St. Paul Federal Bank for Savings may pale in size against behemoths like Wells Fargo and Bank One, but the Chicago thrift holds its own as one of the most effective marketers of variable annuities.

Banks have become the fastest-growing distributors of variable annuities, contributing to what Morningstar estimates is an increase from $23 billion in sales in 1990 to $326 billion in 1996. The historic rise in the stock market is the main spur to this growth, but that only tells part of the story at St. Paul, the largest independent thrift in Illinois. Most of the credit belongs to the $4.6 billion-asset thrift's retail strategy of equipping its 52 branches with an investment adviser, its executives say.

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