NationsBank profits increased 59% in '93

January 19, 1994|By David Conn | David Conn,Staff Writer

An article and headline in yesterday's Business section incorrectly stated the percentage increase in NationsBank Corp.'s 1993 earnings. The company's annual earnings rose 31 percent compared with 1992, while its fourth-quarter earnings increased 59 percent compared with the year-earlier period.

The Sun regrets the errors.

Lower interest rates, the improving health of commercial borrowers and a slowly growing appetite for bank loans turned 1993 into a record year of profits for NationsBank Corp. and other major banking companies that reported their annual results yesterday.

NationsBank, now Maryland's largest banker, showed a 59 percent increase in 1993 earnings -- 43 percent after adjusting for various acquisitions and other one-time events. Earnings gains were even greater at money center banks such as Citicorp, Chase Manhattan Corp. and Chemical Banking Corp.

FOR THE RECORD - CORRECTION

"I think the overarching trend has been rapidly improving credit quality, whether it's Citibank, NationsBank or the others," said Diane Glossman, banking analyst at Salomon Bros. Better credit quality means banks have been able to cut all the assorted costs related to loans in default and foreclosed properties."

Citicorp, the nation's largest banking company, said earnings in the October-December period rose 105 percent from the same period in 1992. Other major banks also reported huge quarterly gains: Chase Manhattan Corp., up 85 percent; Chemical Banking Corp., up 14 percent; Banc One Corp., up 39 percent; and Wells Fargo & Co., up 228 percent.

NationsBank Corp.

The nation's third-largest banking company turned in a strong quarterly and annual earnings report yesterday, showing it has been able to absorb the $1.4 billion purchase of MNC Financial Inc. with hardly any effect on its bottom line.

The Charlotte-based company, now Maryland's largest banking company, reported a $1.5 billion profit, a 31 percent increase over 1992 earnings of $1.15 billion. Per-share earnings rose 26 percent, to $5.78, from $4.60 a year earlier.

Fourth-quarter earnings were $373 million, or $1.37 a share, up from $234 million, or 92 cents a share, a year earlier.

Adjusted for acquisitions and one-time tax changes, NationsBank's earnings climbed 43 percent in 1993, to $1.3 billion from $912 million in 1992.

NationsBank has spent the past several years expanding into areas not traditionally offered by banks, investor relations director Rusty Page said. Its joint venture with Dean Witter has given the company a solid entry into the retail investing business; the acquisitions of Chrysler First Financial Services and U S West Financial Services last year garnered consumer finance offices in 33 states; and the Chicago Research & Trading purchase has allowed NationsBank to offer corporate customers range of exotic financing tools.

As a result, the company's revenues from these nontraditional areas and other fee-based services rose 10 percent last year, to billion, compared with $1.9 billion in 1992. At the same time, interest income, or revenues from loans and deposits, reached $4.72 billion, a 13 percent increase over net interest income of $4.19 billion a year earlier.

That increase was driven partly by strong loan growth, despite the weak national recovery last year. NationsBank's loans grew 10 percent in 1993, not including acquisitions and divestitures.

NationsBank Corp.

... .. .. .. ..Ticker.. .. .. .. .. .. .Yesterday's

.. .. .. .. .. Symbol.. .. .. .. Cls.. .. .. ..Chg.

.. .. .. .. .. NB .. .. .. .. .. 49 1/4 .. .. .. ....- 1/2

Period ended

Dec. 31 .. .. .. 4th qtr. . .. .. .. Year ago .. .. .. .. .. ..Chg.

Net Income.. .. ..$373,000 .. .. .. ..$234,000 . .. .. .. ..+59.4%

Primary EPS.. .. .. $1.37 .. .. .. .. ..$ 0.92 .. .. .. .. +48.9%

Annualized return

on avg. assets .. .. 0.94% .. .. .. .. .. 0.72%

Add. to allowance

for loan losses .. ..$100,000.. .. .. .. $150,000 .. .. .. -33.3%

.. .. .. .. .. .. ..Year.. .. .. .. ..Year ago.. .. .. .. .. Chg.

Net Income.. .. .. $1,501,000 .. .. $1,145,000 .. .. .. .. +31.1%

Primary EPS .. .. .. ...$5.78 .. .. .. .. $4.60 .. .. .. ..+25.7%

Annualized return

on avg. assets.. .. .. 1.12% .. .. .. .. ..1.00%

Add. to allowance

for loan losses .. .. $430,000.. .. ... .. $715,000 .. .. .-39.9%

Figures in thousands (except per share data.)

Chase Manhattan Corp.

Fourth-quarter earnings were a record $313 million, or $1.53 per share, up from $169 million, or 87 cents a share, during the 1992 fourth quarter. For the year, Chase reported a $966 million profit, or $4.79 per share, up from $639 million, or $3.46 a share, in 1992.

Citicorp

Fourth-quarter earnings were $575 million, or $1.06 per share, vs. $280 million, or 53 cents a share, during the 1992 fourth quarter. For 1993, Citicorp earned a record $2.2 billion, or $4.11 a share, up from $722 million, or $1.35, in 1992.

Chemical Banking Corp.

The nation's fourth-largest bank earned $347 million, or $1.23 per share, for the fourth quarter, above the $304 million, or $1.09 a share, during the 1992 fourth quarter. For the year, profits were $1.6 billion, or $5.77 per share, up from $1.09 billion, or $3.90 a share, in 1992.

Banc One Corp.

Fourth-quarter earnings were $286 million, or 82 cents per share, vs. $206 million, or 59 cents per share, for the 1992 period. In 1993, profits were a record $1.14 billion. or $3.28 a share, up from $877 million, or $2.25 a share, in 1992.

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