Mellon Bank

Bank of New York withdrew its $21.8-billion buyout bid for Mellon Bank Corp., citing Mellon management's refusal to discuss the offer. Mellon said its board had unanimously rejected a meeting. Bank of New York had made an unsolicited offer to acquire the Pittsburgh-based banking company for stock April 22, saying a combined company would be better able to compete in the rapidly consolidating financial services industry. Mellon rejected the offer.

The $1.7-billion merger of Mellon Bank Corp. and mutual fund giant Dreyfus Corp. raises a host of questions for depositors and investors. How can consumers keep clear, for instance, the distinctions between a bank's money market account and the bank mutual fund's money market account? Which products are FDIC insured and which are not? Will your bank go out and buy a mutual fund company--or will your mutual fund company be purchased by a bank?

Wells Fargo said Tuesday that its earnings in the second quarter were slightly better than in the first quarter and that it had showed continued improvement in reducing bad loans. Like all major banking companies, Wells Fargo's earnings of $124.4 million in the quarter were a sharp improvement over the same period last year when the company lost $293.7 million as a result of increasing its reserves for loans to Latin America.

Bank merger mania turned nasty Wednesday as Bank of New York Co. launched a $24-billion hostile bid for Mellon Bank Corp. that analysts say is likely to fuel more bank deals involving less-than-friendly partnerships. The hostile takeover attempt--highly unusual in the staid banking industry--stands in stark contrast to several recent bank deals that have been announced with much fanfare by those banks' executives.

The biggest U.S. banks reported strong first-quarter profits Tuesday, beating Wall Street's expectations as trading and core business operations showed solid growth and financial markets soared. Chase Manhattan Corp., the nation's largest bank-holding company, said profit from operations rose 11% to $1.05 billion, or $2.35 a diluted share, from $949 million, or $2.02, in the year-ago quarter. The latest results beat the average forecast of $2.26 a share, based on a survey by First Call Corp.

Chemical New York Corp. and Mellon Bank Corp. on Tuesday became the latest of the major bank holding companies to report steep second-quarter losses as a result of their decision to increase loan-loss reserves to cover troubled Third World loans. Chemical, the nation's seventh-largest bank holding company, said it lost $1.10 billion in the three months ended June 30, compared to earnings of $98 million in the year-ago quarter. The company had posted a loan-loss provision of $1.

Mellon Bank Corp. said Monday that it will shift $1 billion in bad loans into a new independent bank to stabilize Mellon's earnings and improve its recently troubled finances. "Last June, we said we'd deal with our problems as aggressively as we could . . . that we were not going to disembowel the company in any form. This step is just a logical extension," said Frank V. Cahouet, chairman of the bank holding company that ranked as the nation's 16th largest at the end of 1987.

Wells Fargo reported sharply higher earnings for the first quarter of the year on Tuesday, joining a growing list of the nation's big banks that are emerging from last year's financial difficulties related to foreign loans. San Francisco-based Wells Fargo said its profits for the quarter totaled $120.4 million, an increase of 54% over the first quarter of 1987. The bank said the improved results stemmed from increased revenue, an improved loan picture and reduced operating expenses.

Wells Fargo & Co., the San Francisco-based bank that bet heavily on what has turned into a moribund commercial real estate market in California, disclosed a troublesome rise in problem loans Tuesday even as its second-quarter profit jumped fivefold from a year ago.

Four of the nation's leading bank holding companies Tuesday reported higher third-quarter earnings, while a fifth reported a drop in profit. Wells Fargo & Co., Citicorp, Manufacturers Hanover and Bankers Trust New York Corp. reported profit gains. Mellon Bank Corp. reported a drop in its profit.