Two U.S. banking companies - J.P. Morgan & Co. and Citigroup Inc. - were among the top 10 advisers to the booming, global merger-and-acquisition market in 1999, according to data released last week by Thomson Financial Securities Data.

Chase Manhattan Corp., however, dropped off the list, coming in 11th.

The volume of transactions was huge, at an all-time high of $3.1 trillion, up from $2.6 trillion in 1998.

The results indicate that J.P. Morgan's bold move of spending billions of dollars over the last decade to build an investment bank from scratch is bearing fruit, analysts said. It has entered the elite among investment banking firms, ranking fifth this year, just behind fourth-ranked Credit Suisse First Boston. Morgan advised on deals worth $514 billion, up from $316 billion. Credit Suisse advised on $527 billion of deals, up from $372 billion.

Citigroup is another story. Volume at its Salomon Smith Barney investment banking unit actually dropped a bit, to $456 billion, from $483 billion in 1998. Citigroup representatives were unavailable for comment, but analysts said last year's figures were inflated because they included $70 billion involved in the merger between Salomon Smith Barney's parent, Travelers Group, and Citicorp.

If that were excluded, the rise in Salomon Smith Barney was only 10%, compared with a 19% rise in the entire market. Some analysts attributed Salomon Smith Barney's lackluster performance to problems Citigroup encountered in digesting the investment banking unit.

Analysts pointed to the sudden departure earlier this year of Jamie Dimon, who had headed Salomon Smith Barney. At the time, Sanford I. Weill, Citigroup's co-chairman and chief executive, said the integration was proceeding too slowly.

The results show that M&A activity was especially robust outside the United States. In its release, Thomson Financial Securities Data described M&A activity in the United States as "tempered" but said that "deals flourished in Europe and in other regions as acquirers sought entrée into new global markets."

Goldman, Sachs & Co. again ranked as the top adviser, with nearly $1.3 trillion in deals. Morgan Stanley Dean Witter came in second, with over $1.1 trillion, and Merrill Lynch & Co. was third, with slightly over $1 trillion.

Deutsche Bank AG, which acquired Bankers Trust Corp. a year ago, ranked 10th, with $291 billion of deals.

Banking sources predicted that activity could surge again early next year, because many deals have been put on hold to avoid computer problems related to the year-2000 date change. Also, pooling-of-interest accounting, in which acquirers have not been required to write off premiums paid in acquisitions, is expected to be eliminated next year, and U.S. companies are expected to rush to merge before that happens.

After that, the accounting changes will not have much effect, said Rick Escherich, head of mergers and acquisitions research at J.P. Morgan. "The market will adjust, and although the changes may alter the short-term landscape, we don't think they will have a big impact."

Global mergers and acquisitions in the banking sector proved to be particularly dynamic in 1999, with nearly 900 deals, valued at over $297 billion, announced worldwide.

Though banking was second after telecommunications in mergers and acquisitions, activity fell 20% from 1998's level of $379 billion.

"Obviously, the level of activity in the banking sector was impacted by some of the very large deals, such as the Citicorp-Travelers' mega-transaction, in 1998," Mr. Escherich noted.

Over all, merger activity rose more slowly in the United States than in other regions of the world, climbing only 5%, to $1.72 trillion. Mergers soared in Europe, more than doubling, to $1.2 trillion, and Asian M&A activity surged to $162 billion, from $77 billion in 1998, as economies there rebounded from the 1997-98 crash.

Neither Chase Manhattan Corp. nor Bank of America Corp., the second- and third-biggest U.S. commercial banking companies, made it into the league tables. Raphael Soifer, an analyst at Brown Brothers Harriman & Co., said that though Chase has been trying to build up its M&A activity, it will have a tough time cracking the top players' stranglehold.

But he noted that Chase plays a major role in organizing syndicated loans and thus has a major advantage.

"They are the leader in financing acquisitions," Mr. Soifer said, "and anyone wanting to do a major acquisition will probably want to talk to Chase at an early stage."

This year Chase acquired Hambrecht & Quist, a San Francisco brokerage firm specializing in the media, telecommunications, health-care, pharmaceuticals, and high-technology sectors.

Bank of America owns Montgomery Securities, another San Francisco-based investment bank geared to high-tech companies.

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