<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 1-5920
BANKERS TRUST NEW YORK CORPORATION
(Exact name of registrant as specified in its charter)
New York 13-6180473
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
280 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)
(212) 250-2500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No _______
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of October 31, 1995: Common Stock, $1 par value,
78,687,725 shares.
<PAGE> 1
BANKERS TRUST NEW YORK CORPORATION
September 30, 1995 FORM 10-Q
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statement of Income
Three Months Ended September 30, 1995 and 1994 2
Nine Months Ended September 30, 1995 and 1994 3
Consolidated Balance Sheet
At September 30, 1995 and December 31, 1994 4
Consolidated Statement of Changes in Stockholders'
Equity
Nine Months Ended September 30, 1995 and 1994 5
Consolidated Statement of Cash Flows
Nine Months Ended September 30, 1995 and 1994 6
Consolidated Schedule of Net Interest Revenue
Three Months and Nine Months Ended
September 30, 1995 and 1994 7
In the opinion of management, all material adjustments
necessary for a fair presentation of the financial position
and results of operations for the interim periods presented
have been made. All such adjustments were of a normal
recurring nature. The results of operations for the three
months and nine months ended September 30, 1995 are not
necessarily indicative of the results of operations for the
full year or any other interim period.
The financial statements included in this Form 10-Q should
be read with reference to the Corporation's 1994 Annual Report
as supplemented by the 1995 Forms 10-Q.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 36
SIGNATURE 37
<PAGE> 2
PART I. FINANCIAL INFORMATION
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Increase
THREE MONTHS ENDED SEPTEMBER 30, 1995 1994 (Decrease)
<S> <C> <C> <C>
NET INTEREST REVENUE
Interest revenue $1,556 $1,207 $349
Interest expense 1,352 943 409
Net interest revenue 204 264 (60)
Provision for credit losses 7 17 (10)
Net interest revenue after provision
for credit losses 197 247 (50)
NONINTEREST REVENUE
Trading 257 278 (21)
Fiduciary and funds management 174 188 (14)
Fees and commissions 152 163 (11)
Securities available for sale gains 10 28 (18)
Other 162 50 112
Total noninterest revenue 755 707 48
NONINTEREST EXPENSES
Salaries 196 200 (4)
Incentive compensation and employee benefits 187 197 (10)
Occupancy, net 41 40 1
Furniture and equipment 40 42 (2)
Other 264 234 30
Total noninterest expenses 728 713 15
Income before income taxes 224 241 (17)
Income taxes 69 72 (3)
NET INCOME $ 155 $ 169 $(14)
NET INCOME APPLICABLE TO COMMON STOCK $ 139 $ 161 $(22)
EARNINGS PER COMMON SHARE:
PRIMARY $1.72 $1.98 $(.26)
FULLY DILUTED $1.71 $1.98 $(.27)
Cash dividends declared per common share $1.00 $.90 $.10
</TABLE>
<PAGE> 3
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Increase
NINE MONTHS ENDED SEPTEMBER 30, 1995 1994 (Decrease)
<S> <C> <C> <C>
NET INTEREST REVENUE
Interest revenue $4,429 $3,673 $ 756
Interest expense 3,821 2,730 1,091
Net interest revenue 608 943 (335)
Provision for credit losses 21 17 4
Net interest revenue after provision
for credit losses 587 926 (339)
NONINTEREST REVENUE
Trading 258 416 (158)
Fiduciary and funds management 511 563 (52)
Fees and commissions 508 540 (32)
Securities available for sale gains 29 51 (22)
Other 378 279 99
Total noninterest revenue 1,684 1,849 (165)
NONINTEREST EXPENSES
Salaries 598 566 32
Incentive compensation and employee benefits 455 561 (106)
Occupancy, net 120 115 5
Furniture and equipment 122 118 4
Provision for severance-related costs 50 - 50
Other 795 682 113
Total noninterest expenses 2,140 2,042 98
Income before income taxes 131 733 (602)
Income taxes 42 219 (177)
NET INCOME $ 89 $ 514 $ (425)
NET INCOME APPLICABLE TO COMMON STOCK $ 53 $ 492 $ (439)
EARNINGS PER COMMON SHARE:
PRIMARY $.66 $5.97 $(5.31)
FULLY DILUTED $.65 $5.97 $(5.32)
Cash dividends declared per common share $3.00 $2.70 $.30
</TABLE>
<PAGE> 4
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ in millions, except par value)
(unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
ASSETS
Cash and due from banks $ 1,715 $ 1,985
Interest-bearing deposits with banks 1,605 3,390
Federal funds sold 29 2,544
Securities purchased under resale agreements 16,081 9,943
Securities borrowed 7,467 6,197
Trading assets 50,364 47,514
Securities available for sale 7,140 7,475
Loans 12,786 12,501
Allowance for credit losses (1,032) (1,252)
Premises and equipment, net 900 915
Due from customers on acceptances 461 378
Accounts receivable and accrued interest 3,168 2,356
Other assets 3,265 3,070
Total $103,949 $97,016
LIABILITIES
Deposits
Noninterest-bearing
In domestic offices $ 2,898 $ 3,285
In foreign offices 522 541
Interest-bearing
In domestic offices 5,052 5,769
In foreign offices 15,685 15,344
Total deposits 24,157 24,939
Trading liabilities 24,672 20,949
Securities sold under repurchase agreements 17,899 15,617
Other short-term borrowings 16,573 18,222
Acceptances outstanding 461 378
Accounts payable and accrued expenses 4,351 3,174
Other liabilities 2,171 2,328
Long-term debt 8,354 6,455
Total liabilities 98,638 92,062
PREFERRED STOCK OF SUBSIDIARY 250 250
STOCKHOLDERS' EQUITY
Preferred stock 865 395
Common stock, $1 par value
Authorized, 300,000,000 shares
Issued, 83,678,973 shares 84 84
Capital surplus 1,301 1,317
Retained earnings 3,295 3,494
Common stock in treasury, at cost:
1995, 5,085,045 shares;
1994, 5,609,707 shares (373) (416)
Other (111) (170)
Total stockholders' equity 5,061 4,704
Total $103,949 $97,016
</TABLE>
<PAGE> 5
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(in millions)
(unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1995 1994
<S> <C> <C>
PREFERRED STOCK
Balance, January 1 $ 395 $ 250
Preferred stock issued 470 350
Preferred stock redeemed - (205)
Balance, September 30 865 395
COMMON STOCK
Balance, January 1 and September 30 84 84
CAPITAL SURPLUS
Balance, January 1 1,317 1,321
Preferred stock issuance and conversion costs (17) (8)
Common stock distributed under employee
benefit plans 1 3
Balance, September 30 1,301 1,316
RETAINED EARNINGS
Balance, January 1 3,494 3,226
Net income 89 514
Cash dividends declared
Preferred stock (33) (21)
Common stock (235) (213)
Treasury stock distributed under employee benefit plans (20) (19)
Balance, September 30 3,295 3,487
COMMON STOCK IN TREASURY, AT COST
Balance, January 1 (416) (233)
Purchases of stock (13) (262)
Restricted stock granted, net 9 23
Treasury stock distributed under employee benefit plans 47 31
Balance, September 30 (373) (441)
COMMON STOCK ISSUABLE - STOCK AWARDS
Balance, January 1 160 143
Deferred stock awards granted, net 34 37
Deferred stock distributed (16) (1)
Balance, September 30 178 179
DEFERRED COMPENSATION - STOCK AWARDS
Balance, January 1 (63) (47)
Deferred stock awards granted, net (34) (38)
Restricted stock granted, net (7) (20)
Amortization of deferred compensation, net 42 47
Balance, September 30 (62) (58)
CUMULATIVE TRANSLATION ADJUSTMENTS
Balance, January 1 (336) (319)
Translation adjustments (9) (57)
Income taxes applicable to translation adjustments (4) 51
Balance, September 30 (349) (325)
SECURITIES VALUATION ALLOWANCE
Balance, January 1 69 109
Change in unrealized net gains, after applicable
income taxes and minority interest 53 (15)
Balance, September 30 122 94
TOTAL STOCKHOLDERS' EQUITY, SEPTEMBER 30 $5,061 $4,731
</TABLE>
<PAGE> 6
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
(unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 89 $ 514
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for credit losses 21 17
Provision for severance-related costs 50 -
Provision for policyholder benefits 202 156
Deferred income taxes (141) 1
Depreciation and amortization of premises
and equipment 101 93
Other, net (62) (50)
Earnings adjusted for noncash charges and credits 260 731
Net change in:
Trading assets (3,610) (5,264)
Trading liabilities 4,302 12,003
Receivables and payables from securities
transactions 514 (1,798)
Other operating assets and liabilities, net (518) (130)
Securities available for sale gains (29) (51)
Net cash provided by operating activities 919 5,491
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in:
Interest-bearing deposits with banks 1,618 (1,466)
Federal funds sold 2,515 (895)
Securities purchased under resale agreements (6,062) (5,542)
Securities borrowed (1,270) (2,776)
Loans (426) 2,956
Securities available for sale:
Purchases (3,034) (4,358)
Maturities and other redemptions 2,413 2,472
Sales 1,436 1,575
Acquisitions of premises and equipment (94) (223)
Other, net (88) (60)
Net cash used in investing activities (2,992) (8,317)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in:
Deposits (673) (1,127)
Securities sold under repurchase agreements 1,946 1,386
Other short-term borrowings (1,498) 2,454
Issuances of long-term debt 3,210 1,813
Repayments of long-term debt (1,137) (1,387)
Issuances of preferred stock 221 342
Redemption of preferred stock - (205)
Purchases of treasury stock (13) (262)
Cash dividends paid (268) (237)
Other, net 21 20
Net cash provided by financing activities 1,809 2,797
Net effect of exchange rate changes on cash (6) 59
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS (270) 30
Cash and due from banks, beginning of year 1,985 1,750
Cash and due from banks, end of period $ 1,715 $ 1,780
Interest paid $3,618 $2,755
Income taxes paid, net $191 $228
Noncash investing activities $92 $188
Noncash financing activities:
Conversion of debt to preferred stock $245 $ -
Other - 23
Total noncash financing activities $245 $23
</TABLE>
<PAGE> 7
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF NET INTEREST REVENUE
(in millions)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
INTEREST REVENUE
Interest-bearing deposits with banks $ 45 $ 27 $ 154 $ 85
Federal funds sold 12 3 68 9
Securities purchased under resale agreements 255 114 750 318
Securities borrowed 138 56 371 129
Trading assets 778 700 2,108 2,221
Securities available for sale
Taxable 82 76 252 201
Exempt from federal income taxes 13 29 44 72
Loans 233 202 682 638
Total interest revenue 1,556 1,207 4,429 3,673
INTEREST EXPENSE
Deposits
In domestic offices 93 76 284 183
In foreign offices 236 165 714 467
Trading liabilities 275 180 725 613
Securities sold under repurchase agreements 312 226 858 674
Other short-term borrowings 315 225 920 603
Long-term debt 121 71 320 190
Total interest expense 1,352 943 3,821 2,730
NET INTEREST REVENUE $ 204 $ 264 $ 608 $ 943
</TABLE>
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Bankers Trust New York Corporation (the "Parent Company") and
subsidiaries (collectively, the "Corporation", or the "Firm") earned $155
million for the quarter ended September 30, 1995, or $1.72 primary earnings
per share. In the third quarter of 1994, the Corporation earned $169
million, or $1.98 primary earnings per share.
For the first nine months of 1995, the Corporation earned $124
million, or $1.09 primary earnings per share, excluding an after-tax
provision for severance-related costs of $35 million taken in connection
with the Corporation's expense reduction programs. Net income for the
first nine months, including the effect of this provision was $89 million,
or $.66 primary earnings per share. For the nine months ended September
30, 1994, net income was $514 million, or $5.97 primary earnings per share.
BUSINESS FUNCTIONS ANALYSIS
Because the Corporation's business is complex in nature and its
operations are highly integrated, it is impractical to segregate the
respective contributions of the business functions with precision. For
example, the Client Advisory function is difficult to split from the Client
Finance function, since most complex financings include both an element of
advice and the arrangement of credit for the client. Further, transactions
undertaken for purposes of Client Financial Risk Management may contain an
element of Client Finance or Trading and Positioning. Finally, the Trading
and Positioning function serves as an element of support for client-based
activities. As a result, estimates and subjective judgments have been made
to apportion revenue and expenses among the business functions. In
addition, certain revenue and expenses have been excluded from the business
functions because, in the opinion of management, they could not be
reasonably allocated or because their attribution to a particular function
would be distortive.
The following table breaks down earnings on the basis of the
Corporation's five business functions, which represent its core business
activities and are an important tool for analyzing the results of
operations. Detailed definitions of these categories, as well as a
discussion of the methodology used to calculate their results, appear in
the 1994 Annual Report on Form 10-K.
<PAGE> 9
BUSINESS FUNCTIONS (continued)
<TABLE>
<CAPTION>
Business Functions Profitability
(in millions)
Quarter Ended Nine Months Ended
September 30, Increase September 30, Increase
1995 1994 (Decrease) 1995 1994 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
Client Finance $ 20 $ 19 $ 1 $ 82 $ 98 $ (16)
Client Advisory 15 4 11 54 57 (3)
Client Financial Risk
Management 1 67 (66) (170) 231 (401)
Client Transaction Processing 20 20 - 53 78 (25)
Trading and Positioning 104 68 36 121 71 50
Unallocated (5) (9) 4 (51) (21) (30)
Income (Loss) $155 $169 $(14) $ 89 $514 $(425)
</TABLE>
Client Finance - Client Finance income was $20 million in the third
quarter of 1995, up $1 million from last year's third quarter. Revenue
from loan syndication, private placement and securities underwriting
activities was relatively unchanged from the year-ago third quarter.
Credit costs for the current quarter were lower than the 1994 third quarter
as a result of the continued improvement in the Corporation's loan
portfolio. Income for the first nine months of 1995 was $82 million, down
from $98 million recorded in the comparable period in 1994.
Client Advisory - Client Advisory income was $15 million in the
current quarter, an increase of $11 million from the prior year's third
quarter. After normalizing for charges taken in the third quarter of 1994
related to the funds management business, Client Advisory income for the
third quarter of 1995 was relatively flat compared to the year-ago quarter.
Income for the first nine months of 1995 was $54 million, down from $57
million recorded in 1994.
Client Financial Risk Management - Although Client Financial Risk
Management income of $1 million in the current quarter declined $66 million
from last year's third quarter, it increased $50 million from the 1995
second quarter. This improvement in performance versus the second quarter
was the result of the elimination of the losses associated with Latin
American derivatives, as well as a general improvement in the Firm's other
derivatives businesses. Income for the nine months ended September 30,
1995 declined by $401 million from the same period in 1994.
Client Transaction Processing - Client Transaction Processing income
of $20 million was unchanged from the prior year's third quarter as
transaction processing volumes remained relatively steady. Client
Transaction Processing income for the first nine months of 1995 declined
$25 million from the first nine months of 1994.
<PAGE> 10
BUSINESS FUNCTIONS (continued)
Trading and Positioning - Trading and Positioning income of $104
million during the current quarter increased $36 million, or 53 percent,
from the prior year's third quarter. This increase was due in part to net
revenue from equity investment transactions, including a $62 million gain
on the sale of a portion of the Corporation's merchant banking investment
in Northwest Airlines Corporation. The Corporation recorded higher revenue
from both client-related and proprietary trading in foreign exchange
markets as compared to the second quarter of 1995. Trading and Positioning
income for the first nine months of 1995 improved $50 million, or 70
percent, from the comparable 1994 period.
Unallocated - Included in the unallocated category for the first nine
months of 1995 was a $35 million after-tax provision taken in the first
quarter for severance-related costs associated with the expense reduction
programs.
REVENUE
The table below shows net interest revenue, average balances and
average rates. The tax equivalent adjustment is made to present the
revenue and yields on certain assets, primarily tax-exempt securities and
loans, as if such revenue were taxable.
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
NET INTEREST REVENUE (in millions)
Book basis $204 $264 $608 $ 943
Tax equivalent adjustment 11 18 35 60
Fully taxable basis $215 $282 $643 $1,003
AVERAGE BALANCES (in millions)
Interest-earning assets $82,288 $72,493 $80,651 $75,848
Interest-bearing liabilities 77,668 70,402 77,002 73,150
Earning assets financed by
noninterest-bearing funds $ 4,620 $ 2,091 $ 3,649 $ 2,698
AVERAGE RATES (fully taxable basis)
Yield on interest-earning assets 7.56% 6.70% 7.40% 6.58%
Cost of interest-bearing liabilities 6.91 5.31 6.63 4.99
Interest rate spread .65 1.39 .77 1.59
Contribution of noninterest-bearing
funds .39 .15 .30 .18
Net interest margin 1.04% 1.54% 1.07% 1.77%
</TABLE>
Net interest revenue for the third quarter of 1995 totaled $204
million, down $60 million, or 23 percent, from the third quarter of 1994.
The third quarter of 1995 included $20 million of trading-related net
interest revenue, a decline of $92 million from the third quarter of 1994.
<PAGE> 11
REVENUE (continued)
Net interest revenue was $608 million for the first nine months of
1995, down $335 million, or 36 percent, from the first nine months of 1994.
Of this decline, $332 million was from trading-related net interest
revenue.
A significant portion of the Firm's trading and risk management
activities involve positions in interest rate instruments and related
derivatives. The revenue from these activities can periodically shift
between trading and net interest, depending on a variety of factors,
including risk management strategies. Therefore, the Corporation views
trading revenue and trading-related net interest revenue together.
<TABLE>
<CAPTION>
Trading-
Related
Net
Trading Interest
(in millions) Revenue Revenue Total
<S> <C> <C> <C>
Quarter ended September 30, 1995
Interest rate risk $ 89 $27 $116
Foreign exchange risk 68 - 68
Equity and commodity risk 100 (7) 93
Total $257 $20 $277
Quarter ended September 30, 1994
Interest rate risk $107 $118 $225
Foreign exchange risk 85 - 85
Equity and commodity risk 86 (6) 80
Total $278 $112 $390
Nine months ended September 30, 1995
Interest rate risk $ 42 $117 $159
Foreign exchange risk 30 - 30
Equity and commodity risk 186 (39) 147
Total $258 $ 78 $336
Nine months ended September 30, 1994
Interest rate risk $ 336 $425 $ 761
Foreign exchange risk (136) - (136)
Equity and commodity risk 216 (15) 201
Total $ 416 $410 $ 826
</TABLE>
<PAGE> 12
REVENUE (continued)
Third Quarter 1995 vs. Third Quarter 1994
Interest Rate Risk - A number of the Firm's positions in interest rate
instruments declined as compared to the third quarter of 1994. Volumes in
derivative products remained steady, although activity during the third
quarter of 1995 was comprised mainly of low margin transactions. Total
trading and trading-related net interest revenue declined $109 million
compared to the third quarter of 1994, principally as a result of the
decline in positions.
Foreign Exchange Risk - Foreign exchange risk revenue declined $17
million from the third quarter of 1994, as volatility in foreign exchange
markets negatively affected this category. Improved performance in
Asian/Australian foreign exchange markets was offset by weakness in Latin
American trading operations.
Equity and Commodity Risk - Total trading and trading-related net
interest revenue increased $13 million compared to the third quarter of
1994. Improved performance in selected derivative product businesses
spurred an increase in equity risk trading revenue. This was offset by a
decline in securities trading revenue in commodity-related derivative
products.
Nine Months 1995 vs. Nine Months 1994
Interest Rate Risk - Interest rate risk revenue was adversely affected
by a decline in a number of fixed income securities positions that occurred
in 1995, coupled with the liquidity problems that affected the Firm's
derivative products in the emerging markets of Latin America. Total
trading and trading-related net interest revenue declined $602 million
compared to the nine months ended September 30, 1994.
Foreign Exchange Risk - Foreign exchange risk revenue increased to $30
million from a $136 million loss for the nine months ended September 30,
1994. The improvement was principally due to a rebound in the Firm's
proprietary trading businesses and improved performance in Latin American
markets.
Equity Risk and Commodity Risk - Trading revenue and trading-related
net interest revenue declined by $54 million compared to the first nine
months of 1994. The decline was largely due to the downturn in the
commodity derivatives business.
<PAGE> 13
REVENUE (continued)
Shown below is a comparison of the components of noninterest revenue
(in millions).
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, Increase September 30, Increase
1995 1994 (Decrease) 1995 1994 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
Trading $257 $278 $(21) $ 258 $ 416 $(158)
Fiduciary and funds
management 174 188 (14) 511 563 (52)
Fees and commissions
Corporate finance fees 74 76 (2) 273 299 (26)
Service charges on
deposit accounts 18 21 (3) 54 65 (11)
Acceptances and letters
of credit commissions 11 12 (1) 32 33 (1)
Other 49 54 (5) 149 143 6
Total fees and commissions 152 163 (11) 508 540 (32)
Securities available for
sale gains 10 28 (18) 29 51 (22)
Other noninterest revenue
Insurance premiums 64 43 21 176 139 37
Net revenue from equity
investment transactions,
including write-offs 85 4 81 124 59 65
Other 13 3 10 78 81 (3)
Total other noninterest
revenue 162 50 112 378 279 99
Total noninterest revenue $755 $707 $ 48 $1,684 $1,849 $(165)
</TABLE>
Third Quarter 1995 vs. Third Quarter 1994
Fiduciary and funds management revenue totaled $174 million for the
third quarter, down $14 million, or 7 percent, from the same period last
year. The decrease in revenue was due primarily to a decline in
transaction volumes in global fiduciary services.
Fees and commissions of $152 million decreased by $11 million, or 7
percent, from the third quarter of 1994. Corporate finance fees of $74
million decreased by $2 million, or 3 percent, from the same period last
year. Lower revenue from commercial banking and securities underwriting
fees were partially offset by higher revenue from financial advisory and
loan syndication activities.
The Corporation's securities available for sale gains were $10
million, compared with $28 million in the prior year's third quarter.
<PAGE> 14
REVENUE (continued)
Other noninterest revenue totaled $162 million, up $112 million from
the prior year's quarter. The largest component of this increase was an
$81 million rise in net revenue from equity investment transactions,
including a $62 million gain on the sale of a portion of the Corporation's
merchant banking investment in Northwest Airlines Corporation. Also
contributing to the increase in other noninterest revenue was higher
insurance premium revenue from operations in Chile. The 1994 third quarter
had included charges related to the funds management business.
Nine Months 1995 vs. Nine Months 1994
Fiduciary and funds management revenue of $511 million decreased $52
million, or 9 percent, from the first nine months of 1994. The decrease in
revenue was due primarily to a decline in the volume of transactions in
global fiduciary services.
Fees and commissions decreased $32 million, or 6 percent, from the
first nine months of 1994. The $26 million, or 9 percent, decrease in
corporate finance fees was due to lower revenue from securities
underwriting and public finance fees offset in part by higher revenue from
private placement fees.
Other noninterest revenue totaled $378 million, up $99 million, or 35
percent, from the first nine months of 1994. The increase was due to the
above-mentioned rise in net revenue from equity investment transactions as
well as higher insurance premium revenue from operations in Chile. Also
contributing to the results were charges taken in 1994 related to the funds
management business. This was offset in part by the impact of the 1994
insurance settlement related to the fire at the Corporation's headquarters
at 280 Park Avenue.
PROVISION AND ALLOWANCE FOR CREDIT LOSSES
The provision for credit losses is dependent upon management's
evaluation as to the amount needed to maintain the allowance for credit
losses at a level considered appropriate in relation to the risk of losses
inherent in the portfolio.
The provision for credit losses was $7 million for the third quarter of
1995, compared with $17 million in the prior year's third quarter. Net
charge-offs for the quarter were $218 million, compared with $28 million a
year ago. The current quarter's net charge-offs included leveraged
derivative contract charge-offs of $205 million against the allowance for
credit losses. During the fourth quarter of 1994, $423 million of
leveraged derivative contracts that had been reclassified as receivables in
the loan portfolio were placed on a cash basis. Of this amount, $72
million was then charged-off leaving a balance of $351 million. Since then
some of these receivables have been satisfactorily settled, but in line
<PAGE> 15
PROVISION AND ALLOWANCE FOR CREDIT LOSSES (continued)
with the Corporation's credit policies, a $205 million portion of the
remaining balance has been charged-off. For the third quarter of 1994,
nonrefinancing country net charge-offs were $33 million and included net
charge-offs of $32 million of real estate loans.
The provision for credit losses and the other changes in the allowance
for credit losses are shown below (in millions).
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
Allowance for credit losses 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Balance, beginning of period $1,243 $1,340 $1,252 $1,324
Net charge-offs
Charge-offs 223 37 270 75
Recoveries 5 9 29 63
Total net charge-offs* 218 28 241 12
Provision for credit losses 7 17 21 17
Balance, end of period $1,032 $1,329 $1,032 $1,329
*Components:
Secured by real estate $ 9 $12 $ 12 $ 24
Real estate related - 20 2 22
Highly leveraged 6 1 28 (8)
Other 203 - 207 9
Refinancing country - (5) (8) (35)
Total $218 $28 $241 $ 12
</TABLE>
The allowance for credit losses, at $1.032 billion at September 30,
1995, was down $211 million from its level at June 30, 1995, and down $220
million from December 31, 1994. The allowance was equal to 137 percent,
134 percent and 126 percent of total cash basis loans at September 30,
1995, June 30, 1995 and December 31, 1994, respectively. The Corporation
believes that its allowance must be viewed in its entirety and therefore is
available for potential credit losses in its entire portfolio, including
loans, credit-related commitments, derivatives and other financial
instruments.
In the opinion of management, the allowance, when taken as a whole, is
adequate to absorb reasonably estimated credit losses inherent in the
Corporation's entire portfolio.
On January 1, 1995, the Corporation adopted SFAS 114, "Accounting by
Creditors for Impairment of a Loan" as amended by SFAS 118, "Accounting by
Creditors for Impairment of a Loan - Income Recognition and Disclosure."
<PAGE> 16
PROVISION AND ALLOWANCE FOR CREDIT LOSSES (continued)
SFAS 114 requires the creation of a valuation allowance for impaired loans.
Under SFAS 114, a loan is impaired when, based on current information and
events, it is probable that a creditor will be unable to collect all
amounts due according to the loan's contractual terms.
At September 30, 1995, the recorded investment in loans that was
considered to be impaired under SFAS 114 was $853 million which consisted
of total cash basis loans and renegotiated loans. Included in this amount
was $444 million of loans for which the related valuation allowance was $88
million.
EXPENSES
Third Quarter 1995 vs. Third Quarter 1994
Total noninterest expenses of $728 million increased by $15 million,
or 2 percent, from the third quarter of 1994. Incentive compensation and
employee benefits expense decreased $10 million, or 5 percent. Salaries
expense decreased $4 million, or 2 percent, from the third quarter of 1994,
mostly due to a 2 percent decrease in the average number of employees.
All other expenses totaled $345 million for the quarter, up $29
million, or 9 percent, from last year's third quarter. The provision for
policyholder benefits and professional fees accounted for this increase.
Nine Months 1995 vs. Nine Months 1994
Total noninterest expenses of $2.140 billion for the first nine months
of 1995 increased by $98 million, or 5 percent, from the first nine months
of 1994. Excluding the provision for severance-related costs of $50
million, noninterest expenses were $2.090 billion, an increase of $48
million, or 2 percent, from the first nine months of 1994. Incentive
compensation and employee benefits expense decreased $106 million, or 19
percent, due to lower bonus expense reflecting reduced earnings. Salaries
expense increased $32 million, or 6 percent, from the first nine months of
1994. The number of full time staff at September 30, 1995 was 13,808, a
net decrease of 721 from December 31, 1994. Management has implemented
expense reduction programs designed to reduce overall operating expenses --
principally noninterest expenses before bonus, policyholder benefits and
minority interest. The Corporation previously announced that it would be
reducing these expenses, as compared to the annualized fourth quarter 1994
amounts, by approximately $200 million in 1995 and approximately $275
million in 1996. Operating expense trends in the first nine months of 1995
indicate that the Corporation is on target to achieve these cost
reductions.
All other expenses, excluding the provision for severance-related
costs, totaled $1.037 billion for the first nine months of 1995, up $122
million, or 13 percent, from the first nine months of 1994. Increases in
the provision for policyholder benefits, professional fees and minority
interest accounted for almost three-fourths of this increase.
<PAGE> 17
INCOME TAXES
Income tax expense for the third quarter of 1995 amounted to $69
million, compared with $72 million for the third quarter of 1994. For the
first nine months of 1995, income tax expense was $42 million, compared
with $219 million for the first nine months of 1994. The effective tax
rates for the quarter and nine months ended September 30, 1995, were 31
percent and 32 percent, respectively, compared with 30 percent for the
quarter and nine months ended September 30, 1994.
<PAGE> 18
EARNINGS PER COMMON SHARE
Primary and fully diluted earnings per common share amounts were
computed by subtracting from earnings the dividend requirements on
preferred stock to arrive at earnings applicable to common stock and
dividing this amount by the average number of common and common equivalent
shares outstanding during the period.
For both primary and fully diluted earnings per share, the average
number of common and common equivalent shares outstanding was the sum of
the average number of shares of common stock outstanding and the
incremental number of shares issuable under outstanding stock options and
deferred stock awards that had a dilutive effect as computed under the
treasury stock method. Under this method, the number of incremental shares
is determined by assuming the issuance of the outstanding stock options and
deferred stock awards reduced by the number of shares assumed to be
repurchased from the issuance proceeds, using the market price of the
Parent Company's common stock. For primary earnings per share, this market
price is the average market price for the period, while for fully diluted
earnings per share, it is the period-end market price if it is higher than
the average market price. At no time during the three and nine month
periods ended September 30, 1995 and 1994 did the Corporation have
outstanding any securities which were convertible to the Parent Company's
common stock.
The earnings applicable to common stock and the number of shares used
for primary and fully diluted earnings per share were as follows (in
millions):
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net income applicable to common stock $139 $161 $53 $492
Average number of common shares
outstanding 78.423 78.564 78.362 79.430
Primary earnings per share
Average number of common and common
equivalent shares outstanding 81.039 81.377 80.788 82.397
Fully diluted earnings per share
Average number of common and common
equivalent shares outstanding -
assuming full dilution 81.403 81.427 80.987 82.429
</TABLE>
<PAGE> 19
BALANCE SHEET ANALYSIS
The following table highlights the changes in the balance sheet.
Since quarter-end balances can be distorted by one-day fluctuations, an
analysis of changes in the quarterly averages is provided to give a better
indication of balance sheet trends.
<TABLE>
<CAPTION>
CONDENSED AVERAGE BALANCE SHEETS
(in millions)
3rd Qtr 2nd Qtr 4th Qtr
1995 1995 1994
<S> <C> <C> <C>
ASSETS
Interest-bearing deposits with banks $ 2,566 $ 2,276 $ 2,139
Federal funds sold 800 1,331 1,497
Securities purchased under resale
agreements 18,502 23,020 14,380
Securities borrowed 9,726 8,533 6,494
Trading assets 32,621 29,477 33,106
Securities available for sale
Taxable 4,791 4,231 5,240
Exempt from federal income taxes 1,568 1,749 2,238
Total securities available for sale 6,359 5,980 7,478
Loans 11,714 10,776 12,548
Total interest-earning assets 82,288 81,393 77,642
Cash and due from banks 1,848 1,615 1,835
Noninterest-earning trading assets 19,722 20,884 19,778
All other assets 6,750 7,137 8,081
Allowance for credit losses (1,248) (1,256) (1,327)
Total $109,360 $109,773 $106,009
LIABILITIES
Interest-bearing deposits
In domestic offices $ 5,535 $ 5,802 $ 5,584
In foreign offices 15,014 16,042 15,611
Total interest-bearing deposits 20,549 21,844 21,195
Trading liabilities 10,817 10,000 8,856
Securities sold under repurchase agreements 20,477 23,967 20,833
Other short-term borrowings 17,481 14,750 18,327
Long-term debt 8,344 7,113 6,310
Total interest-bearing liabilities 77,668 77,674 75,521
Noninterest-bearing deposits 3,643 3,169 3,728
Noninterest-bearing trading liabilities 16,576 17,821 15,539
All other liabilities 6,277 6,124 6,212
Total liabilities 104,164 104,788 101,000
PREFERRED STOCK OF SUBSIDIARY 250 250 250
STOCKHOLDERS' EQUITY
Preferred stock 864 691 395
Common stockholders' equity 4,082 4,044 4,364
Total stockholders' equity 4,946 4,735 4,759
Total $109,360 $109,773 $106,009
<FN>
The condensed average balance sheets are presented on a different basis
than the spot balance sheets, in that the various categories of interest-
earning assets and interest-bearing liabilities exclude certain noninterest-
earning/bearing components included in the spot balance sheet captions.
These components, excluding noninterest-earning/bearing trading
assets/liabilities, are included in "all other assets" and "all other
liabilities" in the condensed average balance sheets.
</TABLE>
<PAGE> 20
BALANCE SHEET ANALYSIS (continued)
Third Quarter 1995 vs. Second Quarter 1995
The Corporation's average total assets amounted to $109.4 billion for
the third quarter of 1995, a decrease of $413 million from the second
quarter of 1995. Average interest-earning assets increased $895 million,
or 1 percent, and the proportion of interest-earning assets to total assets
increased slightly, from 74 percent to 75 percent. The increase in
interest-earning assets was primarily due to increases in trading assets
(up $3.1 billion, or 11 percent), securities borrowed (up $1.2 billion, or
14 percent) and loans (up $938 million, or 9 percent) offset in part by a
decrease in securities purchased under resale agreements (down $4.5
billion, or 20 percent). Interest-earning trading assets as a percentage
of average total assets increased from 27 percent to 30 percent.
Noninterest-earning trading assets decreased $1.2 billion, or 6 percent,
from the second quarter of 1995.
Average total liabilities decreased $624 million, or 1 percent, from
the second quarter of 1995. Within interest-bearing liabilities a decrease
in securities sold under repurchase agreements (down $3.5 billion, or 15
percent) was offset in part by an increase in other short-term borrowings
(up $2.7 billion or 19 percent). Total short-term borrowings (securities
sold under repurchase agreements and other short-term borrowings) as a
percentage of total interest-bearing liabilities decreased slightly from 50
percent to 49 percent in the third quarter of 1995. Noninterest-bearing
trading liabilities decreased $1.2 billion, or 7 percent, from the second
quarter of 1995.
Third Quarter 1995 vs. Fourth Quarter 1994
The Corporation's average total assets for the third quarter of 1995,
increased $3.4 billion, or 3 percent, from the fourth quarter of 1994.
Average interest-earning assets increased $4.6 billion, or 6 percent, and
the proportion of interest-earning assets to total assets increased, from
73 percent to 75 percent. The increase in interest-earning assets was
primarily due to increases in securities purchased under resale agreements
(up $4.1 billion, or 29 percent) and securities borrowed (up $3.2 billion,
or 50 percent) offset in part by a decrease in securities available for
sale (down $1.1 billion, or 15 percent) and loans (down $834 million, or 7
percent). As a percentage of average total assets, interest-earning
trading assets decreased from 31 percent to 30 percent in the third quarter
of 1995, and loans decreased from 12 percent to 11 percent.
Average total liabilities increased $3.2 billion, or 3 percent, from
the fourth quarter of 1994. Interest-bearing liabilities increased $2.1
billion, or 3 percent, from last year's fourth quarter. This increase was
primarily attributable to increases in long-term debt (up $2.0 billion, or
32 percent) and trading liabilities (up $2.0 billion, or 22 percent) offset
in part by a decrease in other short-term borrowings (down $846 million, or
5 percent) and interest-bearing deposits (down $646 million, or 3 percent).
Total short-term borrowings (securities sold under repurchase agreements
and other short-term borrowings) as a percentage of total
<PAGE> 21
BALANCE SHEET ANALYSIS (continued)
interest-bearing liabilities decreased to 49 percent, from 52 percent in
the fourth quarter of 1994. Noninterest-bearing trading liabilities
increased $1.0 billion from the fourth quarter of 1994.
Trading Assets and Trading Liabilities
The components of these accounts, which are carried at fair value,
were as follows (in millions):
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
TRADING ASSETS
U.S. government and agency securities $10,656 $10,974
Obligations of U.S. states and
political subdivisions 468 179
Foreign government securities 9,574 8,359
Corporate debt securities 5,267 5,571
Equity securities 4,892 3,850
Bankers acceptances and certificates
of deposit 3,254 1,316
Swaps, options and other
derivative contracts (1) 11,885 14,071
Other 4,368 3,194
Total trading assets $50,364 $47,514
TRADING LIABILITIES
Securities sold, not yet purchased
U.S. government and agency securities $ 5,966 $4,159
Foreign government securities 3,424 2,751
Equity securities 3,105 2,298
Other 376 174
Swaps, options and other
derivative contracts (1) 11,801 11,567
Total trading liabilities $24,672 $20,949
<FN>
(1)Comprised of fair values of interest rate instruments, foreign exchange
rate instruments, and equity and commodity instruments, reduced by the
effects of master netting agreements, in accordance with FASB
Interpretation No. 39.
</TABLE>
<PAGE> 22
BALANCE SHEET ANALYSIS (continued)
Securities Available for Sale
The fair value, amortized cost and gross unrealized holding gains and
losses for the Corporation's securities available for sale follow (in
millions):
<TABLE>
<CAPTION>
September 30, June 30, December 31,
1995 1995 1994
<S> <C> <C> <C>
Fair value $7,140 $6,479 $7,475
Amortized cost 6,897 6,396 7,306
Excess of fair value over
amortized cost (1) $ 243 $ 83 $ 169
(1) Components:
Unrealized gains $323 $168 $ 270
Unrealized losses (80) (85) (101)
$243 $ 83 $ 169
<FN>
Included in the September 30, 1995 amounts was a portion of the
Corporation's merchant banking investment in Northwest Airlines Corporation
that was transferred from other assets to securities available for sale
during the quarter.
</TABLE>
Long-term Debt
During the third quarter of 1995, the Corporation obtained $1.014
billion of cash proceeds from the issuances of long-term debt and repaid
$137 million of long-term debt. The larger of these debt issuances were as
follows (in millions):
<TABLE>
<CAPTION>
Face Amount
<S> <C>
Bankers Trust Company
Redeemable Preference Securities due
June 2000 to December 2003 (1) $554
Bank Notes due May 2006 $112
BT Securities Corporation
Floating Rate Notes due 1998 $200
<FN>
(1) At September 30, 1995, certain subsidiaries of Bankers Trust Company had
outstanding $2.0 billion of mandatorily redeemable preference securities
with maturities ranging from September 1996 to December 2003.
</TABLE>
<PAGE> 23
TRADING DERIVATIVES
The Corporation actively manages trading positions in a variety of
derivative contracts. Most of the Corporation's trading positions are
established as a result of providing derivative products to meet customers'
demands. To anticipate customer demand for such transactions, the
Corporation also carries an inventory of capital market instruments and
maintains its access to market liquidity by quoting bid and offer prices
to, and trading with, other market makers. These two activities are
essential to provide customers with capital market products at competitive
prices. All positions are reported at fair value and changes in fair
values are reflected in trading revenue as they occur.
The following tables reflect the gross fair values and balance sheet
amounts of trading derivatives:
<TABLE>
<CAPTION>
At September 30, Average During
1995 3rd Qtr.1995
(Liabi- (Liabi-
(in millions) Assets lities) Assets lities)
<S> <C> <C> <C> <C>
OTC Financial Instruments
Interest Rate and Currency
Swap Contracts $16,330 $(14,692) $16,590 $(16,652)
Interest Rate Contracts
Forwards 172 (106) 134 (126)
Options purchased 1,130 1,176
Options written (2,301) (1,670)
Foreign Exchange Rate Contracts
Spot and Forwards 9,488 (10,152) 11,100 (10,279)
Options purchased 1,282 1,426
Options written (1,177) (1,083)
Equity-related contracts 1,751 (1,784) 1,766 (1,787)
Commodity-related and other contracts 587 (480) 614 (429)
Exchange-Traded Options
Interest Rate 29 (41) 100 (56)
Equity 151 (103) 149 (82)
Commodity - - - (2)
Total Gross Fair Values 30,920 (30,836) 33,055 (32,166)
Impact of Netting Agreements (19,035) 19,035 (18,844) 18,844
$11,885(1) $14,211
$(11,801)(1) $(13,322)
<FN>
(1) As reflected on the balance sheet in "Trading Assets" and "Trading
Liabilities."
</TABLE>
<PAGE> 24
TRADING DERIVATIVES (continued)
<TABLE>
<CAPTION>
At December 31, Average During
1994 4th Qtr.1994
(Liabi- (Liabi-
(in millions) Assets lities) Assets lities)
<S> <C> <C> <C> <C>
OTC Financial Instruments
Interest Rate and Currency
Swap Contracts $ 15,055 $(11,388) $ 15,087 $(12,042)
Interest Rate Contracts
Forwards 91 (127) 77 (96)
Options purchased 1,211 1,363
Options written (2,330) (2,109)
Foreign Exchange Rate Contracts
Spot and Forwards 8,127 (7,988) 12,133 (12,150)
Options purchased 1,504 1,378
Options written (1,522) (1,280)
Equity-related contracts 1,005 (1,316) 1,660 (1,778)
Commodity-related and other contracts 578 (451) 479 (411)
Exchange-Traded Options
Interest Rate 191 (113) 105 (80)
Foreign Exchange - (62) 19 (54)
Equity 82 (43) 90 (63)
Total Gross Fair Values 27,844 (25,340) 32,391 (30,063)
Impact of Netting Agreements (13,773) 13,773 (17,843) 17,843
$ 14,071 (1) $ 14,548
$(11,567) (1) $(12,220)
<FN>
(1) As reflected on the balance sheet in "Trading Assets" and "Trading
Liabilities."
</TABLE>
END-USER DERIVATIVES
The Corporation, as an end user, utilizes various types of derivative
products (principally interest rate swaps) to manage the interest rate,
currency and other market risks associated with certain liabilities and
assets such as interest-bearing deposits, short-term borrowings and long-
term debt as well as investments in non-marketable equity instruments and
net investments in foreign entities. Revenue or expense pertaining to
management of interest rate exposure is predominantly recognized over the
life of the contract as an adjustment to interest revenue or expense.
At September 30, 1995, total net end-user derivative unrealized gains
were $1 million, compared to $330 million of total net end-user derivative
unrealized losses at December 31, 1994. The $331 million improvement
during the first nine months of 1995 was due to decreases in interest
rates.
<PAGE> 25
END-USER DERIVATIVES (continued)
The following tables provide the gross unrealized gains and losses for
end-user derivatives. Gross unrealized gains and losses for hedges of
securities available for sale are recognized in the financial statements
with the offset as an adjustment to securities valuation allowance in
stockholders' equity. Gross unrealized gains and losses for hedges of
other assets, interest-bearing deposits, other short-term borrowings, long-
term debt and net investments in foreign subsidiaries are not yet
recognized in the financial statements.
<TABLE>
<CAPTION>
Other Net invest-
short- ments in
Securities Interest- term Long- foreign
(in millions) available Other bearing borrow- term subsi-
September 30, for sale assets deposits ings debt diaries Total
1995
<S> <C> <C> <C> <C> <C> <C> <C>
Interest Rate Swaps
Pay Variable
Unrealized Gain $ - $- $ 82 $ 5 $ 224 $- $ 311
Unrealized (Loss) - - (26) (4) (49) - (79)
Pay Variable Net - - 56 1 175 - 232
Pay Fixed
Unrealized Gain 1 - 22 - 30 - 53
Unrealized (Loss) (56) - (68) (1) (75) - (200)
Pay Fixed Net (55) - (46) (1) (45) - (147)
Total Unrealized
Gain 1 - 104 5 254 - 364
Total Unrealized
(Loss) (56) - (94) (5) (124) - (279)
Total Net $(55) $- $ 10 $ - $ 130 $- $ 85
Forward Rate Agreements
Unrealized Gain $- $- $ 3 $- $- $- $ 3
Unrealized (Loss) - - (3) - - - (3)
Net $- $- $ - $- $- $- $ -
Currency Swaps and Forwards
Unrealized Gain $ - $- $ 20 $ - $ 24 $ - $ 44
Unrealized (Loss) (1) - (15) (1) (44) (38) (99)
Net $(1) $- $ 5 $(1) $(20) $(38) $(55)
Other Contracts (1)
Unrealized Gain $ - $ - $- $- $- $- $ -
Unrealized (Loss) (5) (24) - - - - (29)
Net $(5) $(24) $- $- $- $- $(29)
Total Unrealized
Gain $ 1 $ - $ 127 $ 5 $ 278 $ - $ 411
Total Unrealized
(Loss) (62) (24) (112) (6) (168) (38) (410)
Total Net $(61) $(24) $ 15 $(1) $ 110 $(38) $ 1
<FN>
(1) Other contracts are principally equity swaps and collars.
</TABLE>
<PAGE> 26
END-USER DERIVATIVES (continued)
<TABLE>
<CAPTION>
Other Net invest-
short- ments in
Securities Interest- term Long- foreign
(in millions) available Other bearing borrow- term subsi-
December 31, for sale assets deposits ings debt diaries Total
1994
<S> <C> <C> <C> <C> <C> <C> <C>
Interest Rate Swaps
Pay Variable
Unrealized Gain $ - $- $ 17 $ 4 $ 62 $- $ 83
Unrealized (Loss) (1) - (191) (4) (200) - (396)
Pay Variable Net (1) - (174) - (138) - (313)
Pay Fixed
Unrealized Gain 48 - 105 - 28 - 181
Unrealized (Loss) (19) - (31) - (15) - (65)
Pay Fixed Net 29 - 74 - 13 - 116
Total Unrealized
Gain 48 - 122 4 90 - 264
Total Unrealized
(Loss) (20) - (222) (4) (215) - (461)
Total Net $ 28 $- $(100) $ - $(125) $- $(197)
Forward Rate Agreements
Unrealized Gain $- $- $ 4 $- $- $- $ 4
Unrealized (Loss) - - (5) - - - (5)
Net $- $- $(1) $- $- $- $(1)
Currency Swaps
Unrealized Gain $- $- $ 9 $ - $ 4 $ - $ 13
Unrealized (Loss) - - (2) (1) (74) (22) (99)
Net $- $- $ 7 $(1) $(70) $(22) $(86)
Other Contracts (1)
Unrealized Gain $5 $ 2 $- $- $- $- $ 7
Unrealized (Loss) - (53) - - - - (53)
Net $5 $(51) $- $- $- $- $(46)
Total Unrealized
Gain $ 53 $ 2 $ 135 $ 4 $ 94 $ - $ 288
Total Unrealized
(Loss) (20) (53) (229) (5) (289) (22) (618)
Total Net $ 33 $(51) $ (94) $(1) $(195) $(22) $(330)
<FN>
(1) Other contracts are principally equity swaps and collars.
</TABLE>
<PAGE> 27
END-USER DERIVATIVES (continued)
For pay variable and pay fixed interest rate swaps entered into as an
end user, the weighted average receive rate and weighted average pay rate
(interest rates were based on the weighted averages of both U.S. and non-
U.S. currencies) by maturity and corresponding notional amounts were as
follows ($ in millions):
<TABLE>
<CAPTION>
At September 30, 1995
Notional
Amount Paying Variable Paying Fixed
Maturing Notional Receive Pay Notional Receive Pay Total
In: Amount Rate Rate Amount Rate Rate Notional
<S> <C> <C> <C> <C> <C> <C> <C>
1995 $ 6,594 5.86% 5.91% $ 1,314 5.98% 5.74% $ 7,908
1996-1997 19,442 6.05 5.92 9,791 5.96 6.21 29,233
1998-1999 2,527 6.04 5.86 981 4.30 5.11 3,508
2000 and
thereafter 5,677 7.00 6.03 1,875 4.94 6.59 7,552
Total $34,240 $13,961 $48,201
<FN>
All rates were those in effect at September 30, 1995. Variable rates are
primarily based on LIBOR and may change significantly, affecting future
cash flows.
</TABLE>
<TABLE>
<CAPTION>
At December 31, 1994
Notional
Amount Paying Variable Paying Fixed
Maturing Notional Receive Pay Notional Receive Pay Total
In: Amount Rate Rate Amount Rate Rate Notional
<S> <C> <C> <C> <C> <C> <C> <C>
1995 $11,211 5.88% 6.09% $2,908 5.90% 6.00% $14,119
1996-1997 7,830 6.03 5.77 3,219 5.92 5.78 11,049
1998-1999 2,444 5.81 5.83 993 5.34 5.38 3,437
2000 and
thereafter 4,113 6.79 5.72 1,730 5.83 8.13 5,843
Total $25,598 $8,850 $34,448
<FN>
All rates were those in effect at December 31, 1994. Variable rates are
primarily based on LIBOR and may change significantly, affecting future
cash flows.
The December 31, 1994 table corrects a typographical error which transposed
the rates shown under the respective headings "Receive Rate" and "Pay Rate"
that appeared on page 73 of the 1994 10-K.
</TABLE>
<PAGE> 28
REGULATORY CAPITAL
The Federal Reserve Board's capital adequacy guidelines mandate that
minimum ratios ("FRB Minimum Regulatory Guidelines") be maintained by bank
holding companies and banks. The Corporation's 1994 Annual Report on Form
10-K, on page 31, provides a detailed discussion of both these regulatory
capital guidelines and the federal bank regulations regarding capital tiers
under the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") for the Corporation's bank subsidiaries.
Based on their respective regulatory capital ratios at September 30,
1995, both Bankers Trust Company ("BTCo.") and Bankers Trust (Delaware) are
well capitalized, based on the definitions in the regulations issued by the
Federal Reserve Board and the other federal bank regulatory agencies
setting forth the general capital requirements mandated by FDICIA.
All three regulatory capital ratios, at both September 30, 1995 and
December 31, 1994, excluded any benefit from the adoption of SFAS 115.
The table below indicates the regulatory capital ratios of the
Corporation and BTCo. and the minimum regulatory guidelines.
<TABLE>
<CAPTION>
FRB
Minimum
September 30, December 31, Regulatory
1995 1994 Guidelines
<S> <C> <C> <C>
CORPORATION
Risk-Based Ratios
Tier 1 Capital 8.09% 9.05% 4.0%
Total Capital 12.96% 14.77% 8.0%
Leverage Ratio 5.53% 5.26% 3.0%
BTCo.
Risk-Based Ratios
Tier 1 Capital 8.75% 9.92% 4.0%
Total Capital 11.09% 12.90% 8.0%
Leverage Ratio 5.50% 5.91% 3.0%
</TABLE>
The following were the essential components of the Corporation's risk-
based capital ratios (in millions):
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
Tier 1 Capital $4,490 $4,372
Tier 2 Capital 2,705 2,760
Total Capital $7,195 $7,132
Total risk-weighted assets $55,517 $48,285
</TABLE>
<PAGE> 29
REGULATORY CAPITAL (continued)
During the first nine months of 1995, the Corporation's Tier 1 Capital
and Total Capital ratios declined by 96 basis points and 181 basis points,
respectively, as a result of the increase in total risk-weighted assets.
The Leverage Ratio increased by 27 basis points during the first nine
months of 1995 primarily as a result of the decrease in average total
assets. The $118 million increase in Tier 1 Capital was primarily
attributable to the issuances of preferred stock offset by the decrease in
retained earnings due to the cash dividends declared. The Corporation's
total risk-weighted assets at September 30, 1995 were $7.232 billion higher
than at year-end 1994.
LIQUIDITY
Liquidity management at the Corporation focuses on both asset
liquidity and liability management. Enhancing asset liquidity remains a
particularly important element of the Corporation's liquidity management
philosophy. At the same time, management is continually seeking
opportunities to further diversify the Corporation's funding sources.
Liquid assets consist of cash and due from banks, interest-bearing
deposits with banks, federal funds sold, securities purchased under resale
agreements, securities borrowed, trading assets and securities available
for sale. At September 30, 1995, the Corporation's liquid assets amounted
to $84.4 billion, or 80 percent of gross total assets, compared with 82
percent and 80 percent, respectively, at June 30, 1995 and December 31,
1994.
Cash Flows
The following comments apply to the consolidated statement of cash
flows, which appears on page 6.
Cash and due from banks decreased $270 million during the first nine
months of 1995, as net cash used in investing activities exceeded the sum
of net cash provided by financing and operating activities. Within the
investing activities category, cash outflows from net changes in securities
purchased under resale agreements ($6.1 billion) and purchases of
securities available for sale ($3.0 billion) were offset in part by cash
inflows from sales, maturities and other redemptions of securities
available for sale ($3.8 billion) as well as net changes in federal funds
sold ($2.5 billion). The $1.8 billion of net cash provided by financing
activities was largely the result of cash inflows from the issuances of
long-term debt ($3.2 billion) and net changes in securities sold under
repurchase agreements ($1.9 billion) offset in part by cash outflows from
the net changes in other short-term borrowings ($1.5 billion) and
repayments of long-term debt ($1.1 billion). The $919 million of net cash
provided by operating activities primarily resulted from a $692 million net
change in trading assets and liabilities.
<PAGE> 30
LIQUIDITY (continued)
For the nine months ended September 30, 1994, cash and due from banks
increased $30 million, as the net cash used in investing activities
exceeded the sum of net cash provided by operating and financing
activities. The $8.3 billion of net cash used in investing activities was
largely the result of cash outflows from net changes in securities
purchased under resale agreements ($5.5 billion), as well as from purchases
of securities available for sale ($4.4 billion) and net changes in
securities borrowed ($2.8 billion). These factors were partially offset by
cash inflows from sales, maturities and other redemptions of securities
available for sale ($4.0 billion). The $5.5 billion of net cash provided
by operating activities primarily resulted from a $6.7 billion net change
in trading assets and liabilities. Within the financing activities
category, cash inflows from the net changes in other short-term borrowings
($2.5 billion), as well as from issuances of long-term debt ($1.8 billion)
and net changes in securities sold under repurchase agreements ($1.4
billion) were offset in part by cash outflows from repayments of long-term
debt ($1.4 billion) and the net change in deposits ($1.1 billion).
Interest Rate Sensitivity
Condensed interest rate sensitivity data for the Corporation at
September 30, 1995 is presented in the table below. For purposes of this
presentation, the interest-earning/bearing components of trading assets and
trading liabilities are assumed to reprice within three months.
The interest rate gaps reported in the table arise when assets are
funded with liabilities having different repricing intervals, after
considering the effect of off-balance sheet hedging instruments. Since
these gaps are actively managed and change daily as adjustments are made in
interest rate views and market outlook, positions at the end of any period
may not be reflective of the Corporation's interest rate view in subsequent
periods. Active management dictates that longer-term economic views are
balanced against prospects of short-term interest rate changes in all
repricing intervals.
<TABLE>
<CAPTION>
By Repricing Interval Non-
interest-
Within 1 - 5 After bearing
(in billions) September 30, 1 year years 5 years funds Total
1995
<S> <C> <C> <C> <C> <C>
Assets $ 72.0 $ 3.1 $ 3.0 $ 25.8 $103.9
Liabilities, preferred stock
of subsidiary and preferred
stock (65.0) (7.1) (2.2) (25.4) (99.7)
Common stockholders' equity - - - (4.2) (4.2)
Effect of off-balance sheet
hedging instruments (7.8) 5.6 2.2 - -
Interest rate sensitivity gap $ (.8) $ 1.6 $ 3.0 $ (3.8) $ -
</TABLE>
<PAGE> 31
NONPERFORMING ASSETS
The components of cash basis loans, renegotiated loans, other real
estate and other nonperforming assets are shown below ($ in millions).
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
CASH BASIS LOANS (NONREFINANCING COUNTRY)
Domestic
Commercial and industrial $237 $316
Secured by real estate 326 277
Financial institutions 10 25
Total domestic 573 618
International
Commercial and industrial 107 247
Secured by real estate 68 79
Financial institutions 2 48
Other 2 2
Total international 179 376
Total cash basis loans (nonrefinancing country) 752 994
CASH BASIS LOANS (REFINANCING COUNTRY)
International - 2
Total cash basis loans $752 $996
Ratio of cash basis loans to total loans 5.9% 8.0%
Ratio of allowance for credit losses to cash
basis loans 137% 126%
RENEGOTIATED LOANS
Secured by real estate $ 89 $65
Other nonrefinancing country 12 1
Total renegotiated loans $101 $66
OTHER REAL ESTATE $281 $301
OTHER NONPERFORMING ASSETS
Assets acquired in credit workouts $62 $61
Nonperforming derivative contracts 2 2
Total other nonperforming assets $64 $63
Loans 90 days or more past due and still
accruing interest $- $-
</TABLE>
<PAGE> 32
NONPERFORMING ASSETS (continued)
An analysis of the changes in the Corporation's total cash basis loans
during the first nine months of 1995 follows (in millions).
<TABLE>
<CAPTION>
<S> <C>
Balance, December 31, 1994 $ 996
Net transfers to cash basis loans 250
Net paydowns (212)
Charge-offs (270)
Net transfers from other real estate (1) 13
Other (25)
Balance, September 30, 1995 $ 752
<F/N>
(1) Includes $35 million of in-substance foreclosed properties that were
transferred from other real estate to cash basis loans as a result of
the adoption of SFAS 114.
</TABLE>
The Corporation's total cash basis loans amounted to $752 million at
September 30, 1995, down $244 million, or 24 percent, from December 31,
1994.
The decrease in cash basis loans was primarily due to the previously
mentioned leveraged derivative contract charge-offs of $205 million against
the allowance for credit losses during the current quarter. Within cash
basis loans, leveraged derivative contracts were $79 million and $351
million at September 30, 1995 and December 31, 1994, respectively. Also
within cash basis loans, loans secured by real estate increased $38
million, to $394 million, during the first nine months of 1995. Commercial
and industrial loans to highly leveraged borrowers were $148 million and
$150 million at September 30, 1995 and December 31, 1994, respectively.
Other real estate decreased by $20 million during the first nine
months of 1995 primarily as a result of the adoption of SFAS 114 during the
first quarter of 1995 which required the transfer of in-substance
foreclosed properties, where the Corporation had not taken possession of
the collateral, to cash basis.
<PAGE> 33
NONPERFORMING ASSETS (continued)
The following table sets forth the approximate effect on interest
revenue of cash basis loans and renegotiated loans. This disclosure
reflects the interest on loans which were carried on the balance sheet and
classified as either cash basis or renegotiated at September 30 of each
year. The rates used in determining the gross amount of interest that
would have been recorded at the original rate were not necessarily
representative of current market rates.
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
(in millions) 1995 1994
<S> <C> <C>
Domestic Loans
Gross amount of interest that would have
been recorded at original rate $50 $30
Less, interest, net of reversals, recognized
in interest revenue 7 3
Reduction of interest revenue 43 27
International Loans
Gross amount of interest that would have
been recorded at original rate 13 12
Less, interest, net of reversals, recognized
in interest revenue - 3
Reduction of interest revenue 13 9
Total reduction of interest revenue $56 $36
</TABLE>
HIGHLY LEVERAGED TRANSACTIONS
Amounts included in the table and discussion which follow are
generally based on the definition that the Corporation uses in order to
monitor the extent of its exposure to highly leveraged transactions
("HLTs"). The Corporation's 1994 Annual Report on Form 10-K, on page 39,
provides a detailed discussion of the definition.
<TABLE>
<CAPTION>
Highly Leveraged Transactions
September 30, December 31,
(in millions) 1995 1994
<S> <C> <C>
Loans
Senior debt $772 $ 959
Subordinated debt 63 101
Total loans $835 $1,060
Unfunded commitments
Commitments to lend $565 $311
Letters of credit 123 198
Total unfunded commitments $688 $509
Equity investments $665 $413
Commitments to invest $313 $313
</TABLE>
<PAGE> 34
HIGHLY LEVERAGED TRANSACTIONS (continued)
The Corporation's outstanding loans were to 77 separate borrowers in
34 separate industry groups at September 30, 1995, compared to 76 separate
borrowers in 30 separate industry groups at December 31, 1994. There were
no industry concentrations which exceeded 10 percent of total HLT loans
outstanding at September 30, 1995.
In addition to the amounts shown in the table above, at September 30,
1995, the Corporation had issued commitment letters which had been
accepted, subject to documentation and certain other conditions, of $665
million (which were in various stages of syndication) and had additional
HLTs in various stages of discussion and negotiation.
During the first nine months of 1995, the Corporation originated $1.4
billion of HLT commitments. It should be noted that the Corporation's
loans and commitments in connection with HLTs fluctuate as new loans and
commitments are made and as loans and commitments are syndicated,
participated or paid.
All loans and commitments to finance HLTs are reviewed and approved by
senior credit officers of the Corporation. In addition to a strict
transactional and credit approval process, the portfolio of leveraged loans
and commitments is actively monitored and managed to minimize risk through
diversification among borrowers and industries. As part of this strategy,
sell and hold targets are regularly updated in connection with market
opportunities and the addition of new HLTs. Retention by the Corporation
after syndication and sales of loan participations has typically been less
than $50 million, and the average outstanding for the portfolio at
September 30, 1995 was less than $11 million. However, at September 30,
1995, the Corporation had total exposure (loans outstanding plus unfunded
commitments) in excess of $50 million to 9 separate highly leveraged
borrowers.
At September 30, 1995, $148 million of the HLT loan portfolio was on a
cash basis. In addition, $6 million of the equity investments in HLT
companies represented assets acquired in credit workouts, which are
reported as other nonperforming assets. Net charge-offs of $28 million of
HLT loans were recorded in the first nine months of 1995. In addition, the
Corporation recorded a net gain of $109 million in connection with the
sales and/or write-offs of its equity investments in highly leveraged
companies during the first nine months of 1995.
Generally, fees (typically 2 to 4 percent of the principal amount
committed) and interest charged (typically LIBOR plus 1.5 to 3 percent) on
HLT loans are higher than on other credits. The Corporation does not
account for revenue or expenses from HLTs separately from its other
corporate lending activities. However, it is estimated that transaction
fees recognized for lending activities relating to HLTs were approximately
$80 million during the first nine months of 1995 and that as of September
30, 1995, approximately $19 million of fees were deferred and will be
recognized as future revenue.
<PAGE> 35
RECENT DEVELOPMENTS
Following the sharp increase in interest rates during the first
quarter of 1994, various counterparties that had entered into leveraged
derivative transactions with certain subsidiaries of the Corporation
experienced losses and some of those counterparties have made claims
against the Corporation. The Corporation has settled some of the claims
made by certain counterparties and is contesting allegations made by
others. In the fourth quarter of 1994, Procter & Gamble brought a lawsuit
against Bankers Trust Company and its subsidiaries ("BTCo."). In the first
quarter of 1995 the suit was amended to include BT Securities Corporation,
and in the third quarter of 1995, the suit was further amended to add
Claims under Title IX of the Organized Crime Control Act of 1970. The suit
seeks to void and rescind two interest rate swap transactions entered into
with BTCo. and claims $195.5 million in compensatory damages and
unspecified punitive damages.
<PAGE> 36
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(4) Instruments Defining the Rights of Security Holders,
Including Indentures
(v) - The Corporation hereby agrees to furnish to the
Commission, upon request, a copy of any instru-
ments defining the rights of holders of long-term
debt issued by Bankers Trust New York Corporation
or its subsidiaries.
(12) Statement re Computation of Ratios
(27) Financial Data Schedule
(b) Reports on Form 8-K - Bankers Trust New York Corporation filed
two reports on Form 8-K during the quarter ended September 30,
1995.
- The report dated July 20, 1995 filed the Corporation's Press
Release dated July 20, 1995, which announced earnings for the
quarter ended June 30, 1995.
- The report dated September 21, 1995 filed the Corporation's
Press Release which announced that Frank N. Newman has joined
Bankers Trust New York Corporation and Bankers Trust Company as
senior vice chairman and a director.
<PAGE> 37
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, on November 14, 1995.
BANKERS TRUST NEW YORK CORPORATION
BY: GEOFFREY M. FLETCHER
Geoffrey M. Fletcher
Senior Vice President and
Principal Accounting Officer
BANKERS TRUST NEW YORK CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1995
EXHIBIT INDEX
(4) Instruments Defining the Rights of Security
Holders, Including Indentures
(v) - Long-Term Debt Indentures (a)
(12) Statement re Computation of Ratios
(a) - Computation of Consolidated Ratios of
Earnings to Fixed Charges
(b) - Computation of Consolidated Ratios of
Earnings to Combined Fixed Charges and
Preferred Stock Dividend Requirements
(27) Financial Data Schedule
[FN]
(a) The Corporation hereby agrees to furnish to the Commission, upon
request, a copy of any instruments defining the rights of holders of
long-term debt issued by Bankers Trust New York Corporation or its
subsidiaries.
<PAGE> 38
<PAGE> 39
<PAGE>
<TABLE>
EXHIBIT 12(a)
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
COMPUTATION OF CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
(dollars in millions)
<CAPTION>
Nine Months
Ended
Year Ended December 31, Sept. 30,
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Earnings:
1. Income (loss) before
income taxes and
cumulative effects
of accounting
changes $ 815 $ 834 $ 906 $1,550 $ 869 $ 89
2. Add: Fixed charges
excluding
capitalized
interest
(Line 10) 4,826 3,614 3,099 3,148 3,884 3,841
3. Less: Equity in undistri-
buted income of
unconsolidated
subsidiaries and
affiliates 47 31 40 30 45 22
4. Earnings including
interest on deposits 5,594 4,417 3,965 4,668 4,708 3,908
5. Less: Interest on
deposits 2,226 1,589 1,119 1,013 965 998
6. Earnings excluding
interest on deposits$3,368 $2,828 $2,846 $3,655 $3,743 $2,910
Fixed Charges:
7. Interest Expense $4,799 $3,585 $3,072 $3,122 $3,858 $3,821
8. Estimated interest
component of net
rental expense 27 29 27 26 26 20
9. Amortization of debt
issuance expense - - - - - -
10. Total fixed charges
including interest on
deposits and excluding
capitalized interest 4,826 3,614 3,099 3,148 3,884 3,841
11. Add: Capitalized
interest - - - - - -
12. Total fixed charges 4,826 3,614 3,099 3,148 3,884 3,841
13. Less: Interest on
deposits
(Line 5) 2,226 1,589 1,119 1,013 965 998
14. Fixed charges excluding
interest on deposits $2,600 $2,025 $1,980 $2,135 $2,919 $2,843
Consolidated Ratios of Earnings
to Fixed Charges:
Including interest on
deposits
(Line 4/Line 12) 1.16 1.22 1.28 1.48 1.21 1.02
Excluding interest on
deposits
(Line 6/Line 14) 1.30 1.40 1.44 1.71 1.28 1.02
</TABLE>
<PAGE>
<TABLE>
EXHIBIT 12(b)
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
COMPUTATION OF CONSOLIDATED RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
(dollars in millions)
<CAPTION>
Nine Months
Ended
Year Ended December 31, Sept. 30,
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Earnings:
1. Income (loss) before
income taxes and
cumulative effect
of accounting
changes $ 815 $ 834 $ 906 $1,550 $ 869 $ 89
2. Add: Fixed charges
excluding
capitalized
interest
(Line 13) 4,826 3,614 3,099 3,148 3,884 3,841
3. Less: Equity in undistri-
buted income of
unconsolidated
subsidiaries and
affiliates 47 31 40 30 45 22
4. Earnings including
interest on deposits 5,594 4,417 3,965 4,668 4,708 3,908
5. Less: Interest on
deposits 2,226 1,589 1,119 1,013 965 998
6. Earnings excluding
interest on deposits$3,368 $2,828 $2,846 $3,655 $3,743 $2,910
Preferred Stock Dividend Requirements:
7. Preferred stock dividend
requirements $ 31 $ 34 $ 30 $ 23 $ 28 $ 36
8. Ratio of income from
continuing operations
before income taxes to
income from continuing
operations after income
taxes 123% 125% 142% 145% 141% 147%
9. Preferred stock dividend
requirements on a pretax
basis $ 38 $ 43 $ 43 $ 33 $ 39 $ 53
Fixed Charges:
10. Interest Expense $4,799 $3,585 $3,072 $3,122 $3,858 $3,821
11. Estimated interest
component of net
rental expense 27 29 27 26 26 20
12. Amortization of debt
issuance expense - - - - - -
13. Total fixed charges
including interest on
deposits and excluding
capitalized interest 4,826 3,614 3,099 3,148 3,884 3,841
14. Add: Capitalized
interest - - - - - -
15. Total fixed charges 4,826 3,614 3,099 3,148 3,884 3,841
16. Add: Preferred stock
dividend require-
ments - pretax
(Line 9) 38 43 43 33 39 53
<PAGE>
17. Total combined fixed
charges and preferred
stock dividend require-
ments on a pretax
basis 4,864 3,657 3,142 3,181 3,923 3,894
18. Less: Interest on
deposits
(Line 5) 2,226 1,589 1,119 1,013 965 998
19. Combined fixed charges
and preferred stock
dividend requirements
on a pretax basis
excluding interest on
deposits $2,638 $2,068 $2,023 $2,168 $2,958 $2,896
Consolidated Ratios of Earnings
to Combined Fixed Charges
and Preferred Stock
Dividend Requirements:
Including interest on
deposits
(Line 4/Line 17) 1.15 1.21 1.26 1.47 1.20 1.00
Excluding interest on
deposits
(Line 6/Line 19) 1.28 1.37 1.41 1.69 1.27 1.00
</TABLE>
<PAGE>
BANKERS TRUST NEW YORK CORPORATION
280 PARK AVENUE
NEW YORK, NEW YORK 10017
Geoffrey M. Fletcher
Senior Vice President and
Principal Accounting Officer
November 14, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
Accompanying this letter is Bankers Trust New York Corporation's
quarterly report on Form 10-Q for the quarter ended September 30, 1995 (the
"Form 10-Q"). The Form 10-Q is being filed electronically through the
EDGAR System.
If there are any question or comments in connection with the enclosed
filing, please contact the undersigned at 212-250-7098.
Very truly yours,
BANKERS TRUST NEW YORK CORPORATION
By: GEOFFREY M. FLETCHER
Geoffrey M. Fletcher
Senior Vice President and
Principal Accounting Officer
Attachment
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BANKERS
TRUST NEW YORK CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CONDITION
AT SEPTEMBER 30, 1995 AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,715
<INT-BEARING-DEPOSITS> 1,605
<FED-FUNDS-SOLD> 29
<TRADING-ASSETS> 50,364
<INVESTMENTS-HELD-FOR-SALE> 7,140
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 12,786
<ALLOWANCE> 1,032
<TOTAL-ASSETS> 103,949
<DEPOSITS> 24,157
<SHORT-TERM> 34,472<F1>
<LIABILITIES-OTHER> 6,522<F2>
<LONG-TERM> 8,354
<COMMON> 84
0
865
<OTHER-SE> 4,112
<TOTAL-LIABILITIES-AND-EQUITY> 103,949
<INTEREST-LOAN> 682
<INTEREST-INVEST> 296
<INTEREST-OTHER> 1,343<F3>
<INTEREST-TOTAL> 4,429
<INTEREST-DEPOSIT> 998
<INTEREST-EXPENSE> 3,821
<INTEREST-INCOME-NET> 608
<LOAN-LOSSES> 21
<SECURITIES-GAINS> 29
<EXPENSE-OTHER> 2,140
<INCOME-PRETAX> 131
<INCOME-PRE-EXTRAORDINARY> 131
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89
<EPS-PRIMARY> .66
<EPS-DILUTED> .65
<YIELD-ACTUAL> 1.07
<LOANS-NON> 752
<LOANS-PAST> 0
<LOANS-TROUBLED> 101
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,252
<CHARGE-OFFS> 270
<RECOVERIES> 29
<ALLOWANCE-CLOSE> 1,032
<ALLOWANCE-DOMESTIC> 273
<ALLOWANCE-FOREIGN> 245
<ALLOWANCE-UNALLOCATED> 514
<FN>
<F1>Short-term borrowings include the following:
Securities sold under repurchase agreements 17,899
Other short-term borrowings 16,573
Total 34,472
<F2>Other liabilities include the following:
Accounts payable and accrued expenses 4,351
Other liabilities 2,171
Total 6,522
<F3>Other interest income includes the following:
Interest-bearing deposits with banks 154
Federal funds sold 68
Securities purchased under resale agreements 750
Securities borrowed 371
Total 1,343
</FN>
</TABLE>
