Fears that the Mexican currency crisis could imperil some U.S. banks' Latin American operations took hold in the stock market last week, but bank issues bounced back smartly.

Citicorp and Bank of Boston Corp. were hardest hit because of their high visibility in the region.

But the selloff also affected a number of banks with strong Texas systems, as investors worried that the state's economy would be vulnerable to the financial turmoil across the border.

Analysts, after reducing Citicorp earnings estimates by a few cents, quickly downplayed the Mexican government's devaluation of the peso.

And the markets found additional reassurance in a statement from Citicorp's vice chairman, William Rhodes, that the Mexican government's actions would stimulate growth and investment.

Concerns that the situation could be repeated in other emerging markets, such as Argentina and Brazil, were most troubling for the large New York moneycenters with cross-border trading desks, analysts said

"Citicorp has a local-currency business, so it does not need to take a lot of risk trading Brady bonds, LDC debt in New York," said Frank R. DeSantis of Donaldson, Lufkin & Jenrette. "But if you look at other major moneycenter banks, it is just the opposite."

Those banks that could take hits because of trading losses include Bankers Trust New York Corp., J.P. Morgan & Co., and, to a lesser extent, Chase Manhattan Corp., he said.

But it was Citicorp, which says it was fully hedged against the currency plunge, that took the hardest hit last week. More than 4.6 million Citicorp shares were traded on Thursday, including one million that were dumped by a single investor. The identity of that seller is unknown.

Analysts said the fears were overblown.

Mr. DeSantis predicted the impact of devaluation on Citicorp's fourth-quarter earnings would be modest, perhaps amounting to 3 cents per share.

Oppenheimer & Co., S.G Warburg & Co., PaineWebber, and Lehman Brothers also reduced their fourth-quarter estimates on Citicorp by just a few cents.

Banks with a strong presence in Texas -- including BankAmerica Corp., NationsBank Corp., and Compass Bancshares -- also were hit hard in midweek trading.

But they too rebounded in Friday's trading.

"There is no reason the devaluation will have an earnings impact on these banks," said Anthony Davis of Dean Witter Reynolds Inc.

Similarly, Bank of Boston shares fell on the news, but began recovering by Friday.

The company has sufficient capital to absorb the unrealized losses, and should continue making money in South America, said Henry Dickson of Smith Barney Inc., who maintained his fourth-quarter earnings estimates.

And long term, Bank of Boston's Latin American business should continue to be profitable, unless the currency crisis spreads more than expected, and wreaks havoc on all of South America's economies, added Thomas Theurkauf of Keefe, Bruyette & Woods Inc.

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