Executives of U.S. banks said they saw the international instability coming and had cut back on their exposure accordingly.

At the same time, the bankers emphasized that they remain committed to their global operations for the long term.

But bankers said they expect revenues to decline between now and yearend as a result of a sharp drop in bond underwritings and loan syndications. They added that trading activity could also slump.

"U.S. banks are hunkering down and waiting for the storm to clear so they can rebuild and go on," said Darin Narayana, president of Banc One International of Dallas, the international banking arm of Columbus, Ohio- based Banc One Corp. "I don't think any of them are planning to pull out of international operations."

"Risk management at U.S. commercial banks is very strong," Mr. Narayana said. "The quantification of risk is stronger today than it ever was."

Nevertheless, the risk levels in speculative emerging markets hit home Thursday with Republic New York Corp.'s announcement of a $110 million charge against earnings to cover losses on Russian securities, plus a $45 million writeoff related to credit losses.

Other U.S. banks have been scaling back in Russia.

Chase Manhattan Corp. cut its exposure in half from about $1 billion at yearend 1997; BankAmerica Corp. has reduced its exposure to about $400 million from $668 million.

The Russian cutbacks follow a sharp pullback in Asia. Exposure may include loans and off-balance-sheet items such as derivatives contracts. During the first quarter, U.S. banks' exposure to Asian developing countries fell by 22%, to $41.3 billion.

That includes a 23% decline related to China, 32% to India, and 14% to South Korea.

Banking analysts like Lawrence Cohn at Ryan, Beck & Co. contend that quick shifts by U.S. banks in and out of more volatile markets "have become part of the ebb and flow of normal business," Mr. Cohn said. "As capital moves around the world, trading will build up where capital goes in and will ramp back down as flows go the other way.

"We're starting to see retrenchment in a number of areas and have seen pretty substantial cutbacks in developing-market trading operations at a number of banks," Mr. Cohn said. "By the end of the third quarter, we will see that at a larger number of banks."

Analysts warn that the crisis is far from over. Banks' Russian exposure is limited, but Latin America is a different story. Any spillover from the Russian financial crisis could hit U.S. banks with operations there hard.

"No one has a handle on the extent of the problem.," said Gary Kleiman, president of Kleiman International, a Washington-based consulting firm. But he noted that developing countries "are integral parts of the global marketplace and banks can't ignore them because they still offer the highest longer-term risk/reward ratio."

He said there is still justification "for staying in international over the longer term, but over the interim there is going to be a massive shakeout."

Bankers persist in seeing some of their strongest revenue- and earnings- growth opportunities outside the United States. And they stress that their exposure to international markets, as a percentage of total exposure, is far less than it was in 1982 at the onset of the Latin American debt crisis, which caused billions of dollars of losses on cross-border loans.

"Chase remains committed to its global operations," said Donald H. Layton, vice chairman and head of Chase Manhattan Corp.'s global markets division.

Without its international businesses, Mr. Layton added, the bank would be unable to carry out its strategy of serving as a "leading global provider of wholesale financial services."

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