The chairman of Continental Illinois National Bank admitted that the nation's seventh biggest bank grew too fast and said the bank would be less aggressive in coming years.

At a meeting with several reporters Wednesday night, Roger Anderson said that although the giant bank will continue to specialize in making loans to domestic corporations, "we are not seeking rapid growth. Therefore, we will be more selective" in taking on new business.

Continental has more loans outstanding to U. S. corporations than any other bank, including institutions such as Citibank and Bank of America that are nearly three times the size of the $46 billion Chicago bank. As a result of its rapid loan growth in the past five years, Continental's loan portfolio is the worst of the big 10 U. S. banks.

Continental was the biggest loser in the July 5 failure of Penn Square National Bank of Oklahoma City. Continental bought about $1 billion in oil and gas loans originally made by Penn Square. Continental already has said that about $2 million of those loans were bad, and analysts have said the list of poor credits bought from Penn Square probably will grow further in the coming months as the economy continues to falter and oil prices decline further.

The Penn Square debacle shocked the U. S. business community. Until last July, Continental was the darling of the nation's huge, so-called money-center banks. It grew swiftly but maintained a rapid profits growth as well.

Nearly a dozen key Continental officials have lost their jobs as a result of Penn Square, including George Baker, the bank's widely respected chief lending officer, who until July had been considered the candidate most likely to succeed Anderson as chairman when Anderson retires in 1985. Anderson said that the board has assured him his job is secure.

The chief executive refused to answer questions about Continental's involvement with Penn Square. Continental is the target of several lawsuits, and Anderson said the institution's lawyers would not permit him or other officials to talk about the affair.

But the Penn Square loans are only the most apparent of a growing roster of Continental loans that are not being paid on time, have gone bad already or are otherwise a problem. About $2 billion of the bank's loans were classified as nonperforming at the end of September.

Anderson said that the "quality of the loan portfolio" remains Continental's "prime problem." He said that because of the bank's well-publicized difficulties, Continental is paying 3/8 to 5/8 of a percentage point more than most of its competitors to buy deposits. But he said the situation has improved since the fall.

In order to rebuild the quality of its loan portfolio, Anderson said the bank will reduce the size of its "participations" in loans made by other banks and will be less likely to undercut other banks in order to get new loan business. He said the bank's chief goal during the coming years will be to increase profits by weeding out bad loans and taking fewer risks making new ones.

"Good earnings cover a lot of problems," he said. "They are the ultimate correcting factor."

Continental recorded a loss of $61 million during the second quarter and a small profit of $33 million in the third quarter.

He said, however, that until the U. S. economy rebounds, Continental and other banks will continue to see their problem loans grow.

Anderson said the decline in interest rates during the past six months has helped many of the bank's real estate loans. On Sept. 30, $500 million of the bank's $2 billion in problem loans were real estate-related.

Because of the rate decline, "We got loan repayments we wouldn't have gotten otherwise," he said, because condominiums and homes are selling better now than during the first nine months of the year.