Vaulting Profits

For many a U.S. businessman caught in a profit squeeze this year, the nation's banks are a source of envy as well as credit. Aided by the highest money rates in 30 years, the biggest banks last week checked in with record nine months' earnings reports, posting increases of from 5% to 27% over 1939's three quarters.

The nine-month gains were racked up despite a slowing in the third quarter, caused by the lowering of the prime interest rate from 5% to 4 1/2% and a falling off in loan demand. But with loan demand again picking up, 1960 seems sure to be the best earnings year in banking history.

The Chase Manhattan Bank, second largest in the nation after California's Bank of America, reported net earnings up 20.1% for the first nine months, from $3.42 to $4.11 per share, despite a third-quarter increase of only 11.9%. The third largest U.S. bank, the First National City Bank of New York, posted a 14.5% nine months' gain over 1959, with per-share earnings up from $4 to $4.58. Its third-quarter gain: 4.8%.

Morgan Guaranty Trust Co. boosted earnings 26.8% for the nine months, from $4.18 to $5.30 per share, and third-quarter earnings were up 14.8%. Profits of the Chemical Bank New York Trust Co. were up 5.4% for the nine months to $3.60 per share, and third-quarter earnings held steady. Despite a third-quarter earnings decline of 3%, Irving Trust Co., the ninth largest U.S. bank, came through with a 27.3% increase in the nine months' period, shooting earnings from $2.03 to $2.59 per share.

Outside New York, banks did as well or better. The First National Bank of Boston, despite only a 3.5% third-quarter increase, raised nine months' earnings 11% to $4.69 per share; the National Bank of Detroit gained 17.3% to $4.25 per share; the Philadelphia National Bank pushed up from $2.38 last year to $2.83 for 1960.

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