SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: July 21, 1999 Commission file number 1-5805
THE CHASE MANHATTAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-2624428
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
270 Park Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 270-6000
1
<PAGE>
Item 5. Other Events
- --------------------
The Chase Manhattan Corporation ("Chase") announced on July 21, 1999 operating
diluted earnings per share of $1.55 in the second quarter of 1999, up 28 percent
from $1.21 per share in the second quarter of 1998. Reported diluted earnings
per share were $1.60 in the 1999 second quarter, up 33 percent from $1.20 in the
second quarter of 1998. For the first six months of 1999 operating diluted
earnings per share were $2.87, up from $2.38 per share for the first six months
of 1998, and reported diluted earnings per share were $2.92, up from $2.00 per
share for the first six months of 1998. Operating results (revenues and
earnings) exclude the impact of credit card securitizations, restructuring costs
and special items.
A copy of Chase's earnings press release is attached as an exhibit hereto. That
press release may contain statements that are forward looking within the meaning
of the Private Securities Litigation Act of 1995. Such statements are subject to
risks and uncertainties and Chase's actual results may differ materially from
those set forth in such forward looking statements. Reference is made to Chase's
reports filed with the Securities and Exchange Commission, in particular Chase's
Annual Report on Form 10-K for the year ended December 31, 1998, for a
discussion of factors that may cause such differences to occur.
2
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following exhibit is filed with this report:
Exhibit Number Description
99.1 Press Release - 1999 Second Quarter Earnings.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE CHASE MANHATTAN CORPORATION
(Registrant)
Dated July 22, 1999 by /s/JOSEPH L. SCLAFANI
- ------------------ -------------------------
Joseph L. Sclafani
Executive Vice President and Controller
[Principal Accounting Officer]
4
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page at Which Located
99.1 Press Release - 1999 Second
Quarter Earnings 6
5
<PAGE>
The Chase Manhattan Corporation
270 Park Avenue
New York, NY 10017-2070
{Chase Letterhead}
News Release
Chase Reports Record 1999 Second Quarter Results
Operating EPS Rises 28 Percent
--------------------------------------------
New York, July 21, 1999 -- The Chase Manhattan Corporation (NYSE:CMB) today
announced operating diluted earnings per share of $1.55 in the second quarter of
1999, up 28 percent from $1.21 in the second quarter of 1998. Including
non-operating items, reported diluted earnings per share were $1.60 in the 1999
second quarter, up 33 percent from $1.20 in the second quarter of 1998. For the
first six months of 1999 operating diluted earnings per share rose to $2.87, up
21 percent from $2.38 for the first six months of 1998, and reported diluted
earnings per share were $2.92, up 46 percent from $2.00 for the first six months
of 1998.
Operating earnings in the 1999 second quarter were $1.351 billion, up 25 percent
from $1.079 billion in the 1998 second quarter. Operating earnings in the first
six months of 1999 were $2.524 billion, up 18 percent from $2.132 billion in the
first half of 1998. Reported net income in the 1999 second quarter was $1.393
billion, and reported net income in the first six months of 1999 was $2.566
billion.
Second Quarter Financial Highlights
- - Operating revenues increased by 13%
- - Operating earnings per share rose 28%
- - Return on common stockholders' equity was 24% with Shareholder Value
Added (SVA) up 58%
- - Common stock repurchases were $968 million, on a net basis, while the
Tier 1 capital ratio remained above Chase's target at 8.4%
"Chase had a terrific second quarter," said William B. Harrison, Jr., president
and chief executive officer. "Each of our businesses - Global Banking, National
Consumer Services and Global Services - posted double-digit revenue growth and
more than 20 percent growth in earnings. Our performance clearly demonstrates
that the Chase franchise is delivering on its growth potential."
------------------------------
Investor contact: John Borden 212-270-7318
Press contacts: Jim Finn 212-270-7438
John Meyers 212-270-7454
<PAGE>
<TABLE>
<CAPTION>
Financial Performance
- ------------------------------------------- -------------------- -------------- ------ --------------- ------------- ---------
THE CHASE MANHATTAN CORP Second Quarter Six Months
- ------------------------------------------- -------------------- -------------- ------ --------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
(dollars in millions) 1999 O(U)1998 % 1999 O(U)1998 %
Operating Revenues $5,696 $655 13% $11,109 $1,165 12%
Cash Operating Earnings 1,427 284 25 2,673 416 18
Shareholder Value Added 696 256 58 1,197 329 38
Cash Return on Common Equity 25.7% 430bp -- 23.8% 230bp --
- ------------------------------------------- -------------------- -------------- ------ --------------- ------------- ---------
</TABLE>
Line of Business Results
<TABLE>
<CAPTION>
- ------------------------------------------- -------------------- -------------- ------ --------------- ------------- ---------
GLOBAL BANK Second Quarter Six Months
- ------------------------------------------- -------------------- -------------- ------ --------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
(dollars in millions) 1999 O(U)1998 % 1999 O(U)1998 %
Operating Revenues $2,722 $313 13% $5,296 $528 11%
Cash Operating Earnings 940 160 21 1,787 239 15
Shareholder Value Added 491 150 44 889 221 33
Cash Return on Common Equity 27.5% 410bp -- 26.2% 290bp --
- ------------------------------------------- -------------------- -------------- ------ --------------- ------------- ---------
</TABLE>
Cash operating earnings in the Global Bank increased 21 percent over the
prior-year quarter to $940 million. Operating revenues of $2.72 billion were 13
percent higher than in the 1998 second quarter. Shareholder value added
increased 44 percent in the quarter to $491 million, up 33 percent for the first
six months.
- - Total trading revenues were $733 million, up 45 percent over the prior-year
quarter and 12 percent lower than in the 1999 first quarter. Results
reflect strong performance across the full range of trading products.
- - Investment banking fees were $585 million in the 1999 second quarter, up 34
percent from its previous record of $438 million in the second quarter of
1998 (and 85 percent higher than the first quarter results). The results
reflect continued growth in market share in mergers and acquisitions
advisory, corporate bond underwriting, and loan syndications. For the first
half of 1999 in the U.S., Chase ranked #1 in loan syndications, #3 in both
high yield and investment grade corporate debt securities, and #8 in M&A.
- - Private equity-related gains in the 1999 second quarter were $513 million,
39 percent higher than in the 1998 second quarter and 58 percent higher
than the 1999 first quarter, reflecting gains on investments in several
companies which had initial public offerings.
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------- -------------------- -------------- ------ --------------- ------------- ---------
GLOBAL SERVICES Second Quarter Six Months
- ------------------------------------------- -------------------- -------------- ------ --------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
(dollars in millions) 1999 O(U)1998 % 1999 O(U)1998 %
Operating Revenues $777 $93 14% $1,505 $154 11%
Cash Operating Earnings 140 25 22 252 21 9
Shareholder Value Added 47 (2) (4) 65 (32) (33)
Cash Return on Common Equity 19.8% (310bp) -- 17.7% (520bp) --
- ------------------------------------------- -------------------- -------------- ------ --------------- ------------- ---------
</TABLE>
Cash operating earnings for Global Services increased 22 percent over the
prior-year quarter to $140 million. Operating revenues were $777 million, a 14
percent increase over the prior-year quarter, reflecting acquisitions completed
in 1998 and internally generated growth in investor services and structured
finance activities. These increases were offset partially by a decline in excess
deposit balances in cash management services. Shareholder value added decreased
four percent, reflecting the increase in capital associated with the 1998
acquisitions.
As compared with first quarter 1999, cash operating earnings were up 25 percent,
reflecting an increase in revenues of seven percent while expenses remained
flat. Shareholder value added increased from $18 million in the first quarter of
1999, to $47 million in the second quarter.
<TABLE>
<CAPTION>
- ---------------------------------------------- ------------------- ------------- ------- -------------- ------------- --------
NATIONAL CONSUMER SERVICES Second Quarter Six Months
- ---------------------------------------------- ------------------- ------------- ------- -------------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
(dollars in millions) 1999 O(U)1998 % 1999 O(U)1998 %
Operating Revenues $2,209 $211 11% $4,366 $442 11%
Cash Operating Earnings 361 74 26 707 136 24
Shareholder Value Added 144 76 112 276 140 103
Cash Return on Common Equity 21.8% 470bp -- 21.5% 430bp --
- ---------------------------------------------- ------------------- ------------- ------- -------------- ------------- --------
</TABLE>
Cash operating earnings in National Consumer Services rose 26 percent from the
prior-year quarter to $361 million. Operating revenues of $2.21 billion were 11
percent higher. Shareholder value added increased 112 percent in the quarter to
$144 million, and up 103 percent for the first six months.
- - Operating revenues from cardmember services were $1.0 billion, a five
percent increase from second quarter 1998 levels and cash operating
earnings rose 15 percent. These results reflect increased card
usage, pricing initiatives and improved credit quality, partly offset
by higher marketing costs.
- - Home finance revenues increased to $291 million, a 19 percent increase from
second quarter 1998, and cash operating earnings rose 21 percent as a
result of growth in originations and servicing.
- - Regional consumer banking revenues were $593 million, up nine percent over
the prior-year second quarter, and cash operating earnings rose 19 percent.
Results reflect higher deposit and managed funds levels coupled with growth
in consumer banking fees and strong expense discipline.
<PAGE>
- - Revenues from diversified consumer services were $292 million, up 35
percent over the 1998 second quarter, and cash operating earnings rose
145 percent over the prior-year quarter reflecting growth in
originations in auto finance and higher levels of customer activity
through Brown & Company, Chase's discount brokerage firm. In the past
year, Brown & Company has tripled its average trades per day to 35,000,
two-thirds of which are now on-line.
Additional Financial Information
- - Total operating noninterest expenses were $2.97 billion in the second
quarter of 1999, nine percent above the same 1998 quarter, reflecting
technology-related costs, incentive costs tied to higher market-sensitive
revenues and a change in the long term compensation program of the Global
Bank. Expenses rose one percent compared with first quarter 1999, entirely
due to incentive compensation associated with higher market-sensitive
revenues.
- - On a managed basis, including securitizations, credit costs were $637
million in the second quarter of 1999, down from $655 million in the first
quarter of 1999 and compared with $616 million in the second quarter of
1998. Nonperforming assets at June 30, 1999 were $1.63 billion compared
with $1.67 billion at March 31, 1999, and $1.37 billion at June 30, 1998.
Net commercial charge-offs in the second quarter of 1999 were $86 million,
compared to $87 million in the first quarter of 1999 and $72 million in the
second quarter of 1998.
- - Total assets at June 30, 1999 were $357 billion compared with $361 billion
at March 31, 1999, and $367 billion at June 30, 1998. Estimated
risk-weighted assets increased to $291 billion from $287 billion at March
31, 1999, $289 billion at Dec. 31, 1998, and $286 billion one year ago.
While the company repurchased approximately $968 million, net, in common
stock during the quarter, the estimated Tier 1 capital ratio remained at
8.4 percent, the same level as at March 31, 1999. Chase's target range for
Tier 1 capital is 8 to 8.25 percent.
- - Operating results (revenues, expenses and earnings) exclude the impact of
credit card securitizations, restructuring costs and special items. In the
second quarter of 1999, special items included a $61 million (after tax)
gain on the sale of One New York Plaza, a $46 million (after tax) gain on
the sale of branches in Beaumont, Texas, and a $65 million (after tax)
special contribution to The Chase Manhattan Foundation. The 1998 second
quarter included merger-related restructuring costs of $5 million (after
tax).
Chase's news releases and quarterly financial results are available on the
Internet at www.chase.com
<PAGE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
SUMMARY OF SELECTED FINANCIAL HIGHLIGHTS
(in millions, except per share and ratio data)
% %
As of or for the period ended Second Quarter Over/(Under) Six Months Over/(Under)
------------------- ----------------------
-------- ---------
1999 1998 1998 1999 1998 1998
-------- --------- ----- ---------- ---------- ------
OPERATING BASIS (a)
<S> <C> <C> <C> <C> <C> <C>
Operating Revenue $ 5,696 $ 5,041 13% $ 11,109 $ 9,944 12%
Operating Noninterest Expense 2,965 2,712 9% 5,905 5,328 11%
Credit Costs (b) 637 616 3% 1,292 1,232 5%
Operating Earnings $ 1,351 $ 1,079 25% $ 2,524 $ 2,132 18%
Operating Earnings Per Common Share:
Basic $ 1.60 $ 1.24 29% $ 2.97 $ 2.45 21%
Diluted 1.55 1.21 28% 2.87 2.38 21%
Cash Operating Earnings $ 1,427 $ 1,143 25% $ 2,673 $ 2,257 18%
Cash Operating Earnings Per Common Share - Diluted 1.64 1.28 28% 3.04 2.52 21%
Shareholder Value Added (SVA) 696 440 58% 1,197 868 38%
Operating Performance Ratios:
Return on Average Managed Assets (c) 1.43% 1.10% 1.33% 1.09%
Return on Average Common Equity (c) 24.3 20.2 22.5 20.3
Common Dividend Payout Ratio 26 29 28 30
Efficiency Ratio (d) 52 54 53 53
Selected Balance Sheet Items at Period End: (e)
Managed Loans $ 191,985 $ 186,924 3%
Total Managed Assets 373,812 385,214 (3%)
------------------------------------------------------------------------------------------------------------------
AS REPORTED BASIS
Revenue $ 5,616 $ 4,755 18% $ 10,760 $ 9,378 15%
Noninterest Expense (Excluding Restructuring Costs) 3,068 2,714 13% 6,013 5,334 13%
Restructuring Costs -- 8 NM -- 529 NM
Provision for Loan Losses 388 328 18% 769 660 17%
Net Income $ 1,393 $ 1,074 30% $ 2,566 $ 1,799 43%
Net Income Per Common Share:
Basic $ 1.65 $ 1.24 33% $ 3.02 $ 2.06 47%
Diluted 1.60 1.20 33% 2.92 2.00 46%
Cash Dividends Declared 0.41 0.36 14% 0.82 0.72 14%
Share Price at Period End 86.50 75.50 15% 86.50 75.50 15%
Book Value at Period End 26.04 25.14 4% 26.04 25.14 4%
Common Shares Outstanding:
Average Common Shares:
Basic 832.9 848.8 (2%) 838.2 846.8 (1%)
Diluted 861.3 875.5 (2%) 866.6 871.5 (1%)
Common Shares at Period End 832.5 852.9 (2%) 832.5 852.9 (2%)
Performance Ratios:
Return on Average Total Assets (c) 1.55% 1.15% 1.42% 0.97%
Return on Average Common Equity (c) 25.1 20.1 22.8 17.0
Selected Balance Sheet Items at Period End:
Loans $ 175,041 $ 168,705 4%
Total Assets 356,868 366,995 (3%)
Deposits 209,502 207,091 1%
Total Stockholders' Equity 22,708 22,610 --
Capital Ratios:
Tier I Capital Ratio 8.4% (f) 8.2%
Total Capital Ratio 12.0 (f) 11.9
Tier I Leverage 6.8 (f) 6.3
Full-Time Equivalent Employees 73,405 70,693 4%
(a) Excludes the impact of credit card securitizations, restructuring costs
and special items. For a reconciliation of Reported Results as shown on the
Consolidated Statement of Income to results on an Operating Basis see pages
10 and 11. (b) Includes provision for loan losses, foreclosed property
expense and credit costs related to the securitized credit card portfolio.
(c) Based on annualized amounts. (d) Noninterest expense as a percentage of
the total of net interest income and noninterest revenue (excluding
restructuring costs,foreclosed property expense, special items and costs
associated with the REIT). (e) Excludes the impact of credit card
securitizations. (f) Estimated Certain amounts throughout the financial
tables have been reclassified to conform to the current presentation. NM -
Not meaningful Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
Lines of Business Results
(in millions, except ratios)
Global Bank National Consumer Services Global Services Total (a)
--------------------------- ---------------------------- ---------------------------
Second Quarter 1999 1999 1999 1999
Over/(Under) 1998 Over/(Under) 1998 Over/(Under) 1998 Over/(Under) 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenue $ 2,722 $ 313 13% $ 2,209 $ 211 11% $ 777 $ 93 14% $ 5,696 $ 655 13%
Cash Operating Earnings 940 160 21 361 74 26 140 25 22 1,427 284 25
Average Common Equity 13,543 427 3 6,542 (14) - 2,782 807 41 21,986 1,032 5
Average Managed Assets (b) 240,536 (25,304) (10) 114,989 8,518 8 15,437 2,673 21 378,736 (13,538) (3)
Shareholder Value Added (SVA) 491 150 44 144 76 112 47 (2) (4) 696 256 58
Cash Return on Common Equity 27.5% 410bp 21.8% 470bp 19.8% (310)bp 25.7% 430bp
Cash Efficiency Ratio 43 (200) 49 (100) 72 (100) 51 (100)
GLOBAL BANK
KEY FINANCIAL MEASURES
Second Quarter 1999 Over/(Under) 1998
----------------------------------- ------------------------------------
Operating Cash Cash Operating Cash Cash
Revenues Operating Efficiency Revenues Operating Efficiency
Earnings Ratio Earnings Ratio
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Markets $ 993 $ 333 48% 19% 37% (500)bp
Global Investment Banking 467 128 57 18 22 200
Corporate Lending 375 123 33 (2) - 300
Chase Capital Partners 454 267 8 32 33 (100)
Global Private Bank 221 42 68 - (19) 800
Middle Markets 247 59 55 4 9 100
Other Global Bank (35) (12) NM NM NM NM
---------- -----------
Totals $ 2,722 $ 940 43% 13% 21% (200)bp
========== ===========
NATIONAL CONSUMER SERVICES
KEY FINANCIAL MEASURES
Second Quarter 1999 Over/(Under) 1998
------------------------------------- --------------------------------------
Operating Cash Cash Operating Cash Cash
Revenues Operating Efficiency Revenues Operating Efficiency
Earnings Ratio Earnings Ratio
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Chase Cardmember Services $ 1,016 $ 132 35% 5% 15% - bp
Regional Consumer Banking 593 101 70 9 19 (300)
Chase Home Finance 291 70 55 19 21 (100)
Diversified Consumer Services 292 54 50 35 145 (800)
Other NCS 17 4 NM NM NM NM
========== ===========
Totals $ 2,209 $ 361 49% 11% 26% (100)bp
========== ===========
Note: SVA is Chase's primary measure of business unit performance. SVA represents operating earnings excluding the amortization
of goodwill and certain intangibles (i.e., cash operating earnings), less preferred dividends and an explicit charge for
allocated capital. Additional refinements were made to the methodology for the allocation of capital to businesses.
Prior periods have been restated to reflect these changes.
(a) Total column includes the non-global services portion of Chase Technology Solutions, Chase's Global Asset Management
and Mutual Funds business, corporate staff areas, special items and the net effect of management accounting policies.
(b) Excludes the impact of credit card securitizations.
NM - Not meaningful
bp - basis points
Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
Lines of Business Results
(in millions, except ratios)
Global Bank National Consumer Services Global Services Total (a)
--------------------------- ---------------------------- ----------------------- -----------------
Six Months 1999 1999 1999 1999
Over/(Under) 1998 Over/(Under) 1998 Over/(Under) 1998 Over/(Under) 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenue $ 5,296 $ 528 11% $ 4,366 $ 442 11% $ 1,505 $ 154 11% $ 11,109 $ 1,165 12%
Cash Operating Earnings 1,787 239 15 707 136 24 252 21 9 2,673 416 18
Average Common Equity 13,604 475 4 6,525 37 1 2,823 832 42 22,337 1,685 8
Average Managed Assets (b) 244,057 (24,653) (9) 113,542 7,783 7 15,670 2,899 23 381,803 (11,757) (3)
Shareholder Value Added (SVA) 889 221 33 276 140 103 65 (32) (33) 1,197 329 38
Cash Return on Common Equity 26.2% 290bp 21.5% 430bp 17.7% (520)bp 23.8% 230bp
Cash Efficiency Ratio 44 (100) 49 (100) 74 200 52 -
GLOBAL BANK
KEY FINANCIAL MEASURES
Six Months 1999 Over/(Under) 1998
-------------------------------------- -------------------------------------
Operating Cash Cash Operating Cash Cash
Revenues Operating Efficiency Revenues Operating Efficiency
Earnings Ratio Earnings Ratio
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Markets $ 2,262 $ 816 44% 25% 43% (600)bp
Global Investment Banking 689 137 69 (8) (28) 1,200
Corporate Lending 763 263 30 2 10 -
Chase Capital Partners 733 423 9 20 21 (100)
Global Private Bank 433 85 67 2 (10) 500
Middle Markets 481 111 56 1 2 200
Other Global Bank (65) (48) NM NM NM NM
----------- ----------
Totals $ 5,296 $ 1,787 44% 11% 15% (100)bp
=========== ==========
NATIONAL CONSUMER SERVICES
KEY FINANCIAL MEASURES
Six Months 1999 Over/(Under) 1998
------------------------------------- --------------------------------------
Operating Cash Cash Operating Cash Cash
Revenues Operating Efficiency Revenues Operating Efficiency
Earnings Ratio Earnings Ratio
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Chase Cardmember Services $ 2,017 $ 250 35% 6% 10% 100bp
Regional Consumer Banking 1,167 200 70 8 22 (400)
Chase Home Finance 563 132 57 16 13 200
Diversified Consumer Services 582 112 49 36 143 (700)
Other NCS 37 13 NM NM NM NM
========== ===========
Totals $ 4,366 $ 707 49% 11% 24% (100)bp
========== ===========
Note: SVA is Chase's primary measure of business unit performance. SVA represents operating earnings excluding the amortization
of goodwill and certain intangibles (i.e., cash operating earnings), less preferred dividends and an explicit charge for
allocated capital. Additional refinements were made to the methodology for the allocation of capital to businesses.
Prior periods have been restated to reflect these changes.
(a) Total column includes the non-global services portion of Chase Technology Solutions, Chase's Global Asset Management
and Mutual Funds business, corporate staff areas, special items and the net effect of management accounting policies.
(b) Excludes the impact of credit card securitizations.
NM - Not meaningful
bp - basis points
Unaudited
</TABLE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
% %
Second Quarter Over/(Under) Six Months Over/(Under)
----------------- -----------------
--------- ------- -------- --------
1999 1998 1998 1999 1998 1998
INTEREST INCOME
<S> <C> <C> <C> <C> <C> <C>
Loans $ 3,165 $ 3,316 $ 6,374 $ 6,721
Securities 747 889 1,582 1,778
Trading Assets 411 716 829 1,392
Federal Funds Sold and Securities
Purchased Under Resale Agreements 389 554 770 1,225
Deposits with Banks 161 148 345 300
--------- ------- -------- --------
Total Interest Income 4,873 5,623 9,900 11,416
--------- ------- -------- --------
INTEREST EXPENSE
Deposits 1,558 1,784 3,156 3,599
Short-Term and Other Borrowings 851 1,478 1,765 2,987
Long-Term Debt 319 325 630 630
--------- ------- -------- --------
--------- ------- -------- --------
Total Interest Expense 2,728 3,587 5,551 7,216
--------- ------- -------- --------
NET INTEREST INCOME 2,145 2,036 5% 4,349 4,200 4%
Provision for Loan Losses 388 328 18% 769 660 17%
--------- ------- -------- --------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 1,757 1,708 3% 3,580 3,540 1%
--------- ------- -------- --------
NONINTEREST REVENUE
Investment Banking Fees 585 438 34% 902 799 13%
Trust, Custody and Investment Management Fees 461 383 20% 875 731 20%
Credit Card Revenue 438 365 20% 817 665 23%
Fees for Other Financial Services 587 509 15% 1,140 1,019 12%
Trading Revenue 526 323 63% 1,144 791 45%
Securities Gains 5 98 (95%) 161 181 (11%)
Private Equity Gains 513 370 39% 838 663 26%
Other Revenue 356 233 53% 534 329 62%
--------- ------- -------- --------
Total Noninterest Revenue 3,471 2,719 28% 6,411 5,178 24%
--------- ------- -------- --------
NONINTEREST EXPENSE
Salaries 1,416 1,270 11% 2,800 2,524 11%
Employee Benefits 238 215 11% 493 439 12%
Occupancy Expense 206 191 8% 424 380 12%
Equipment Expense 239 212 13% 482 421 14%
Other Expense 969 826 17% 1,814 1,570 16%
--------- ------- -------- --------
Total Noninterest Expense Before Restructuring Costs 3,068 2,714 13% 6,013 5,334 13%
Restructuring Costs -- 8 NM -- 529 NM
--------- ------- -------- --------
--------- ------- -------- --------
Total Noninterest Expense 3,068 2,722 13% 6,013 5,863 3%
--------- ------- -------- --------
INCOME BEFORE INCOME TAX EXPENSE 2,160 1,705 27% 3,978 2,855 39%
Income Tax Expense 767 631 22% 1,412 1,056 34%
--------- ------- -------- --------
========= ======= ======== ========
NET INCOME $ 1,393 $ 1,074 30% $ 2,566 $ 1,799 43%
========= ======= ======== ========
========= ======= ======== ========
NET INCOME APPLICABLE TO COMMON STOCK $ 1,375 $ 1,050 31% $ 2,530 $ 1,741 45%
========= ======= ======== ========
NET INCOME PER COMMON SHARE:
Basic $ 1.65 $ 1.24 33% $ 3.02 $ 2.06 47%
Diluted $ 1.60 $ 1.20 33% $ 2.92 $ 2.00 46%
</TABLE>
NM - Not meaningful
Unaudited
<PAGE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
NONINTEREST REVENUE AND NONINTEREST EXPENSE DETAIL
(in millions)
% %
Second Quarter Over/(Under) Six Months Over/(Under)
--------------------- -----------------------
--------- --------- ---------- ---------
NONINTEREST REVENUE 1999 1998 1998 1999 1998 1998
--------- --------- ----------- ---------- --------- ----------
Fees for Other Financial Services:
<S> <C> <C> <C> <C> <C> <C>
Service Charges on Deposit Accounts $ 96 $ 92 4% $ 185 $ 183 1%
Fees in Lieu of Compensating Balances 94 91 3% 181 171 6%
Commissions on Letters of Credit and Acceptances 69 72 (4%) 138 146 (5%)
Mortgage Servicing Fees 77 49 57% 142 106 34%
Brokerage and Investment Services 50 35 43% 93 67 39%
Insurance Fees (a) 41 32 28% 80 63 27%
Loan Commitment Fees 36 32 13% 67 70 (4%)
Other Fees 124 106 17% 254 213 19%
--------- --------- ---------- ---------
========= ========= ========== =========
Total $ 587 $ 509 15% $ 1,140 $ 1,019 12%
========= ========= ========== =========
Trading-Related Revenue: (b)
Interest Rate Contracts $ 260 $ 95 174% $ 582 $ 226 158%
Foreign Exchange Spot and Option Contracts 218 260 (16%) 417 546 (24%)
Debt Instruments, Equities and Commodities 255 152 68% 571 415 38%
--------- --------- ---------- ---------
Total $ 733 $ 507 45% $ 1,570 $ 1,187 32%
========= ========= ========== =========
Other Revenue:
Residential Mortgage Origination/Sales Activities $ 88 $ 84 5% $ 180 $ 136 32%
Gains on Sales of a Nonstrategic Building and Branches 166 (c) -- NM 166 (c) -- NM
All Other Revenue 102 149 (32%) 188 193 (3%)
--------- --------- ---------- ---------
========= ========= ========== =========
Total $ 356 $ 233 53% $ 534 $ 329 62%
========= ========= ========== =========
------------------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Other Expense:
Professional Services $ 178 $ 161 11% $ 340 $ 303 12%
Marketing Expense 114 108 6% 228 198 15%
Telecommunications 97 91 7% 188 168 12%
Amortization of Intangibles 76 64 19% 149 125 19%
Travel and Entertainment 59 67 (12%) 109 119 (8%)
Minority Interest (d) 12 12 -- 25 24 4%
Foreclosed Property Expense 3 2 50% 8 6 33%
Special Contribution to the Foundation (e) 100 -- NM 100 -- NM
All Other 330 321 3% 667 627 6%
--------- --------- ---------- ---------
========= ========= ========== =========
Total $ 969 $ 826 17% $ 1,814 $ 1,570 16%
========= ========= ========== =========
(a) Excludes certain insurance fees related to credit cards and mortgage
products, which are included in those revenue captions.
(b) Includes net interest income attributable to trading activities.
(c) Includes a $95 million gain on the sale of One New York Plaza and a $71
million gain on the sale of branches in Beaumont, Texas.
(d) Includes REIT minority interest of $11 million in each quarter. (e)
Represents a $100 million special contribution to The Chase Manhattan
Foundation. NM - Not meaningful Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
OPERATING INCOME RECONCILIATION
(in millions, except per share data)
------------------------------------------------------------------------------------------------------------------------
SECOND QUARTER 1999
------------------------------------------------------------------------------------------------------------------------
REPORTED CREDIT CREDIT SPECIAL OPERATING
RESULTS (a) COSTS (b) CARD (c) ITEMS (d) BASIS
EARNINGS
<S> <C> <C> <C> <C> <C>
Market-Sensitive Revenue $ 1,836 $ - $ - $ - $ 1,836
Less Market-Sensitive Revenue 3,780 - 246 (166) 3,860
---------- ----------- ----------- --------- ----------
Total Revenue 5,616 - 246 (166) 5,696
Noninterest Expense 3,068 (3) - (100) 2,965
---------- ----------- ----------- --------- ----------
Operating Margin 2,548 3 246 (66) 2,731
Credit Costs 388 3 246 - 637
---------- ----------- ----------- --------- ----------
Income Before Restructuring Costs 2,160 - - (66) 2,094
Restructuring Costs - - - - -
---------- ----------- ----------- --------- ----------
Income Before Income Tax Expense 2,160 - - (66) 2,094
Tax Expense 767 - - (24) 743
---------- ----------- ----------- --------- ----------
---------- --------- ----------
Net Income $ 1,393 $ - $ - $ (42) $ 1,351
---------- ----------- ----------- --------- ----------
NET INCOME PER COMMON SHARE
Basic $ 1.65 $ 1.60
Diluted $ 1.60 $ 1.55
------------------------------------------------------------------------------------------------------------------------
SECOND QUARTER 1998
------------------------------------------------------------------------------------------------------------------------
REPORTED CREDIT CREDIT SPECIAL OPERATING
RESULTS (a) COSTS (b) CARD (c) ITEMS (d) BASIS
EARNINGS
Market-Sensitive Revenue $ 1,413 $ - $ - $ - $ 1,413
Less Market-Sensitive Revenue 3,342 - 286 - 3,628
---------- ----------- ----------- --------- ----------
Total Revenue 4,755 - 286 - 5,041
Noninterest Expense 2,714 (2) - - 2,712
---------- ----------- ----------- --------- ----------
Operating Margin 2,041 2 286 - 2,329
Credit Costs 328 2 286 - 616
---------- ----------- ----------- --------- ----------
Income Before Restructuring Costs 1,713 - - - 1,713
Restructuring Costs 8 - - (8) -
---------- ----------- ----------- --------- ----------
Income Before Income Tax Expense 1,705 - - 8 1,713
Tax Expense 631 - - 3 634
---------- ----------- ----------- --------- ----------
Net Income $ 1,074 $ - $ - $ 5 $ 1,079
---------- ----------- ----------- --------- ----------
NET INCOME PER COMMON SHARE
Basic $ 1.24 $ 1.24
Diluted $ 1.20 $ 1.21
------------------------------------------------------------------------------------------------------------------------
Note: Charge-offs for risk management instruments, previously included in credit costs, are now netted against trading
revenue. All prior periods have been restated.
(a) Represent amounts shown in Chase's financial statements, except that
revenues are categorized between market-sensitive revenue and less
market-sensitive revenue, and restructuring costs have been separately
displayed. Market-sensitive revenue includes investment banking fees,
trading-related revenue (including trading-related net interest income),
securities gains and private equity gains. (b) For purposes of Operating
Basis presentation, foreclosed property expense is reclassified from
noninterest expense to
credit costs.
(c) This column excludes the impact of credit card securitizations.
(d)Includes restructuring costs and special items. The second quarter of
1999 includes gains on the sales of One New York Plaza and branches in
Beaumont, Texas of $166 million pre-tax ($107 million after-tax), and
a special contribution to The Chase Manhattan Foundation of $100
million pre-tax ($65 million after-tax). The second quarter of 1998
included merger-related restructuring costs of $8 million pre-tax ($5
million after-tax).
Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
OPERATING INCOME RECONCILIATION
(in millions, except per share data)
-------------------------------------------------------------------------------------------------------------------------
SIX MONTHS 1999
-------------------------------------------------------------------------------------------------------------------------
REPORTED CREDIT CREDIT SPECIAL OPERATING
RESULTS (a) COSTS (b) CARD (c) ITEMS (d) BASIS
EARNINGS
<S> <C> <C> <C> <C> <C>
Market-Sensitive Revenue $ 3,471 $ - $ - $ - $ 3,471
Less Market-Sensitive Revenue 7,289 - 515 (166) 7,638
----------- ----------- ---------- ---------- ------------
Total Revenue 10,760 - 515 (166) 11,109
Noninterest Expense 6,013 (8) - (100) 5,905
----------- ----------- ---------- ---------- ------------
Operating Margin 4,747 8 515 (66) 5,204
Credit Costs 769 8 515 - 1,292
----------- ----------- ---------- ---------- ------------
Income Before Restructuring Costs 3,978 - - (66) 3,912
Restructuring Costs - - - - -
----------- ----------- ---------- ---------- ------------
Income Before Income Tax Expense 3,978 - - (66) 3,912
Tax Expense 1,412 - - (24) 1,388
----------- ----------- ---------- ---------- ------------
Net Income $ 2,566 $ - $ - $ (42) $ 2,524
----------- ----------- ---------- ---------- ------------
NET INCOME PER COMMON SHARE
Basic $ 3.02 $ 2.97
Diluted $ 2.92 $ 2.87
-------------------------------------------------------------------------------------------------------------------------
SIX MONTHS 1998
-------------------------------------------------------------------------------------------------------------------------
REPORTED CREDIT CREDIT SPECIAL OPERATING
RESULTS (a) COSTS (b) CARD (c) ITEMS (d) BASIS
EARNINGS
Market-Sensitive Revenue $ 2,830 $ - $ - $ - $ 2,830
Less Market-Sensitive Revenue 6,548 - 566 - 7,114
----------- ----------- ---------- ---------- ------------
Total Revenue 9,378 - 566 - 9,944
Noninterest Expense 5,334 (6) - - 5,328
----------- ----------- ---------- ---------- ------------
Operating Margin 4,044 6 566 - 4,616
Credit Costs 660 6 566 - 1,232
----------- ----------- ---------- ---------- ------------
Income Before Restructuring Costs 3,384 - - - 3,384
Restructuring Costs 529 - - (529) -
----------- ----------- ---------- ---------- ------------
Income Before Income Tax Expense 2,855 - - 529 3,384
Tax Expense 1,056 - - 196 1,252
----------- ----------- ---------- ---------- ------------
Net Income $ 1,799 $ - $ - $ 333 $ 2,132
----------- ----------- ---------- ---------- ------------
NET INCOME PER COMMON SHARE
Basic $ 2.06 $ 2.45
Diluted $ 2.00 $ 2.38
-------------------------------------------------------------------------------------------------------------------------
Note: Charge-offs for risk management instruments, previously included in
credit costs, are now netted against trading revenue.All prior
periods have been restated.
(a) Represent amounts shown in Chase's financial statements, except that
revenues are categorized between market-sensitive revenue and less
market-sensitive revenue, and restructuring costs have been separately
displayed. Market-sensitive revenue includes investment banking fees,
trading-related revenue (including trading-related net interest income),
securities gains and private equity gains. (b) For purposes of Operating
Basis presentation, foreclosed property expense is reclassified from
noninterest expense to credit costs. (c) This column excludes the impact
of credit card securitizations. (d) Includes restructuring costs and
special items. See the second quarter operating income reconciliation for
a description of the 1999 special items (there were no special items in
the 1999 first quarter). The 1998 six months included a $510 million
pre-tax charge ($320 million after-tax) taken in connection with
initiatives to streamline support functions, and merger-related
restructuring costs of $19 million pre-tax ($13 million after-tax).
Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions)
%
June 30, Over/(Under)
-------------------------------
1999 1998 1998
-------------- -------------- --------------
ASSETS
<S> <C> <C> <C>
Cash and Due from Banks $ 16,037 $ 15,691 2%
Deposits with Banks 5,851 5,970 (2%)
Federal Funds Sold and Securities
Purchased Under Resale Agreements 28,052 25,128 12%
Trading Assets:
Debt and Equity Instruments 26,232 33,651 (22%)
Risk Management Instruments 25,115 33,280 (25%)
Securities 49,190 54,928 (10%)
Loans 175,041 168,705 4%
Allowance for Loan Losses (3,554) (3,629) (2%)
Net Loans 171,487 165,076 4%
Other Assets 34,904 33,271 5%
-------------- --------------
TOTAL ASSETS $ 356,868 $ 366,995 (3%)
============== ==============
LIABILITIES
Deposits:
Domestic:
Noninterest-Bearing $ 49,874 $ 47,966 4%
Interest-Bearing 81,068 75,418 7%
Foreign:
Noninterest-Bearing 4,645 4,109 13%
Interest-Bearing 73,915 79,598 (7%)
Total Deposits 209,502 207,091 1%
Federal Funds Purchased and Securities
Sold Under Repurchase Agreements 40,899 45,672 (10%)
Commercial Paper 5,047 5,299 (5%)
Other Borrowed Funds 6,613 7,354 (10%)
Trading Liabilities 36,835 46,866 (21%)
Accounts Payable, Accrued Expenses and Other Liabilities 15,145 15,162 --
Long-Term Debt 17,031 14,451 18%
Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated Deferrable Interest Debentures 2,538 1,940 31%
-------------- --------------
TOTAL LIABILITIES 333,610 343,835 (3%)
-------------- --------------
PREFERRED STOCK OF SUBSIDIARY 550 550 --
-------------- --------------
STOCKHOLDERS' EQUITY
Preferred Stock 1,028 1,168 (12%)
Common Stock 882 882 --
Capital Surplus 9,628 9,738 (1%)
Retained Earnings 15,381 12,211 26%
Accumulated Other Comprehensive Income (722) 113 NM
Treasury Stock, at Cost (3,489) (1,502) 132%
-------------- --------------
TOTAL STOCKHOLDERS' EQUITY 22,708 22,610 --
-------------- --------------
TOTAL LIABILITIES, PREFERRED STOCK OF SUBSIDIARY
AND STOCKHOLDERS' EQUITY $ 356,868 $ 366,995 (3%)
============== ==============
NM - Not meaningful
Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
(in millions)
Six Months Ended June 30,
----------------------------------
------------ ------------
1999 1998
------------ ------------
Preferred Stock:
<S> <C> <C>
Balance at Beginning of Year $ 1,028 $ 1,740
Issuance of Stock - 200
Redemption of Stock - (772)
------------ ------------
Balance at End of Period $ 1,028 $ 1,168
------------ ------------
Common Stock:
Balance at Beginning of Year $ 882 $ 441
Issuance of Common Stock for a Two-for-One Stock Split - 441
------------ ------------
------------ ------------
Balance at End of Period $ 882 $ 882
------------ ------------
Capital Surplus:
Balance at Beginning of Year $ 9,836 $ 10,360
Issuance of Common Stock for a Two-for-One Stock Split - (441)
Shares Issued and Commitments to Issue Common Stock
for Employee Stock-Based Awards and Related Tax Effects (208) (181)
------------ ------------
Balance at End of Period $ 9,628 $ 9,738
------------ ------------
Retained Earnings:
Balance at Beginning of Year $ 13,544 $ 11,086
Net Income 2,566 1,799
Cash Dividends Declared:
Preferred Stock (36) (58)
Common Stock (693) (616)
------------ ------------
Balance at End of Period $ 15,381 $ 12,211
------------ ------------
Accumulated Other Comprehensive Income (Loss):
Balance at Beginning of Year $ 392 $ 112
Other Comprehensive Income (Loss) (1,114) 1
------------ ------------
Balance at End of Period $ (722) $ 113
------------ ------------
Common Stock in Treasury, at Cost:
Balance at Beginning of Year $ (1,844) $ (1,997)
Purchase of Treasury Stock (3,057) (268)
Reissuance of Treasury Stock 1,412 763
------------ ------------
Balance at End of Period $ (3,489) $ (1,502)
------------ ------------
Total Stockholders' Equity $ 22,708 $ 22,610
============ ============
-------------------------------------------------------------------------------------------------------
Comprehensive Income:
Net Income $ 2,566 $ 1,799
Other Comprehensive Income (Loss) (1,114) 1
------------ ------------
============ ============
Comprehensive Income $ 1,452 $ 1,800
============ ============
Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
CREDIT RELATED INFORMATION
(in millions, except ratios)
% %
Credit-Related Assets Over/(Under) Nonperforming Assets Over/(Under)
--------------------------- -------------------------
June 30, 1999 1998 1998 1999 1998 1998
------------------------------------------------- ------------- ------------ ---------- ------------ ----------- ----------
CONSUMER LOANS Domestic Consumer:
<S> <C> <C> <C> <C> <C> <C>
1-4 Family Residential Mortgages $ 42,003 $ 41,218 2% $ 303 $ 374 (19%)
Credit Card - Reported 15,270 13,034 17% -- -- --
Credit Card Securitizations (a) 16,944 18,219 (7%) -- -- --
------------- ------------ ------------ -----------
Credit Card - Managed 32,214 31,253 3% -- -- --
Auto Financings 18,301 13,080 40% 59 42 40%
Other Consumer 6,299 8,355 (25%) 5 8 (38%)
------------- ------------ ------------ -----------
Total Domestic Consumer 98,817 93,906 5% 367 424 (13%)
Total Foreign Consumer 2,860 2,935 (3%) 27 20 35%
------------- ------------ ------------ -----------
Total Consumer Loans 101,677 96,841 5% 394 444 (11%)
------------- ------------ ------------ -----------
COMMERCIAL LOANS Domestic Commercial:
Commercial and Industrial 52,037 48,394 8% 405 342 18%
Commercial Real Estate 3,733 4,552 (18%) 52 67 (22%)
------------- ------------ ------------ -----------
Total Domestic Commercial 55,770 52,946 5% 457 409 12%
Total Foreign Commercial 34,538 37,137 (7%) 641 369 74%
------------- ------------ ------------ -----------
Total Commercial Loans 90,308 90,083 -- 1,098 778 41%
------------- ------------ ------------ -----------
------------- ------------ -----------
Derivative and FX Contracts 25,558 33,654 (24%) 36 28 29%
------------- ------------ ------------ -----------
------------- ------------
Total Commercial Credit-Related 115,866 123,737 (6%) 1,134 806 41%
------------- ------------ ------------ -----------
============= ============
Total Managed Credit-Related $ 217,543 $ 220,578 (1%) 1,528 1,250 22%
============= ============ ------------ -----------
Assets Acquired as Loan Satisfactions 105 115 (9%)
------------ -----------
============ ===========
Total Nonperforming Assets $ 1,633 $ 1,365 20%
============ ===========
---------------------------------------------------------------------------------------------------------------------------------
% %
Second Quarter Over/(Under) Six Months Over/(Under)
-------------- -------------
------------- ------------ ------------ -----------
Net Charge-Offs 1999 1998 1998 1999 1998 1998
------------------------------------------------- ------------- ------------ ---------- ------------ ----------- ----------
CONSUMER LOANS Domestic Consumer:
1-4 Family Residential Mortgages $ 9 $ 6 50% $ 10 $ 16 (38%)
Credit Card - Reported 218 184 18% 434 363 20%
Credit Card Securitizations (a) 246 286 (14%) 515 566 (9%)
------------- ------------ ------------ -----------
Credit Card - Managed 464 470 (1%) 949 929 2%
Auto Financings 19 18 6% 38 41 (7%)
Other Consumer 47 43 9% 95 84 13%
------------- ------------ ------------ -----------
Total Domestic Consumer 539 537 -- 1,092 1,070 2%
Total Foreign Consumer 9 5 80% 18 8 125%
------------- ------------ ------------ -----------
Total Consumer Loans 548 542 1% 1,110 1,078 3%
------------- ------------ ------------ -----------
COMMERCIAL LOANS Domestic Commercial:
Commercial and Industrial 32 (27) NM 77 (18) NM
Commercial Real Estate (2) (3) NM (11) (6) NM
------------- ------------ ------------ -----------
Total Domestic Commercial 30 (30) NM 66 (24) NM
Total Foreign Commercial 56 102 (45%) 107 172 (38%)
------------- ------------ ------------ -----------
Total Commercial Loans 86 72 19% 173 148 17%
------------- ------------ ------------ -----------
Total Managed Net Charge-offs (b) $ 634 $ 614 3% $ 1,283 $ 1,226 5%
============= ============ ============ ===========
(a) Represents the portion of Chase's credit card receivables that have been
securitized.
(b) Excludes charge-offs for risk management instruments of $10 million in the
second quarter of 1998 and $22 million for the first six months of 1998,
which are netted against trading revenues.
NM - Not meaningful
Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
CREDIT RELATED INFORMATION (Continued)
As of or For The As of or For The
Three Months Ended Six Months Ended
MANAGED CREDIT CARD PORTFOLIO * June 30, June 30,
---------------------- ----------------------
---------- ----------- ----------- ----------
(in millions, except ratios) 1999 1998 1999 1998
------------------------------------------------ ---------- ----------- ----------- ----------
Average Credit Card Receivables $ 32,553 $ 31,906 $ 32,323 $ 32,155
Past Due 90 Days or More and Accruing $ 587 $ 658 $ 587 $ 658
As a Percentage of Average Credit Card Receivables 1.80% 2.06% 1.82% 2.05%
Net Charge-offs $ 472 $ 474 $ 962 $ 936
As a Percentage of Average Credit Card Receivables 5.80% 5.94% 5.95% 5.82%
* Includes domestic and international credit card activity.
----------------------------------------------------------------------------------------------------------------------
SELECTED COUNTRY EXPOSURE (a)
(in billions)
At June 30, 1999 At Dec. 31, 1998
--------------------------------------------------------------------- -----------------------
Country Country
Gross Net Related Net Related
Local Less Cross- Resale Cross- Resale
Lending- Trading- Country Local Border Agree- Border Agree-
LATIN AMERICA Related (b) Related (c) Assets Funding Exposure (a)ments (a) Exposure ments
-----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Brazil $ 1.6 $ 0.3 $ 0.3 $ (0.3) $ 1.9 $ 1.0 $ 2.3 $ 0.9
Argentina 1.8 0.3 0.3 (0.3) 2.1 0.7 2.3 0.5
Mexico 1.0 0.6 0.3 (0.3) 1.6 0.4 1.8 0.4
Chile 1.0 - 0.2 (0.2) 1.0 - 0.9 -
Colombia 0.7 - - - 0.7 - 0.8 -
Venezuela 0.2 0.1 - - 0.3 0.2 0.4 -
All Other Latin America (d) 0.4 0.3 0.8 (0.8) 0.7 0.1 1.0 -
----------- ---------- -------- ---------- ----------- ----------- ---------- ----------
Total Latin America $ 6.7 $ 1.6 $ 1.9 $ (1.9) $ 8.3 $ 2.4 $ 9.5 $ 1.8
----------- ---------- -------- ---------- ----------- ----------- ---------- ----------
ASIAN IMF COUNTRIES
-----------------------
South Korea $ 0.9 $ 0.2 $ 0.9 $ (0.5) $ 1.5 $ 0.1 $ 2.4 $ -
Indonesia 1.0 0.1 0.1 (0.1) 1.1 - 1.2 -
Thailand 0.2 0.1 0.8 (0.1) 1.0 - 0.9 -
----------- ---------- -------- ---------- ----------- ----------- ---------- ----------
Subtotal 2.1 0.4 1.8 (0.7) 3.6 0.1 4.5 -
OTHER EMERGING ASIA
-----------------------
Hong Kong 0.6 0.1 4.7 (4.7) 0.7 - 0.8 -
Singapore 0.6 0.1 0.3 (0.3) 0.7 - 0.8 -
Philippines 0.2 0.1 0.2 (0.2) 0.3 - 0.6 -
Malaysia 0.2 - 0.6 (0.1) 0.7 - 0.6 -
China 0.3 0.4 0.2 (0.1) 0.8 - 0.6 -
All Other Asia 0.4 0.1 0.3 (0.3) 0.5 - 0.5 -
----------- ---------- -------- ---------- ----------- ----------- ---------- ----------
Total Asia excluding
Japan, Australia
and New Zealand $ 4.4 $ 1.2 $ 8.1 $ (6.4) $ 7.3 $ 0.1 $ 8.4 $ -
----------- ---------- -------- ---------- ----------- ----------- ---------- ----------
Japan $ 2.8 $ 2.3 $ 1.8 $ (1.8) $ 5.1 $ 1.3 $ 5.2 $ 1.7
Australia 0.4 0.4 2.5 (2.1) 1.2 - 1.9 -
New Zealand 0.2 0.2 - - 0.4 - 0.6 -
----------- ---------- -------- ---------- ----------- ----------- ---------- ----------
Total Japan, Australia
and New Zealand $ 3.4 $ 2.9 $ 4.3 $ (3.9) $ 6.7 $ 1.3 $ 7.7 $ 1.7
----------- ---------- -------- ---------- ----------- ----------- ---------- ----------
(a) Estimated cross-border disclosure is based on the Federal Financial
Institutions Examination Council ("FFIEC") guidelines governing the
determination of cross-border risk. Under FFIEC guidelines, resale
agreements are reported by the country of the issuer of the underlying
security. Chase, however, does not consider the cross-border risk of
resale agreements to depend upon the country of the issuer of the
underlying security and, as a result, has presented these amounts
separately in the above table.
(b) Includes loans and accrued interest, interest-bearing deposits with
banks, acceptances, other monetary assets, issued letters of credit
and undrawn commitments to extend credit.
(c) Includes cross-border trading debt and equity instruments and the
mark-to-market exposure of foreign exchange and derivative contracts.
The amounts associated with foreign exchange and derivative contracts
are presented after taking into account the impact of legally
enforceable master netting agreements.
(d) Excludes Bermuda and Cayman Islands.
Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE CHASE MANHATTAN CORPORATION
Condensed Average Consolidated Balance Sheet, Interest and Rates
(Taxable-Equivalent Interest and Rates; in millions)
Second Quarter 1999 Second Quarter 1998
----------------------------------- -----------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Liquid Interest-Earning Assets $ 63,168 $ 961 6.10% $ 74,462 $ 1,418 7.64%
Securities 52,767 749 5.70% 57,033 895 6.29%
Loans 173,067 3,168 7.34% 167,807 3,319 7.93%
Total Interest-Earning Assets 289,002 4,878 6.77% 299,302 5,632 7.55%
Noninterest-Earning Assets 72,055 74,749
Total Assets $ 361,057 $ 374,051
LIABILITIES
Interest-Bearing Deposits $ 158,656 1,558 3.94% $ 151,628 1,784 4.72%
Short-Term and Long-Term Debt 90,516 1,170 5.18% 104,505 1,803 6.92%
Total Interest-Bearing Liabilities 249,172 2,728 4.39% 256,133 3,587 5.62%
Noninterest-Bearing Deposits 47,652 45,757
Other Noninterest-Bearing Liabilities 40,669 49,402
Total Liabilities 337,493 351,292
PREFERRED STOCK OF SUBSIDIARY 550 550
STOCKHOLDERS' EQUITY
Preferred Stock 1,028 1,255
Common Stockholders' Equity 21,986 20,954
Total Stockholders' Equity 23,014 22,209
Total Liabilities, Preferred Stock of Subsidiary
and Stockholders' Equity $ 361,057 $ 374,051
INTEREST RATE SPREAD 2.38% 1.93%
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS $ 2,150 2.98% $ 2,045 2.74%
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS (a) $ 2,491 3.26% $ 2,416 3.05%
-------------------------------------------------------------------------------------------------------------------
Six Months Ended Six Months Ended
June 30, 1999 June 30, 1998
----------------------------------- -----------------------------------
Average Rate Average Rate
Balance Interest (Annualized) Balance Interest (Annualized)
ASSETS
Liquid Interest-Earning Assets $ 60,986 $ 1,944 6.43% $ 74,915 $ 2,917 7.85%
Securities 55,931 1,588 5.73% 56,313 1,789 6.41%
Loans 172,993 6,377 7.43% 169,142 6,724 8.02%
Total Interest-Earning Assets 289,910 9,909 6.89% 300,370 11,430 7.67%
Noninterest-Earning Assets 74,067 75,442
Total Assets $ 363,977 $ 375,812
LIABILITIES
Interest-Bearing Deposits $ 160,804 3,156 3.96% $ 151,469 3,599 4.79%
Short-Term and Long-Term Debt 89,387 2,395 5.40% 105,041 3,617 6.94%
Total Interest-Bearing Liabilities 250,191 5,551 4.47% 256,510 7,216 5.67%
Noninterest-Bearing Deposits 47,815 45,165
Other Noninterest-Bearing Liabilities 42,056 51,468
Total Liabilities 340,062 353,143
PREFERRED STOCK OF SUBSIDIARY 550 550
STOCKHOLDERS' EQUITY
Preferred Stock 1,028 1,467
Common Stockholders' Equity 22,337 20,652
Total Stockholders' Equity 23,365 22,119
Total Liabilities, Preferred Stock of Subsidiary
and Stockholders' Equity $ 363,977 $ 375,812
INTEREST RATE SPREAD 2.42% 2.00%
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS $ 4,358 3.03% $ 4,214 2.83%
NET INTEREST INCOME AND NET YIELD
ON INTEREST-EARNING ASSETS (a) $ 5,026 3.29% $ 4,933 3.13%
(a) Excludes the impact of the credit card securitizations.
Unaudited
</TABLE>
