BANKING & FINANCE - March 22, 1996

Chemical, Chase Warn of Higher Merger Costs: Chemical Banking Corp. and Chase Manhattan Corp. said the cost of their merger will be higher than anticipated, reducing first-quarter profit by $1.7 billion before taxes. Chemical and Chase, both based in New York, said one-time costs to merge the two will come to $1.9 billion, $400 million more than originally announced. The banks also said annual savings from the merger will total $1.7 billion, $200 million more than first estimated. The merger costs, associated with severance packages and consolidation, will result in a first-quarter pretax charge of $1.65 billion--about $1 billion after taxes--and an additional $250 million over two years. The banks issued their announcement after the close of trading.