Major Banks Report Low Quarter Earnings

Some of the nation’s major banks reported lower first-quarter earnings today because of shaky U.S. real estate loans and the absence of interest payments on loans made to Brazil.

Chase Manhattan Corp., the nation’s No. 2 bank, after Citicorp, said its first-quarter earnings fell 33% from a year earlier because of deteriorating real estate loans.

Citing the possibility of a further decline in domestic and commercial real estate markets, Chase raised its provision for real estate loan losses to $225 million from $150 million a year earlier. The loan-loss reserve represents the money put aside to cover loans that may go bad.

The provision cut Chase’s net income to $44 million, or 20 cents a share, in the first quarter from $132 million, or $1.27 per share, a year earlier.

Chase also said it received almost no money from Brazil in the first quarter of 1990, compared to last year when it received $61 million in interest.

Fourth-ranked J. P. Morgan & Co. Inc., parent of Morgan Guaranty Trust Co. of New York, also said earnings dipped to $169 million in the first quarter from $180 million a year earlier, before a $230-million accounting gain in the 1990 period.

J. P. Morgan said trading and investment management revenues rose strongly, but interest revenue fell 11% because the bank received no payments from Brazil on medium- and long-term loans.

Morgan’s expenses also rose 11% in the quarter.

A slowdown in corporate finance activities also helped cut the earnings of fifth-ranked Manufacturers Hanover Corp. to $96 million from $103 million a year earlier.

Although the bank said net loan charge-offs on Third World loans were reduced and expenses remained under tight control, loan income declined.

“Net income from non-performing loans to major refinancing countries was $18 million less than the previous year’s quarter, masking earnings improvements in other areas of our business,” Manufacturers Hanover Chairman John McGillicuddy said in a statement.