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GREAT WESTERN FINANCIAL PREFERRED STOCK RATED 'BBB' BY FITCH -- FITCH FINANCIAL WIRE --

 GREAT WESTERN FINANCIAL PREFERRED STOCK RATED 'BBB' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Sept. 4 /PRNewswire/ -- Great Western Financial's $150 million of cumulative preferred stock is rated "BBB" by Fitch. The shares are non-callable for five years. The rating is based on the company's strong capital of $2.4 billion, solid liquidity and positive earnings, which are somewhat offset by a weakening asset quality due to the company's large California mortgage loan portfolio. The credit trend is uncertain.
 Great Western's asset quality has declined due mostly to the depressed California economy. This has been reflected in the sizeable increase in one- to four-family residential mortgage loan delinquencies of $458 million since Dec. 30, 1990. Great Western's nonperforming assets were roughly 5.59 percent of total loans (excluding mortgage backed securities) and real estate owned as of June 30, 1992. However, Fitch believes that Great Western's strong capital base and core earnings will lessen the impact of further asset quality deterioration.
 Great Western posted net earnings of $150.6 million for 1992's first six months. Earnings were boosted from a wider average net interest margin of 3.89 percent and higher loan originations of roughly $5.6 billion during the first six months. Great Western's general and administrative expenses, excluding amortization of intangibles, are high at 2.30 percent of average assets, reflecting heavy acquisition activity over the past couple of years. Return on assets was .61 percent for the 1992's first six months adjusted for accounting changes of $31.1 million.
 Great Western's principal subsidiary, Great Western Bank, met all fully-phased in capital requirements as of June 30, 1992. The bank's capital ratios were 9.45 percent for fully phased-in risk-based capital and 5.17 percent for its core capital ratio.
 -0- 9/4/92
 /CONTACT: Teri L. Seelig of Fitch, 212-908-0638/
 (GWF) CO: Great Western Financial Corp. ST: California IN: FIN SU: RTG


GK -- NY013 -- 6841 09/04/92 10:03 EDT
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Publication:PR Newswire
Date:Sep 4, 1992
Words:324
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