Continental Illinois added to its loan-loss reserve.

Chicago-based Continental Illinois Corp. added $500 million to its reserve, joining the long line of banks setting aside huge sums to cope with dubious loans to developing countries. Continental, the 14th-largest U.S. banking group and still largely owned by the federal government after a $4.5-billion bailout three years ago, said the accounting move will give it a loss of $470 million in the second fiscal quarter and a loss of $300 million for the year.