EARNINGS : Several Major Banks Report Mixed Results

Several of the nation’s largest bank holding companies reported differing earnings performances Monday, with second-quarter profits down at Chase Manhattan Corp. and J. P. Morgan & Co. but up at Security Pacific Corp.

Chase, second to Citicorp in total assets, said its earnings fell 38.8% compared to the same period in 1988, mainly because of special factors that boosted earnings in the year-earlier period.

Third-ranked J. P. Morgan, parent of Morgan Guaranty Trust Co., said its earnings fell 9.8% because of its sharply higher cost of funds during the period.

Latin Loans Hurt

Fifth-ranked Security Pacific said its earnings rose 20% due partly to strong growth in domestic loans.

Bad loans to Latin American countries continued to hamper the banks’ results. U.S. bank regulators in June required banks to charge off 20% of their loans to Argentina.

New York-based Chase reported a profit of $137 million, down from $224 million a year earlier. The 1988 second quarter included an after-tax gain of $69 million on the sale of an interest in Cain Chemical Inc. and the use of $35 million in federal tax benefits.

Net interest income in the quarter increased to $791 million from $782 million a year earlier, largely because of interest payments by borrowers in Brazil, partly offset by non-payment by Argentine borrowers, Chase said. Other operating income totaled $491 million, down from $569 million a year earlier.

Chase’s new provisions for possible credit losses totaled $150 million in the second quarter, level with a year earlier, bringing the total new provisions in the first half to $300 million, also level with a year earlier.

New York-based J. P. Morgan said its second-quarter profit fell to $206 million from $229 million in the comparable 1988 period.

Net interest income fell to $316 million from $383 million a year earlier, while non-interest income rose to $485 million from $376 million a year earlier.

Morgan’s total of non-performing loans rose to $1.84 billion as of June 30 from $1.62 billion a year earlier. Of that, loans to Brazil accounted for $1.04 billion and loans to Argentina accounted for $473 million.

The company made an additional provision of $35 million for credit losses in the quarter, compared to a provision of $30 million a year earlier, bringing the total new provisions this year to $45 million, down from $80 million a year earlier.

For the three months ended June 30, Los Angeles-based Security Pacific said its net income totaled a record $184.5 million, up from $154.3 million in the year-ago period.

Net interest income rose to $732.2 million from $662.2 million a year earlier, while non-interest income rose to $449.7 million from $410.7 million a year earlier.

Security Pacific Chairman Richard J. Flamson III said that in addition to domestic loan growth, the holding company benefited from an overall increase in non-interest income and slow growth in non-interest expense.

Security Pacific’s portfolio of non-performing loans totaled $1.64 billion as of June 30, down from $1.74 billion a year earlier.

The company added $111.6 million to its reserve for credit losses in the quarter, compared to a provision of $79.3 million a year earlier, bringing total new provisions this year to $222.9 million, up from $157.9 million a year earlier.