For the first time, a European securities-clearing network whose biggest banker is Citicorp is on an equal footing with a competing system operated by J.P. Morgan & Co., according to a Wall Street analysts' report.

As a result, Citicorp and other owners may over time generate incremental earnings at the expense of Morgan, according to the report.

Currently, Morgan earns an estimated $300 million from operating Euroclear.

Euroclear Advantage

With the improvement, Cedel, the clearing system whose biggest banker is Citicorp, now can clear securities on the same day that trades are made.

Cedel is based in Luxembourg and owned by more than 100 banks and securities firms.

The clearing house has always been at a disadvantage with regard to Euroclear, which is operated by Morgan under contract.

Both systems were started around 1970. But Euroclear has been able to clear securities half a day earlier than Cedel for many years, which allowed customers to invest their cash earlier than customers 6f Cedel.

Growth Is Rapid

While Euroclear's profitability has been a closely-guarded secret at Morgan, securities sources in Europe claim the system has become an important source of earnings.

The system is also said to be growing rapidly with a rising tide of cross-border securities.

Cedel improved the software it uses to exchange clearing information with Euroclear, giving Cedel customers securities information at 4 a.m. London time.

Euroclear's Market Share

Cedel moved to same-day securities clearance the last week in September.

Euroclear currently has about 70% of the market, said Ian Cormack, managing director for financial institutions, Citicorp. London.

But Cedel's owners expect that with the improved clearing schedule, it should grow quickly.

Ancillary Income

"There's likely to be a reallocation of business from one to the other," said Diane Glossman, an analyst at Salomon Bros.

Ms. Glossman said the result would likely be a leveling of the balance of business between the two, with customers likely to split their business between the two.

According to Salomon Bros.' report, "ancillary income - including deposit balances, foreign-currency trades and custody - created by these (operating) contracts is quite meaningful, and in the past, we correctly have estimated that Euroclear probably contributes on the order of $300-$400 million to Morgan's revenues."

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