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Chase pursues record 4Q
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December 17, 1998: 4:53 p.m. ET
Financial services company says earnings will far exceed estimates
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NEW YORK (CNNfn) - Chase Manhattan Corp., the nation's third-largest bank, will exceed analysts' consensus earnings for the fourth quarter and the year, executives said.
The banking company said in a government filing it expects to top Wall Street's fourth quarter earnings estimates of $1.07 a share and may even surpass the record $1.20 a share, or $1.1 billion, it earned in the second quarter this year.
Strong growth in Chase's three main business lines - global banking, consumer banking and global services - were bolstering earnings, Chase (CMB) said.
Chase would stand apart from other Wall Street firms, which rely more on strong markets for profits and are still suffering from rocky conditions this autumn.
"We are benefiting from an enhanced competitive positions across the board,'' a Chase spokeswoman said. "We are seeing strong results across all three franchises.'' The bank also expected to beat 1998 estimates of $4.27 a share, she said.
Chase reported fourth quarter earnings for 1997 of $1.89 a diluted share, beating year- earlier results by a penny.
News of the upbeat forecast sent shares of Chase soaring more than 10 percent on Wall Street, closing at 69-7/8, up 6-3/8.
Strong fourth quarter profits at Chase would stand in sharp contrast to sluggish results at other financial services firms, including J.P. Morgan & Co. Inc., whose trading desk is still suffering the after-effects of recent market turbulence, and securities firm Goldman Sachs,
"So many banks have pre-announced bad results (for the fourth quarter), so for one to come out and say (it) did well, that's great news,'' said analyst Charles Vincent of PNC Asset Management Group. "There's potential we'll see some upside surprises at other (large) banks.''
J.P. Morgan said last week its fourth quarter profits would be even worse than third quarter results, when emerging market turmoil ate into profits. Analysts have also been gradually trimming expectations for fourth quarter results at Citigroup because of losses at its Salomon Smith Barney arm.
But Chase, which draws more money from traditional commercial banking businesses than firms like J.P. Morgan that more closely resemble an investment bank, said its consumer bank could see profits rise 15 percent. Its global services business was strong and it was also gaining market share in the high-grade securities underwriting business.
"The dislocation in markets played to our strengths in the debt market,'' a Chase spokeswoman said, adding the bank could rise in Wall Street rankings for high-grade securities underwriting this quarter.
Rocky stock markets during September and October curbed stock underwriting activity this autumn, but the bank loan market remained open to corporations and Chase profited.
Chase's trading results were also expected to be strong in the fourth quarter because the bank had the capital to continue to make markets in foreign exchange and derivatives instruments, a spokeswoman said. Venture capital gains, virtually non-existent at the bank in the third quarter, should return to more normal levels this quarter, she added. 
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Chase Manhattan Corp.
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