P.M. BRIEFING : Continental Bank Plans Cutback

Continental Bank Corp., which stumbled in its foray into fields outside traditional banking, said today it will eliminate certain product lines and reduce its staff by 900 people.

The Chicago-based bank holding company, which employs 6,720, also said it will set aside $50 million to cover the costs of cutting the product lines and staff, which will result in a loss for its second quarter.

Continental, the nation’s 18th-largest bank, said it will cut certain products, including futures and options execution and clearing as well as foreign exchange and U.S. government bond trading in Tokyo for its own account.

The bank said it intends to continue operations in financial risk management, debt distribution and customized corporate finance activities, in addition to private banking and treasury management businesses.

Continental Bank, formerly known as Continental Illinois Corp., was once the nation’s largest bailout case. In 1984, the Federal Deposit Insurance Corp. put up $4.5 billion in cash and guarantees to rescue the Chicago bank when rumors of Continental’s impending insolvency frightened institutions into withdrawing huge deposits.