Analysts are expecting strong gains in first-quarter earnings at the nation's biggest banks, fueled by improvements in loan growth, asset management, and corporate finance.

Results for the period should compare favorably to the last quarter of 1997, especially for banks with exposure to problems in Southeast Asia.

"It's steady upward progress," said Michael Mayo, an analyst at Credit Suisse First Boston. Earnings this quarter will look good compared to the fourth quarter when banks took charges to clean up their balance sheets. Banks are also motivated to spruce up their earnings in this period of consolidation, he added.

In addition, analysts said they expect an average 14% gain in year-over- year earnings per share.

"It will be a very good quarter in general," said Anthony Davis, an analyst at SBC Warburg Dillon Reed. "Concerns about Asia, the flattening yield curve, and year-2000 expenses have begun to lessen."

Pittsburgh-based Mellon Bank Corp., with $44.3 billion of assets, is expected to show a 10% jump in first-quarter earnings per share, fueled by a projected 60% rise in mutual fund sales, Mr. Davis said.

San Francisco-based BankAmerica Corp., with $258.6 billion of assets, is expected to show a 9.5% gain in earnings per share, to $1.15, largely on fees from loan syndications.

The outlook for the rest of 1998 also remains positive, analysts said, despite continued concern about credit exposure to Asia and higher technology expenses.

Asian woes may plague some money-center banks, but problems are likely to be limited to Chase Manhattan Corp., J.P. Morgan & Co., and Bankers Trust New York Corp.

Morgan, with $262 billion of assets, could get hit hardest. Analysts' consensus estimates put its first-quarter earnings per share at $1.80, off nearly 18% from the year before.

The three New York money-centers are expected to suffer from credit exposure to Indonesia. The banks have already taken their lumps from problems in Korea and Thailand.

"Most banks said they are confident that there will be losses, they just don't know how big they will be yet," said Lawrence Cohn, an analyst at Ryan, Beck & Co.

Bankers Trust and Chase, however, are expected to make up for the losses through revenue from other businesses, particularly corporate finance and advisory, Mr. Cohn said.

Earnings gains for superregional banks, which have limited overseas exposure, are expected to be in the double digits.

Columbus, Ohio-based Banc One Corp., with $116 billion of assets, is expected to show a 33.8% jump in earnings per share, driven by strong revenue growth and lower losses on credit cards, Mr. Mayo said.

Big mortgage originators, including Chase, Fleet Financial Group, and Norwest Corp., are also expected to show gains based on low interest rates and mortgage refinancings, analysts said.

At $88.5 billion-asset Norwest, based in Minneapolis, mortgage originations are running at a record pace, analysts said, and could top $70 billion by yearend. At the end of last year, Norwest had $55 billion of mortgage originations.

Strong consumer loan growth is also expected to send Norwest's first- quarter earnings up, to 47 cents per share, a 10% gain.

At all banks, commercial loans grew 6% to 7% during the first three months of the year, analysts said. But they said much of the income from those loans would be dampened by a narrowing net interest margin.

Mr. Davis calculated that the margin could tighten 5 to 10 basis points in the second quarter.

"Banks won't get the full benefit of the commercial loan growth because of the margin compression," he said.

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