Superregional banks, which bailed out of overseas lending a decade ago, have plunged back in.

The 10 largest regionals last year increased their loans and securities investments in emerging markets by 21%, to nearly $9.5 billion, according an analysis by Brown Brothers Harriman & Co.

That compares with a rise of 8% at a group of 140 U.S. banks, to $77.8 billion. Money-center banks, which account for the bulk of the loans and investments, increased their holdings only 3%, to about $60 billion.

Superregionals "are clearly becoming more active in emerging markets," said the report's author, Brown Brothers analyst Raphael Soifer.

Mr. Soifer added he expected regionals to increase their involvement in international lending as they get bigger and compete more with money-center banks.

Lending to developing countries has been a sensitive point for banks since the 1980s, when many countries defaulted on their borrowings, forcing banks to write off billions of dollars.

Since 1991, however, bank exposure to borrowers from such countries has been steadily climbing back up, triggering alarm among some analysts that banks might be heading for a rerun of the 1980s.

At yearend, Mr. Soifer observed, emerging market exposure among the seven money-center banks came to 113% of their common tangible equity and 3.4 times their pretax 1994 profits.

Real exposure, Mr. Soifer said, may actually be higher than reported, because off-balance-sheet items like derivatives transactions are not included. Also, loans and other financings may fall below the 0.75% minimum at which the Securities and Exchange Commission requires banks to release information about their borrowers.

In addition, banks do not report trading exposure or exposure at their investment banking subsidiaries.

"Citicorp and Bank of America have both improved their disclosures, but other banks are still practicing stealth lending," Mr. Soifer said. "And the portion which is stealthy has been going up steadily."

The analyst noted that the some $40 billion reported by major U.S. banks as emerging-market exposure compares with $60 billion in exposure that was confidentially reported to the Fed.

As a result of improved disclosure, Brown Brothers added, BankAmerica Corp. reported $8.1 billion as of March 31, compared with $6.7 billion at yearend. Citicorp's exposure declined to $18.8 billion at March 31 from $19.6 billion at yearend.

The two banks represent the largest lenders to developing countries, with a combined $5.677 billion in lending to Mexico alone.

Among other large lenders, Chemical Banking Corp. had $4.8 billion in emerging market exposure at yearend; Chase Manhattan Corp. had $3.6 billion; while Bankers Trust New York Corp. and J.P. Morgan & Co. each had $2.5 billion.

According to Brown Brothers, the risks posed by emerging-market exposure should not be underestimated, particularly if they are attached to derivatives-related operations.

Emerging-market derivatives trading at Bankers Trust was mainly responsible for a first-quarter risk management loss of $122 million and a $36 million trading loss.

Losses in other emerging market securities held by banks reached into the hundreds of millions of dollars following the Mexican financial crisis that began in December.

"We no longer have to persuade anyone, as we sometimes found ourselves doing last October and November, that cross-border exposure to emerging markets can be risky," the report stated.

Major banks declined to comment on the Brown Brothers study pending a review of its contents. However, Peter Magnani, a spokesman for BankAmerica, said his bank saw no grounds for concern.

"We're well diversified by country, two-thirds of the amount is short term debt, and unlike the situation that developed in the '70s and '80s, it's practically all private-sector debt."

"We're also been very selective and I'd say that our credit policies have been pretty conservative."

Some analysts also disputed played down Brown Brothers' concerns.

"It's worth keeping track of, but most Latin American markets are in reasonably good shape, borrowers are dramatically stronger, and I don't think there are real problems," said Lawrence W. Cohn, a banking analyst at PaineWebber Inc.

Mr. Cohn pointed out that a substantial portion of what appears to be cross-border exposure is actually local exposure, since large amounts of dollar-based lending by some U.S. banks in Latin America is locally funded.

In addition, he said, much of the increase in lending is in short-term trade finance loans which can be quickly scaled back.

Contrary to the early 1980s, when banks extended large medium-term and long-term loans to borrowers in developing countries, he said, "there's very little honest-to-God medium-term lending going on."

"The world is not without risks and banks don't have much credibility left, but I think it's unfair to say the industry has forgotten the lessons of the last cycle," Mr. Cohn commented.

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