3 More Banks Report Russian Trading Losses

Three large U.S. banks joined the ranks of casualties from the Russian economic front Friday, announcing trading losses in the millions of dollars.

J.P. Morgan & Co., the nation’s fourth-largest bank, said it lost money in Russia but declined to say how much. The company said its “exposure” in Russia is $160 million and its trading revenue has been hurt during the current quarter, partly as a result of accounting for Russian losses.

Citing the volatile world financial markets, especially in Russia, J.P. Morgan said its trading revenue was about $300 million so far in the quarter, including trading-related net interest income.

“This amount includes losses from write-downs of Russian trading assets, partially offset by gains in other emerging markets and lower revenues from trading activities in developed markets,” the New York bank said.

For the entire third quarter of 1997, trading revenue, or the money taken in from trading, was $657 million.

J.P. Morgan’s statement followed similar announcements from BankAmerica Corp. and BankBoston.

San Francisco-based BankAmerica, the nation’s fifth-largest bank, said it lost $220 million so far this quarter, mostly in Russia.

BankAmerica said its losses, including net interest income associated with trading activities, were the principal factor in reducing its exposure in Russia from $412 million June 30 to about $100 million Wednesday. A bank spokeswoman said the losses came in stock, bond and currency dealings.

“Using sort of back-of-the-monitor calculations, I think the effect [of BankAmerica’s loss] will be 5 to 6 cents per share, which is not a big deal,” said John Moore, senior vice president of Interstate/Johnson Lane.

BankBoston said it had losses of $30 million in the same period, with about $10 million related to its bond trading in Russia.

BankAmerica and BankBoston declined to comment on the effect of the losses on third-quarter earnings, or to speculate about the situation in Russia.

On Thursday, Republic New York Corp. said losses on its Russian investments would force it to take a charge of $110 million in the third quarter and wipe out its earnings for the period.

Banks were among the major losers on the stock market Friday as Wall Street evaluated the fallout from the near-collapse of the Russian economy.

BankAmerica stock fell $4.19 to close at $69.56; NationsBank fell $2.69 to $62.31; BankBoston lost $3 to $36; and J.P. Morgan declined $7 to $97.75, all on the New York Stock Exchange.

A spokesman for NationsBank, which agreed to merge with BankAmerica earlier this year, said Friday that the deal was still on. Analysts said the hit taken by BankAmerica would not affect the performance of the newly formed banking group.

Analysts said it was positive for the banks to reduce their exposure in Russia and other economies experiencing a ripple effect from markets in turmoil.

For BankAmerica and BankBoston, the losses were not good news, but they would not be a severe blow.