan portfolio, "reporting relationships have been realigned, which provides very senior lending persons the ability to dedicate substantial time and effort to focus on lending problems," Mr. Johnson told analysts.

Analysts have questioned whether a company of Pacific's size should be so extended in regions and loan markets that can disrupt earnings at the country's largest banks. Pacific Century has pursued an expansion strategy concentrated on Hawaii, the islands of the South Pacific, and commercial banking in Asia. It also owns a small commercial bank in Southern California.

"For their size, having exposure in syndicated portfolios and the Far East makes them susceptible to these kinds of losses," said Brian Harvey, an analyst at Fox-Pitt, Kelton.

Like many other regional banks, Pacific Century said a large part of its loan problems this past quarter came from its participation in syndicated loans, particularly noninvestment-grade ones.

The company said it will accelerate its reduction of the level of noncustomer-related commitments in its syndicated loan portfolio, currently at about 40%. The portfolio has $1.3 billion of loans outstanding and $3.7 billion of commitments.

But in many ways Pacific Century is still reeling from past credit crises.

Two of its writedowns, worth $5.2 million, are related to loans made in late 1996 and 1997 to Chinese provincial trust companies. The loans had already been classified as nonperforming when those quasi-state entities floundered during the Asian financial crisis of 1998. When the Chinese government made more information available to their creditors about repayment of those companies' outstanding debt, Pacific Century decided to write down the loans.

In this most recent earnings season Pacific Century was also haunted by net chargeoffs from Hawaiian commercial real estate, a sector that has been hard hit the last few years.

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