U.S. bank loan growth in international markets outpaced domestic activity in the 12 months ended June 30, according to American Banker.

Non-U.S. commercial and industrial loans on the books surged 17%, to $124 billion, compared with a 13% jump in loans to U.S. borrowers, to $578 million. The data exclude loans to foreign governments, banks, and consumers.

"Bank overseas lending, especially to emerging markets, has been growing steadily since 1991," said Raphael Soifer, an analyst with Brown Brothers Harriman & Co.

But though the results underscore the rapid international growth among U.S. banks in the past year, bankers and analysts are less certain about what the future may bring in the wake of the sharp fall in currencies and stock markets in Asia and Latin America.

"Loan activity will slow down as we wait for some of these situations to sort out," said Douglas A. Ransdell, senior vice president in Comerica Inc.'s global banking division.

For the year ending June 30, though, Citicorp, the U.S. bank with the largest foreign loan portfolio, posted a 14% rise in loans, to $43 billion. Chase Manhattan Corp. was second with $24.6 billion, up more than 16%, and BankAmerica Corp. third with $17 billion, up over 12%.

Among regional banks, many of which have steadily expanded their international operations over the last few years, the increase in foreign commercial and industrial lending was generally faster than at money-center banks, albeit from a smaller base.

NationsBank Corp., Bank of New York Co., Comerica Inc., State Street Corp., and Northern Trust Corp. all increased their holdings of business loans outside the United States by more than 40%.

Although the survey did not give a breakdown by country of borrower, analysts have recently noted that the fastest increase in overseas lending by U.S. banks over the last few years has been in so-called emerging markets in Latin America and Asia.

"It very much depends on the bank and on the market," observed Thomas F. Theurkauf, a banking analyst with Keefe, Bruyette & Woods Inc.

"Most U.S. banks are being selective about the territories they want to penetrate and the direction is away from more mature western economies and into some of the emerging markets that over the long term have better growth and profit prospects," he said.

Although Mr. Theurkauf termed the move a "rebalance that is probably for the better," other analysts have raised some concerns about the trend following recent worldwide turbulence in foreign stock and currency markets.

In a recent survey, Brown Brothers Harriman noted that international cross-border exposure at U.S. banks jumped 26% last year to nearly $102 billion. Most of this exposure is concentrated among the Big Six U.S. banks, however, making them particularly vulnerable to any downturn in markets overseas.

"A 35% writedown of emerging-market exposure, reminiscent of what happened in the 1980s, would wipe out all of the six banks' estimated 1997 earnings and $6 billion besides," Mr. Soifer pointed out.

To be sure, foreign commercial and industrial loans still account for less than 18% of a total $702 billion in such loans at U.S. banks. Other than at the larger U.S. banks, though, levels of international commercial and industrial loans remain fairly low. Bankers also emphasized that they have retained their traditional caution toward foreign lending.

"We continue to be very disciplined in our activities, particularly with regard to cross-border exposure," Mr. Ransdell said.

Much of the lending by Comerica goes to companies in Canada and Mexico and much of that lending goes to subsidiaries of U.S. corporations, joint ventures, or long-standing customers operating in those two countries. Another large portion goes to foreign companies which are investing in the United States.

"We're not moving off into countries that don't have any relationship to trade and investment flows in our traditional markets," Mr. Ransdell said.

Confirming the trend toward increased international activities at U.S. banks, an accompanying survey found that outstanding standby letters of credit issued abroad rose nearly 15%, to $46 billion, or roughly 20% of all standby letters of credit issued by U.S. banks. In contrast, the amount of U.S.-based standby letters of credit rose 11.5%, to $165.8 billion.

Again, Citicorp proved to be the biggest player in the international arena, with nearly $17 billion in non-U.S. letters of credit outstanding. Chase was second, BankAmerica third, and Bankers Trust fourth.

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