Lending Growth Boosts Banks’ Profits : Finance: Higher fees for consumer banking services also contributed to higher second-quarter net income.

Strong growth in lending and higher fees from consumer banking services boosted second-quarter profits at several major banks.

Chase Manhattan Corp. saw earnings rise 32%. Charlotte, N.C.-based NationsBank Corp. was up 43%, and Keycorp in Cleveland was up 13%.

Consumers charged more on their credit cards, and businesses borrowed more money to pay for expanding operations, fueling double-digit loan growth at large regional banks. But the banks felt a pinch in their mortgage businesses as fewer consumers sought to refinance housing loans because of higher interest rates.

Checking account fees and service charges helped boost fee income at many banks. With loans up, banks earned more from interest payments than they paid out in interest on deposits. Fees from managing money for wealthy individuals and businesses also increased in the second quarter.

Chase Manhattan earned $307 million, or $1.46 a share, compared to $233 million, or $1.20 a share, during the same period last year.

Fees and commissions from consumer and global corporate banking activities grew 24% to $480 million. Credit card fees, as well as fees from money management and corporate finance, were up. Unlike many banks, Chase booked higher fees from mortgage banking activities due to the acquisition last year of a mortgage company and because the bank booked losses in its mortgage business a year ago.

Offsetting its good news: A downturn in the stock and bond markets and volatility in foreign exchange caused Chase to make less money from buying and selling securities and currencies on behalf of clients and for its own accounts.

Trading revenue fell 19% to $151 million. Foreign exchange trading revenue was down $7 million to $78 million, and trading account revenue dropped $29 million to $73 million.

Bad loans and foreclosures were down 53% to $1.46 billion compared to a year ago.

In the first six months of the year, Chase earned $671 million, or $3.27 a share, compared to $386 million, or $1.95 a share, a year ago.

Chase shares closed unchanged at $38.75 on the New York Stock Exchange.

NationsBank earnings totaled $437 million, or $1.58 per share, compared to $306 million, or $1.20 per share, a year ago.

The number of new loans and leases rose 11% to 94.6 billion. Loans to consumers were the biggest contributor to the overall increase, the bank said. Loan growth was also higher because NationsBank bought several banks last year.

Net interest income--representing interest earned on loans minus interest paid on deposits--grew by 18% to $1.3 billion.

The growth came from making higher-interest loans while keeping interest rates on deposits steady.

NationsBank continued to make improvements in its problem loan portfolio. The number of loans that are in default fell 13% to $1.4 billion.

Profit for the first six months rose 45% to $854 million, or $3.10 per share, compared to $587 million, or $2.30 per share, during the same period last year.

NationsBank shares were up 62.5 cents at $55.125 on the NYSE.

Keycorp’s net income rose 13% to $222 million, or 89 cents a share, compared to $209 million, or 85 cents a share, a year ago.

The company’s prior-year results were restated because Keycorp merged with Society Corp. in March. The two banks pooled their assets, so last year’s figures represent the sum of both banks’ financial results.

Total loans were up 17% to $43.2 billion. Areas with the most loan growth included the Rocky Mountain states, the Northeast and the Northwest.

Mortgage banking profit was down $8.4 million to $19.6 million.

Net interest income was up 1% to $695 million. Income earned from service fees and other non-interest-related sources was down 11% to $227.4. Lower fees from insurance, brokerage and trust services accounted for the drop.

Profit totaled $430 million, or $1.74 a share, in the first six months of the year, compared to $386.8 million, or $1.58 a share, a year ago.

Keycorp’s shares closed down 37.5 cents at $31 on the NYSE.