Wells Fargo & Co., BankAmerica Corp., and Citicorp led the banking industry in sales of annuities during the third quarter of 1994, according to study by a Mamaroneck, N.Y., research firm.

These three companies, taken together, sold more than $1 billion of annuities during the quarter, the study by Bank Insurance Market Research Group found. That's 30% of all bank sales of annuities, which totaled $3.42 billion in the period.

The research firm said bank sales of annuities accelerated by 9% in the third quarter of 1994. At the same time, sales of long-term mutual funds at banks plummeted 20%.

The activity, revealed by an analysis of 2,000 bank call reports, illustrates the extent to which investors abandoned stock and bond funds in favor of fixed-rate offerings, like fixed annuities, said Andrew Singer, the firm's managing director.

The market for investment products "is not static," Mr. Singer said. Product preferences "swing back and forth."

Wells Fargo, based in San Francisco, captured first place, with $462.1 million in annuity sales - double its second-quarter volume.

BankAmerica, also in San Francisco, fell to the No. 2 spot, with $325.5 million of annuity sales. Citicorp, based in New York, placed third, with $224.6 million of annuity sales.

Mr. Singer estimated that fixed annuities - whose yields are tied to interest rates - accounted for 80% of overall annuity volume. Variable annuities suffered because their performance is tied to underlying mutual funds, Mr. Singer said.

He expects variable annuity and mutual fund sales to remain sluggish, at least for the early part of this year, reflecting the latest interest rate increase. Fixed annuities will likely have another positive year, he added.

On the mutual fund side, sales were off sharply. Commercial and savings banks sold $5.68 billion of stock and bond funds in the third quarter, down from $7.16 billion the preceding quarter, the research firm said.

The top two banks in fund sales - Wells Fargo and Chase Manhattan Corp. of New York - managed to boost their volume despite the declining market.

Wells Fargo took first place, with mutual fund sales of $615.8 million, up 12% in the quarter. Chase Manhattan sales of $521.1 million represented a 16% increase.

But third-place J.P. Morgan & Co., also of New York, saw sales drop 40%, to $334.7 million.

Mr. Singer said institutions with "dynamic sales programs and retail franchises" fared best in the face of declining mutual fund volume.

The figures do not include two big mutual fund purchases that closed in the third quarter. Mellon Bancorp acquired $4.3 billion of mutual fund assets in its August purchase of Dreyfus Corp. And First Union Corp. assumed ownership in July of the $500 million-asset Evergreen Funds from Lieber & Co.

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