Chase Posts a Turnaround in 3rd Quarter

Chase Manhattan Corp. reported a better-than-expected quarterly profit Monday.

The nation’s No. 3 banking company registered a third-quarter profit of $136 million, or 79 cents a share, contrasted with a net loss of $623 million, or $5.03 a share, in the same period of 1990.

The bank’s profit margins were boosted by a decline in interest rates paid to depositors. Rates paid by borrowers fell much more slowly, increasing the bank’s “spread,” a measure of profitability.

Chase also said its income was boosted by $45 million in interest payments from Brazil, which paid nothing on its enormous debt last year.

“We continue to be encouraged by Chase’s progress,” said Thomas G. Labrecque, chairman of the banking company.

Labrecque noted that Chase had expanded its regional banking operations in the quarter with the acquisition of two Connecticut banks and exceeded its plans to cut costs by eliminating 5,000 jobs.

Chase said it set aside $265 million against potential bad loans during the quarter, far less than the $650 million it put in reserve a year ago.

Chase stock rose 37.5 cents to close at $18.875 on the New York Stock Exchange.

As of Sept. 30, Chase had $3.4 billion in loans in that category, compared to $3.2 billion three months earlier and $2.3 billion as of Sept. 30, 1990.

Chase’s revenue from interest payments in the quarter was $863 million in the quarter, up from $795 million.