Chase Manhattan is far from happy with its Australian operations, but is hopeful of substantial improvement.

If this were our normal trading performance, we would be going home, said Lynn Anderson, Chase's top executive in Australia. He was commenting on the bank's first profit in Australia of the equivalent of just over US$60,000 for 1987.This modest achievement followed a loss of $1.8 million in 1986 and a loss of $3.8 million in 1985.

Chase launched its Australian operations late in 1985, when it formed a 50-50 partnership with the Australian Mutual Provident Society, or AMP, to establish Chase AMP Bank. It was dubbed The Champ bank. AMP is Australia's biggest life insurance company and the country's biggest investor.

Mr. Anderson said the results had been received positively by the board, which was confident that business would improve.

He said the financial performance did not reflect the encouraging progress made by the bank in the face of difficult conditions and intense competition.

He admitted that expenses relating to the opening of branches and

financial centers had been heavy.

He said the October stock market crash had not caused any particular difficulties in the corporate lending division.

Mr. Anderson said Chase Manhattan's initial ambitious plans in the retail banking market in Australia had been scaled down.

The consumer bank, in terms of profit, is a long-term investment. It is not something we can see major returns from in the next couple of years. There is a long road to go, Mr. Anderson said.

Chase Manhattan was one of 16 foreign banks (out of 42 applicants) granted licenses by the Australian government in 1985 to set up full banking services.

Four other U.S. banks besides Chase Manhattan received licenses: BankAmerica, Bankers Trust, Citibank and J.P. Morgan.

Chase Manhattan got off to a flying start by being the first of the foreign banks to open for business. Along with Citibank, it was one of only a few banks that plunged into the retail sector.

Through a nationwide network of some 1,300 automatic teller machines, Chase AMP offers the most-comprehensive retail coverage of any of the foreign banks.

Chase AMP is gaining support from the 2 million policyholders of AMP and the society's network of branches and field force of 3,500 insurance representatives.