Chase, Continental Illinois Report Jump in Earnings

Two of the nation’s largest bank holding companies--Chase Manhattan Corp. and Continental Illinois Corp.--on Monday reported a sharp increase in their first-quarter profits.

Chase, the nation’s second-largest banking company, said net income totaled $277 million, up 166% from $104 million in the year-earlier quarter.

Continental Illinois, ranked 15th, said it netted $68.5 million, up 59% from earnings of $43.1 million in 1987.

Chase said its net income was boosted by the sale of its securities information subsidiary Interactive Data Corp., the sale of a branch office building in Paris and federal income tax benefits.

Excluding these items, net income for the quarter would have been $116 million.

Total assets during the quarter averaged $95.7 billion, compared to $97 billion in the year-earlier quarter. Chase’s sale of its subsidiary Nederlandse Credietbank NV on Dec. 31, 1987, reduced 1987 year-end total assets by about $4 billion.

The provision for possible credit losses was $150 million during the quarter, down from $160 million in the year-earlier quarter. Chase said the continuing non-accrual status of loans to Brazil and Ecuador reduced first-quarter net interest income by $53 million.

Net interest income during the quarter amounted to $732 million, up from $721 million in the year-earlier quarter. Total interest expense was $1.46 billion, up from $1.26 billion.

Other operating income for the quarter was $633 million, up from $426 million in the year-earlier period. Operating expenses amounted to $856 million, up from $840 million in the first quarter of last year.

Chase noted that a strong performance by its foreign-exchange trading operation and increased fees and commissions were partially offset by a decline in gains from the sales of investment securities.

Continental Illinois attributed its increase in earnings partly to the settlement of a portion of Continental’s pension-plan obligation.

By purchasing an annuity for a portion of that obligation, Continental was able to realize gains on pension assets that had appreciated, said company spokeswoman Holly Anderson.

Continental said the remainder of first-quarter income resulted from improved performance in the core businesses--lending, fees and trading--of the holding company’s Continental Illinois National Bank & Trust Co.

Continental said total revenue--the sum of net interest revenue plus fees, trading and other sources--rose 13% to $275.7 million from $244.3 million a year ago.

The company said it lowered its provision for loan losses to $10.4 million from $13.5 million last year.