European Stars and Stripes (Newspaper) - September 23, 1990, Darmstadt, Hesse                                Sunday september 23,1990 the stars and stripes Page 15chase tightens its be Thuge loss seen for 3rd Quarter by Brendan Murphy up business writer new York a Chase Manhattan corp. Said Friday that it is laying off 5,000 employees to Cut costs and expects a $625 million third Quarter loss after allocating $1 billion to cover bad Loans and a reorganization. Chase the second largest . Bank holding company after Citicorp issued its prediction of heavy quarterly losses just hours after calling rumours of its distress a absolutely false and a totally  while its capital position is adequate Chase said management is determined to Shore up the company a financial foundation. Executives led by Thomas g. Labrecque successor to retiring chairman Willard c. Butcher were to urge directors to Cut chases quarterly dividend to 30 cents a share from 62 cents. On the new York Stock Exchange chases common Stock plunged in heavy trading by $1 to $12.75 a share a about half what the Stock was trading at in june. Analysts said Chase a traditional bastion of new York Money Center finance is the first big Bank to take such heavy charges against earnings to cover expanding losses on Loans made to commercial real estate developers in the go go 1980s. But the Parent company of Chase Manhattan Bank probably will not be the last to do so they said. A a it a going to set the tone for other Banks to do similar moves a said analyst Denise Petsis of Argus research. A a it a going to be pretty profound and across the Board in terms of problems with the Money centers. A a it a a definite sign of what a happening in the Economy a she said. A the entire Industry is going through similar pressure but it is More for the Money Center Banks a said Frank Anderson a Bank analyst with Stephens inc. In Little Rock Ark. A i expect other Money Center Banks to go through the same problem a but not of this  chases troubles were Likely to feed speculation As to a possible merger with another new York institution. A i think it is premature to make any dire forecast about Chase but you Are Likely to see some major consolidation among the Money Center Banks a Anderson said. The 5,000 Job cuts announced by Chase were about 2,000 More than analysts had expected. The layoffs represent about 12 percent of the 41,000 employees Chase had worldwide before it began trimming its staff late in the summer. Chase said it added $650 million to its Cushion against possible loan losses and earmarked $350 million for restructuring costs. The $650 million loan loss provision reflects a accelerated deterioration of the commercial real estate Market and of chases loan portfolio. That had led rating agencies to downgrade chases credit standing. The Bank said it was a exiting certain under performing business activities a that is withdrawing from unprofitable activities at Home and overseas. A was a result of the above mentioned items the corporation expects to report an approximate $625 million after tax loss for the third Quarter of 1990,�?� the company said. The quarters Only Bright spot was a $117 million gain on the Sale of an office building in Frankfurt West Germany. Chase said it expects to save $300 a year through the moves including $225 million to be pared from its payroll. The Bank said it plans to spend $300 million on a business initiatives and $50 million to re adjust its balance Sheet. Chase said it had trimmed its staff by about 1,600 employees in August with a voluntary separation program in which employees with 10 years service were offered incentives to give up their jobs. Another 1,800 members of chases . Staff were to lose their jobs by years end for a total of 3,400. In Europe Chase said it will a consolidate and centralize certain trading and dealing activities a while in latin America and Asia it will a a streamline corporate finance and other operations. Overseas Job cuts will total 1,600. The Bank said it will continue to reshape its ailing balance Sheet with the Sale or Security nation a conversion into marketable securities a of consumer assets such As Home mortgage Loans and that it will sell certain foreign securities and Low yielding municipal Bonds. Earlier in the Day Chase moved to dispel a negative rumours that have been circulating. That it is having difficulty with its funding or experiencing other liquidity problems a calling them a absolutely  the rumours circulating in financial and banking circles in recent Days were a totally irresponsible a Chase said. Before the announcement Wall Street buzzed with rumours that the Bank was in a serious credit squeeze. Banks routinely Issue commercial paper a sort of iou to cover the Long term Loans that they write. Over the past few months chases credit rating was downgraded by some of the agencies that Issue opinions As to the risk to investors who put Money in corporate commercial paper and Bonds. Chases new rating a one step above junk Bonds a raised its borrowing costs. Last week Chase had to reset the interest rate paid on $200 million of its subordinated notes to yield a stunning 13.017 percent. Analysts said that rate was out of line but reflected investors  missing there Are no Mutual in today a paper due to transmission problems with the originating source in new York. The stars and stripes regrets that the information was not available at press time. Budget negotiators on Capitol Hill take their places around the negotiating table Friday for discussions on cuts in Federal spending. On hand from left Are Whit getting Down to business House chief of staff John Sununu budget director Richard Darman Treasury Secretary Nicholas Brady Senate minority Leader Bob Dole a Kan. Senate majority Leader George Mitchell a Maine House majority Leader Richard Gephardt do. And House speaker Thomas Foley a Wash