US banks post strong results: Securities and foreign currencies provide trading profits
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Your support makes all the difference.LARGE US banks continued to report stronger-than-expected earnings for the second quarter, thanks to record trading profits and gradually declining losses due to bad loans.
Citicorp, Chemical Banking and Nationsbank, America's first, third and fourth-largest banks respectively, all beat Wall Street's estimates for their profits. The two New York-based money-centre banks made substantial profits trading in securities and foreign currencies, while Nationsbank and other 'super-regionals' showed encouraging loan growth despite the weak US economic recovery.
Citicorp continued its own gradual recovery from its crisis of two years ago, earning dollars 446m ( pounds 308m) against dollars 143m a year earlier. Commercial and consumer credit costs fell to dollars 1.05bn from dollars 1.21bn in the first quarter, an improvement some analysts believe is still too slow. But the bank managed to increase its consumer-loan loss reserves, while continuing to build its capital base.
Chemical's profits rose to dollars 381m from dollars 240m a year ago, almost 25 per cent better than Wall Street's predictions, helped by strong venture-capital gains.
Earnings at Nationsbank, the parent of the stockbrokers Panmure Gordon, rose 22 per cent to dollars 306m from dollars 251m while Wells Fargo, based in San Francisco, was the biggest surprise for analysts, increasing its earnings to dollars 149m from dollars 82m, despite the lingering recession in California.
Marine Midland, part of the same Hongkong Bank stable as Midland Bank, showed a 10 per cent rise for the quarter at dollars 45.3m, pushing first-half earnings to dollars 79.3m against dollars 43.6m in the same period last year.
The bank returned to the black for the first time in three years in 1992. It attributed the continuing improvement this year to lower interest rates, an easing of the property crisis in New York State and cost-cutting.
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