Republic New York Corp. reported Wednesday that second-quarter profits were up 6% to $79.4 million. Results benefited from healthy loan growth and a big reduction in loan-loss provisions, offset by weak trading results.

The earnings translated to $1.31 per share, one cent below the consensus estimate compiled by First Call, an affiliate of Thomson Financial Services.

The bank's stock closed down $1 a share, at $45.50.

"There was good news and bad news," said Thomas Hanicy, banking analyst at CS First Boston. "You had good growth in net interest income, but non-interest income was down - that largely reflected trading."

Net interest income was up 7% to $221 million from $198 million in the second quarter of last year. Loans grew 16% over the comparable quarter last year to $9.258 billion. The net interest margin was up to 2.68% from 2.58% a year ago.

Republic reduced its loan-loss provision by 70% to $3 million, from $10 million in the first quarter. The provision was down almost 90% from the second quarter a year ago.

But, as at other New York City banks, trading revenue declined. Noninterest income was $93 million, down from $105 million in the first quarter, and off from $95 million in the second quarter of 1993. Trading revenue accounted for $30.2 million in the second quarter, down 44% from $54.4 million a year ago.

Republic's foreign exchange trading income declined 34% to $21.6 million, compared with $32.8 million in 1993.

Trading account revenue declined to a net loss of $2.7 million in the second quarter, compared with a net gain of $12 million in the first quarter, and of $11.2 million in the second quarter a year ago.

Republic attributed the declines to "lower levels of customer activity in foreign-exchange and derivative products reflecting generally reduced activity in the global markets."

Mr. Hanley said he believed the trading-account loss was due in part to European bond markets selling off U.S. government securities during the quarter.

Revenue from trading in precious metals rose slightly, to $11.2 million.

Republic's operating expenses rose 18% to $191.2 million in the second quarter from a year ago. The bank attributed the increase to acquisitions, the addition of staff in trading, private banking, support areas, and a one-time $17 million restructuring charge.


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