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DUFF & PHELPS: CHEMICAL BANKING CORPORATION CREDIT RATINGS UPGRADED

 CHICAGO, April 29 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has upgraded the credit ratings of Chemical Banking Corporation, its lower tier holding company, Texas Commerce Bancshares, and its subsidiary banks. Chemical Banking Corporation and Texas Commerce Bancshares' senior debt rating is upgraded to `A' (single A) from `A-' (single A minus). Chemical's subordinated debt rating is raised to `A-' (single A minus) from `BBB+' (triple B plus) and the preferred stock rating is upgraded to `BBB+' (triple B plus) from `BBB' (triple B). The commercial paper rating is reaffirmed at Duff 1. The long-term deposit rating of Chemical Bank and Texas Commerce Bank, N.A. is raised to `A+' (single A plus) from 'A' (single A). The short-term deposit rating is reaffirmed at Duff 1. The long-term deposit rating of Chemical Bank, New Jersey, N.A., is raised to `A' (single A) from `A-' (single A minus) and the short-term deposit rating is reaffirmed at Duff 1. A total of $7 billion is affected by this upgrade.
 The upgrades reflect Chemical's significantly strengthened balance sheet measures, enhanced earnings power, and improved competitive position. While asset quality measures have lagged the improvement in other performance measures to date, developments in the fourth quarter of 1992 and the first quarter of 1993 are encouraging.
 Further, we expect additional progress in asset quality in 1993 and beyond. Improvement in credit ratings has been dependent upon progress in a number of areas which has resulted in a strengthening in the corporation's defensive characteristics, i.e., capital ratios, loss reserves, liquidity, core earnings, which has, in turn, produced opportunities to further enhance profitability.
 The first of these elements is increasing capital levels. Capital measures have been strengthened through equity issuance (the January 1992 issuance of $1.5 billion in common equity was critical) and retention of earnings. The second variable is realization of expense savings from the merger with Manufacturers Hanover Corporation. Chemical has effectively managed the integration while raising the original cost savings estimates from $625 million to $750 million. In 1992, $280 million in savings were realized. We are confident the remaining cost savings will be achieved within the expected time horizon.
 The most challenging area has been asset quality. Improvement in asset quality has been slow to materialize, although, we believe non- performing asset levels peaked at Sept. 30, 1992. Non-performing levels have declined in the two subsequent quarters. The slow progress in reducing problem assets is due in large part to the large component of real estate loans which generally require a longer workout period. However, we believe management has been conservative in its identification and management of problem assets and we expect improvement in loan quality measures in 1993.
 The new Chemical's leading position in several attractive lines of business as well as market recognition of the improvement in fundamentals have produced significant opportunities to grow revenues, particularly in areas such as trading, loan syndication, and derivative products. This revenue growth combined with overhead expense control resulted in a significantly improved level of profitability in 1992 and the first quarter of 1993. The strong level of core earnings provides significant flexibility for addressing asset quality problems and as asset quality charges subside in 1994 we expect further improvement in profitability.
 Chemical Banking Corporation ranked as the third largest U.S. bank holding company at March 31, 1993, with total assets of $147 billion.
 -0- 04/29/93
 /CONTACT: Charles J. Orabutt, Jr., CPA of Duff & Phelps Credit Rating Co., 312-368-3126/
 (CHL)


CO: Chemical Banking Corporation ST: New York IN: FIN SU: RTG

AH -- NY036 -- 2533 04/29/93 10:12 EDT
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Date:Apr 29, 1993
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