Banc One Seen Taking Charge Of $100 Million --- Move, Due to Higher Rates, Follows PNC Disclosure Of Big Drop in Earnings
Some big banks that bet the wrong way on interest rates are starting to suffer blows to earnings.</br></br>Banc One Corp., a regional bank based in Columbus, Ohio, is expected to announce today a fourth-quarter charge of at least $100 million, reflecting the declining value of its securities portfolio as a result of the jump in interest rates, people familiar with the bank said. The expected move follows PNC Bank Corp.'s disclosure last week that higher rates would cause bigger-than-expected earnings declines in the fourth quarter and next year. Analysts think some other banks may soon make similar announcements.</br></br>Many banks, however, appear to be well positioned to weather the rise in rates, in part because their investments are more conservative. Some banks even are benefiting from higher rates, mainly because they can charge more for loans. According to analysts, some of the better-positioned banks include Citicorp, NationsBank Corp., First Interstate Bancorp, Fleet Financial Group Inc., Bank of Boston Corp. and Bank of New York Co.</br></br>Still, PNC's disclosure last week sent bank stocks reeling as investors decided to sell first and ask questions later. "They took out and shot all the regional banks without discriminating," said Ronald Mandle, a bank analyst at Sanford C. Bernstein & Co.</br></br>The "natural tendency is to believe all bankers are stupid and don't know what they're doing," said Carole Berger, banking analyst at Salomon Brothers. "That's not necessarily true."