Printer Friendly

DUFF & PHELPS UPGRADES CONTINENTAL BANK CORPORATION

 CHICAGO, May 11 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has upgraded the ratings of Continental Bank Corporation and its principal operating subsidiary, Continental Bank, N.A. The senior debt rating of Continental Bank Corporation is raised to `BBB+' (triple B plus) from `BBB' (triple B), subordinated debt to `BBB' from `BBB-' (triple B minus), and preferred stock to `BBB-' (triple B minus) from `BB+' (double B plus). The commercial paper rating is reaffirmed at Duff 2. The long-term deposit rating of Continental Bank, N.A. is upgraded to `A-' (single A minus) from `BBB+' (triple B plus) and the subordinated debt rating is raised to `BBB+' (triple B plus) from `BBB' (triple B). The short-term deposit rating is raised to Duff 1- (one minus) from Duff 2. A total of approximately $950 million is affected by this upgrade.
 The upgrades reflect the corporation's improved earnings performance, enhanced capital position, progress in its corporate banking strategy, and improving trends within the loan portfolio. Further, we expect the improvement in the underlying trends within the loan portfolio to result in reductions in non-performing assets.
 Profitability improvement reflects progress in building revenues within the core lines of business while maintaining strong control over expenses. Continental has done an effective job of reconfiguring the infrastructure of the organization to improve efficiencies without significantly reducing revenue generating capabilities. The international office network was restructured, underperforming components of businesses eliminated, and operating functions have been streamlined.
 This effort should permit Continental to produce respectable earnings even during a relatively slow growth environment. However, revenues do show some variability in composition due to the volatility in certain lines of business including trading and equity investments. While Continental has made progress in expanding profit opportunities within its customer base, including both non-credit related and spread related, continued penetration within its existing customer base and increasing relationships is critical to growing core earnings.
 Continental significantly increased its equity base over the 15 months ended March 31, 1993, with stockholders' equity up $300 million or 20 percent. As a result of its corporate banking strategy, the balance sheet has been downsized which has also positively affected capitalization ratios. Stockholders' equity equaled 8.2 percent of assets at March 31, 1993, compared with 7.5 percent and 6.3 percent three months and fifteen months earlier, respectively. Equity equaled 15 percent of loans at the close of the first quarter.
 During this period of real estate market instability and economic weakness, asset quality deteriorated. Problems are centered in the real estate loan portfolio, specifically California residential development. California residential real estate assets approximated $524 million at March 31, 1993, with 57 percent of the portfolio on non-performing status. While this portfolio will be slow to show material improvement, we believe problem areas have been identified. Further, other components of the loan portfolio should show significant progress which will result in material improvement in asset quality measures as the year progresses.
 Continental Bank Corporation ranked as the 34th largest U.S. bank holding company at Dec. 31, 1992, and reported total assets of $22.0 billion at the end of the first quarter.
 -0- 5/11/93
 /CONTACTS: Charles J. Orabutt, Jr., 312-368-3153, or Daryl R. Leehaug, 312-368-3124, both of Duff & Phelps Credit Rating Co./
 (CBK)


CO: Continental Bank Corporation ST: Illinois IN: FIN SU: RTG

SM -- NY073 -- 7140 05/11/93 14:27 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:May 11, 1993
Words:563
Previous Article:CANADIAN NATIONAL OFFERS DEBT SECURITIES
Next Article:TEXACO CEO ALFRED C. DeCRANE, JR., SAYS COMPANY'S PLANS BUILD ON COMPETITIVE STRENGTH
Topics:


Related Articles
DUFF & PHELPS: PNC BANK CORP. CREDIT RATINGS UPGRADED
DUFF & PHELPS: CONTINENTAL BANK CORPORATION $150 MILLION FLOATING RATE EURONOTES RATED 'BBB+'
DUFF & PHELPS: CHASE MANHATTAN CORPORATION $100 MILLION SUBORDINATED NOTES RATED 'BBB+'
CRESTAR FINANCIAL CORPORATION CREDIT RATINGS UPGRADED BY DUFF & PHELPS
DUFF PHELPS CREDIT RATING CO. UPGRADES NORWEST CORPORATION SENIOR DEBT TO 'AA'
DUFF & PHELPS: SHAWMUT NATIONAL CORPORATION RATINGS UPGRADED
DUFF & PHELPS CREDIT RATING CO. UPGRADES FLEET FINANCIAL GROUP CREDIT RATINGS
DUFF & PHELPS: NORWEST CORPORATION $100 MILLION MEDIUM-TERM-NOTES RATED 'AA'
DUFF AND PHELPS REMOVES SIGNET FROM RATING WATCH--DOWN
DCR Upgrades Barnett Banks, Inc.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters