SECURITY PACIFIC <SPC> ADDS 500 MLN TO RESERVE
Security Pacific Corp said it intends
to add 500 mln dlrs to its provision for credit losses during
the second quarter, a move that will result in a loss for the
period of about 175 mln dlrs.
    The company added, however, that it now expects to post a
profit for the full year of about 150 mln dlrs.
    Security Pacific said the reserve is specifically related
to its loans to the developing world.
    Security Pacific, which has assets of about 64 billion
dlrs, reported 1986 net income of 385.9 mln dlrs. Last year it
posted second quarter net income of 93.5 mln.
    In making the announcement, Security Pacific said the extra
500 mln dlrs will raise its reserve for credit losses to about
1.3 billion dlrs, or 2.8 pct of total loans and leases
outstanding.
    It said the amount of reserves allocated to Lesser
Developed Country (LDC) debt represents about one-third of the
company's total LDC debt portfolio.
    A spokesman said the company currently has LDC debt
exposure of about 1.8 billion dlrs. The company's total loan
portfolio at March 31 stood at 44.4 billion dlrs.
    The Security Pacific move follows similar provisions by
several other money center banks.
    Last month Citicorp <CCI> led the move by annoucing a three
billion dlr addition to its reserve to help bolster its
protection against uncertainties in the economic world.
    Chase Manhattan Corp <CMB> followed with a 1.6 billion dlr
addition to its credit loss reserve.
    "While our LDC debt exposure is relatively small, we think
that the LDC debt environment has been altered significantly
given the recent actions of other major financial
institutions," Security Pacific chairman Richard Flamson said
in a statement.
    Following its 500 mln dlr addition to the credit loss
reserve, its primary capital ratio at the end of the second
quarter will be about 7.4 pct, Security Pacific said.
    The company further stated that it anticipates continuing
its current dividend payment at an annual rate of 1.80 dlrs per
share.
    The company also stressed that it is not writing off loans
to the developing world but rather, adding to its reserves will
allow greater flexibility when dealing with these credits in
the future.
    Security Pacific also said it intends to play a continuing
role in meeting the needs of those countries.
    Security Pacific is the nation's sixth largest bank holding
company.
 Reuter
