<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 22, 1998
BANKERS TRUST NEW YORK CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation)
1-5920 13-6180473
(Commission file number) (IRS employer identification no.)
130 LIBERTY STREET, NEW YORK, NEW YORK 10006
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (212) 250-2500
<PAGE>
Item 5. Other Events
A) On January 22, 1998, Bankers Trust New York Corporation (the
"Registrant") released financial information with respect to the
quarter ended December 31, 1997. This Current Report on Form 8-K
files the Press Release which contains certain financial
information to be incorporated into currently effective
registration statements filed by the Registrant with the
Securities and Exchange Commission under the Securities Act of
1933, as amended. Such financial information contained in the
Registrant"s Press Release dated January 22, 1998, is described
below and is incorporated herein by reference.
1. Review of certain financial information.
2. The unaudited consolidated financial position of
Bankers Trust New York Corporation and its subsidiaries at
December 31, 1997 and September 30, 1997 and the audited
consolidated financial position at December 31, 1996 and its
unaudited consolidated results of operations for each of the
three-month and twelve-month periods ended December 31, 1997, and
December 31, 1996, and the three-month period ended September 30,
1997.
In the opinion of the Registrant's management, all material
adjustments necessary for a fair presentation of the
Corporation's consolidated financial position at December 31,
1997, September 30, 1997 and December 31, 1996 and its
consolidated results of operations for the three-month and twelve-
month periods ended December 31, 1997 and December 31, 1996 and
the three-month period ended September 30, 1997 have been made.
B) The following schedules were distributed at the analysts
meeting held by the Corporation on January 22, 1998:
- Preliminary Cross Border Outstandings by Region at
December 31, 1997 is contained in Exhibit 99.2
- Preliminary Cross Border Outstandings by Country at
December 31, 1997 is contained in Exhibit 99.2
- Preliminary Risk-Adjusted Credit Capital & Credit
Exposure at December 31, 1997 is contained in
Exhibit 99.2
<PAGE>
Item 7. Financial Statements and Exhibits
(c) Exhibits
(99.1) Earnings Press Release of the Registrant
dated January 22, 1998.
(99.2) Preliminary Cross Border Outstandings by
Region at December 31, 1997
(99.2) Preliminary Cross Border Outstandings by
Country at December 31, 1997
(99.2) Preliminary Risk-Adjusted Credit Capital and
Credit Exposure at December 31, 1997
<PAGE>
SIGNATURES
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, hereunto duly
authorized.
BANKERS TRUST NEW YORK CORPORATION
By /s/ RONALD HASSEN
RONALD HASSEN
Senior Vice President
(Principal Accounting Officer)
January 22, 1998
<PAGE>
BANKERS TRUST NEW YORK CORPORATION
FORM 8-K DATED JANUARY 22, 1998
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
(99.1) Earnings Press Release of the
Registrant dated January 22, 1998.
(99.2) Preliminary Cross Border Outstandings by
Region at December 31, 1997
(99.2) Preliminary Cross Border Outstandings by
Country at December 31, 1997
(99.2) Preliminary Risk-Adjusted Credit Capital and
Credit Exposure at December 31, 1997
THURSDAY, JANUARY 22, 1998
BANKERS TRUST EARNS $7.66 PER SHARE IN 1997, UP 13% FROM 1996
FOURTH QUARTER EARNINGS PER SHARE OF $1.82 INCREASE 14%
New York, January 22, 1998 -- Bankers Trust New York Corporation
(BT) today reported that diluted earnings per share for the full
year were $7.66, up 13% from the $6.76 earned during 1996. Net
income for 1997 was $866 million, compared with $766 million of
earnings in 1996. Return on common equity for the year was
15.6%.
BT's diluted earnings per share in the fourth quarter of 1997
were $1.82, 14% above the $1.59 per share earned in the same
period last year. Net income in the fourth quarter of 1997 was
$207 million, compared with $184 million in the 1996 fourth
quarter and $246 million in the third quarter of 1997. Return on
common equity in the quarter was 14.8%.
"Bankers Trust recorded solid gains in revenue growth and
profitability in 1997," said Frank Newman, chairman of the board
of directors and chief executive officer of Bankers Trust.
"Revenues for the year were at the Corporation"s highest level in
history. The advances in 1997 were achieved despite volatile
market conditions in the fourth quarter, particularly in emerging
markets. While our fourth quarter results trailed those of the
strong third quarter of 1997, they exceeded year-earlier levels."
Mr. Newman added: " The increase in corporate finance fees to a
record $324 million in the fourth quarter underscored the
continued strong momentum of our merger with Alex. Brown and our
ability to provide clients with the full range of financing
alternatives. This performance provides a strong platform for
the extension of Bankers Trust's global business with the
recently announced agreement to acquire the European cash
equities activities of NatWest Markets, the leading U.K. and
European research house."
For the current quarter, total revenues of $1.519 billion were up
$164 million from fourth quarter 1996 revenues of $1.355 billion.
Total noninterest expenses of $1.233 billion for the fourth
quarter of 1997 increased $150 million from the fourth quarter of
1996.
The current quarter included an after-tax gain of $41 million on
the sale of the Corporation's defined contribution recordkeeping
and participant services business. Also included in the fourth
quarter of 1997 were $27 million in after-tax charges primarily
related to expenses associated with relocation of certain Asian
operations and to legal claims.
For the full year, total revenues of $6.220 billion were up
$1.051 billion, or 20%, from 1996 revenues of $5.169 billion.
Revenues increased in most of the Firm's business units.
Total noninterest expenses for 1997 increased $943 million, or
23%, from 1996. This increase was primarily due to higher
incentive compensation and employee benefits related to the
improved financial performance. Also included in noninterest
expenses for 1997 were restructuring charges of $57 million
associated with the merger with Alex. Brown, such as severance,
lease terminations and direct costs of completing the merger, and
other integration costs of $42 million.
At December 31, 1997, total cash basis loans were $240 million,
down from $298 million at September 30, 1997 and $452 million at
December 31, 1996. Other nonperforming assets at December 31,
1997 were $38 million, up from $5 million at September 30, 1997
and $10 million at December 31, 1996. The increase in the
current quarter primarily resulted from swaps in Asia.
2
At December 31, 1997, the total allowance for credit losses was
$997 million as compared to $972 million at September 30, 1997.
During the fourth quarter of 1997, the Corporation recognized
charge-offs of $41 million and recoveries of $46 million.
Included in the fourth quarter of 1997 charge-offs were $21
million related to Asian counterparties. Also, the Corporation
recorded a $20 million provision for credit losses compared to
$10 million in the third quarter of 1997 and none in the fourth
quarter of 1996.
3
ORGANIZATIONAL HIGHLIGHTS*
Total Non- Pretax Net
Fourth Quarter 1997 Total Interest Income/ Income/
(in millions) Revenue Expenses (Loss) (Loss)
Investment Banking $ 508 $ 302 $206 $147
Risk Management Services 19 76 (57) (41)
Trading & Sales 152 67 85 61
Private Client Services Group 184 157 27 19
Global Institutional Services 336 240 96 69
Australia/New Zealand 141 104 37 26
Asia (16) 23 (39) (27)
Latin America 132 124 8 4
Corporate/Other 63 140 (77) (51)
Total $1,519 $1,233 $286 $207
Total Non- Pretax Net
Third Quarter 1997 Total Interest Income/ Income/
(in millions) Revenue Expenses (Loss) (Loss)
Investment Banking $ 625 $335 $290 $204
Risk Management Services 117 101 16 11
Trading & Sales 128 86 42 30
Private Client Services Group 174 145 29 20
Global Institutional Services 241 211 30 21
Australia/New Zealand 136 113 23 17
Asia 8 34 (26) (19)
Latin America 203 144 59 42
Corporate/Other 138 250 (112) (80)
Total $1,770 $1,419 $351 $246
Total Non- Pretax Net
Fourth Quarter 1996 Total Interest Income/ Income/
(in millions) Revenue Expenses (Loss) (Loss)
Investment Banking $ 374 $251 $123 $ 83
Risk Management Services 108 103 5 3
Trading & Sales 132 76 56 38
Private Client Services Group 156 137 19 13
Global Institutional Services 220 200 20 14
Australia/New Zealand 140 91 49 33
Asia 35 28 7 5
Latin America 102 90 12 8
Corporate/Other 88 107 (19) (13)
Total $1,355 $1,083 $272 $184
* Organizational Unit business results are determined based on
the Corporation's internal management accounting process, which
allocates revenue and expenses among the organizational
units. Because the Corporation's business is diverse in nature
and its operations are integrated, it is impractical to segregate respective
contributions of the organizational units with precision. As a result,
estimates and judgments have been made to
apportion revenue and expense items. In addition, certain
revenue and expenses have been segregated and reported in
Corporate/Other because, in the opinion of management, they could
not be reasonably allocated or because their contributions to a
particular organizational unit would be distortive. In order to
provide comparability from one period to the next,
the Corporation will generally restate this analysis to conform
with material changes in the allocation process and/or significant
changes in organizational structure.
4
Organizational Unit Results
The Investment Banking business contributed net income of $147
million in the fourth quarter of 1997, up $64 million from a year
ago and down $57 million from the previous quarter. The increase
from the prior year period reflected higher corporate finance
fees and higher revenues from private equity investments. The
decline from the prior quarter was mainly due to mark-to-market
losses on fixed income securities.
Risk Management Services incurred a net loss of $41 million in
the fourth quarter of 1997 compared to net income of $3 million
in the fourth quarter of 1996 and net income of $11 million in
the previous quarter. The loss resulted primarily from less
favorable trading results, including losses from equity
derivatives and Asian activities as compared to the prior year
period and previous quarter.
Trading & Sales contributed $61 million of net income in the
fourth quarter of 1997, up $23 million from the 1996 fourth
quarter and up $31 million from the previous quarter. The current
quarter reflected higher revenue from foreign exchange
activities.
The Corporation's Private Client Services Group business reported
net income of $19 million for the current quarter, up $6 million
from the 1996 comparable period and down $1 million from the
prior quarter. The current quarter included improved revenues
from fiduciary and funds management and higher fees for brokerage
services as compared to the prior year period.
Global Institutional Services contributed $69 million of net
income in the fourth quarter of 1997, up $55 million from the
1996 fourth quarter and up $48 million from the previous quarter.
The current quarter included the $41 million after-tax gain on
the sale of the Corporation's defined contribution recordkeeping
and participant services business. The current quarter also
reflected improved results from investment management and
securities lending activities as compared to the fourth quarter
of 1996.
Net income of the Australia/NZ business was $26 million in the
fourth quarter of 1997, down $7 million from the fourth quarter
of 1996 and up $9 million from the previous quarter. The decline
in net income from the prior year period was mainly attributable
to an increase in personnel-related costs as a result of higher
staff levels offset partly by higher revenues from corporate
finance activities. The current quarter reflected improved
results from corporate finance activities as compared to the
third quarter of 1997. At December 31, 1997, assets under
management in Australia/NZ's investment management business were
approximately $41 billion, compared to $45 billion and $37
billion at September 30, 1997 and December 31, 1996 respectively.
The decrease in assets under management as compared to the prior
quarter was due to a decline in foreign currency rates.
Asia net loss was $27 million in the fourth quarter of 1997,
compared to net income of $5 million in the fourth quarter of
1996 and a net loss of $19 million in the third quarter of 1997.
The current quarter included mark-to-market losses on fixed
income securities and swaps with Asian counterparties resulting
from the market turmoil and widening credit spreads in Asia.
Latin America net income was $4 million in the fourth quarter of
1997, down $4 million from the fourth quarter of 1996 and down
$38 million from the third quarter of 1997. The current quarter
included lower trading revenues. The
5
prior quarter included an after-tax gain of $20 million resulting
from the completion of the final stage in the sale of 50% of the
Corporation's stake in a Chilean insurance company.
Corporate/Other net loss was $51 million in the fourth quarter of
1997, compared with a net loss of $13 million in the fourth
quarter of 1996 and a net loss of $80 million in the third
quarter of 1997. The current quarter included charges primarily
related to expenses associated with relocation of certain Asian
operations and to legal claims. The current quarter also
included a $20 million provision for credit losses compared to
$10 million in the third quarter of 1997 and none in the fourth
quarter of 1996. During the third quarter, the Corporation
recognized $57 million in pre-tax restructuring charges and $42
million in other integration costs, offset partly by the pre-tax
gain of $73 million on the sale of 280 Park Avenue, a midtown
Manhattan office building. The prior year period included
reserves related to the transaction processing business.
QUARTERLY FINANCIAL COMPARISONS
Fourth Quarter 1997 Versus Fourth Quarter 1996
Net income of $207 million for the fourth quarter of 1997 was up
13% from the $184 million earned in the fourth quarter of 1996.
Fourth quarter 1997 combined trading revenue and trading-related
net interest revenue of $218 million decreased $135 million as
compared to the fourth quarter of 1996. Page 11 shows combined
trading results by organizational unit. All other noninterest
revenue of $1.094 billion was up $294 million from the prior year
period.
Fiduciary and funds management revenue was $284 million in the
fourth quarter of 1997, up $51 million from the prior year
period. Client processing services, funds management and global
private banking commissions contributed to this increase.
Corporate finance fees of $324 million increased 20% from the
$271 million earned in the fourth quarter of 1996, primarily due
to higher merger and acquisition fees, higher fees for arranging
bond and equity financings and higher financial advisory fees.
Other fees and commissions of $167 million increased $30 million
from the prior year quarter primarily resulting from increased
fees for brokerage services.
Other noninterest revenue totaled $82 million in the current
quarter, compared to $34 million in the fourth quarter of 1996.
The current quarter included a gain on the sale of the
Corporation's defined contribution recordkeeping and participant
services business.
Salaries and commissions expense increased $19 million, or 6%,
principally due to a 5% increase in the average number of
employees and annual pay increases. Incentive compensation and
employee benefits, the largest component of noninterest expenses,
increased $46 million due to higher profitability and the
increase in the average number of employees.
6
Fourth Quarter 1997 versus Third Quarter 1997
Net income of $207 million for the fourth quarter of 1997 was
down 16% from the $246 million earned in the third quarter of
1997. The decrease in net income was primarily due to a $315
million decline in trading revenue offset partly by a $41 million
increase in trading-related net interest revenue and a $186
million decrease in total noninterest expenses. Fourth quarter
1997 combined trading revenue and trading-related net interest
revenue of $218 million decreased $274 million from the third
quarter of 1997.
Corporate finance fees of $324 million increased $19 million from
the prior quarter. The increase was primarily due to higher
financial advisory fees, higher merger and acquisition fees and
higher fees for arranging bond and equity financings, offset
partly by a decrease in loan syndication fees.
Other noninterest revenue totaled $82 million in the current
quarter, compared to $171 million in the prior quarter. The
current quarter included a gain on the sale of the Corporation's
defined contribution recordkeeping and participant services
business. The third quarter included a gain on the sale of 280
Park Avenue and the remaining gain on the sale of 50% of the
Corporation's stake in a Chilean insurance company.
Total noninterest expenses of $1.233 billion decreased by $186
million, or 13%, from the third quarter of 1997. Incentive
compensation and employee benefits, the largest component of
noninterest expenses, decreased $179 million due to lower
revenues. Total noninterest expenses in the third quarter of
1997 included restructuring charges associated with the merger of
Alex. Brown, such as severance, lease terminations and direct
costs of completing the merger, and other integration costs.
7
CAPITAL
In March 1997, the Corporation became the first banking
institution to adopt the new Market Risk Amendment to the risk-
based capital guidelines issued by the Federal Reserve and the
Bank for International Settlements (BIS). The amendment changed
the calculation of the risk-weighted assets for trading accounts
by incorporating the use of internal models to measure market
risks. In addition, the amendment required that the capital and
risk-adjusted assets of the Corporation's Section 20 subsidiary,
BT Alex. Brown Incorporated, no longer be excluded when
calculating the risk-based capital ratios at the holding company
level. All banking institutions with significant trading
activity must adopt this Amendment by January 1, 1998. During
1997, early adoption was permissible with prior approval from the
institution's primary federal regulator.
As calculated under these new rules, the Corporation estimates
that its ratios of Tier 1 Capital and Total Capital to risk-
weighted assets were approximately 8.3% and 14.2%, respectively,
as of December 31, 1997.
The remainder of this release contains the following tables:
Page
1. BTNY Consolidated Quarterly Statement of Income 9
2. BTNY Consolidated Statement of Income 10
3. Combined Trading Revenue and Trading-Related Net
Interest Revenue 11
4. Net Interest Revenue 11
5. BTNY Consolidated Balance Sheet 12
6. Stock and Capital Data 13
7. Nonperforming Assets and Allowance for Credit Losses 14
For additional information, contact William McBride, 212-250-7961.
Bankers Trust news releases, including quarterly results, are
available on the Internet (http://www.bankerstrust.com/earnings).
8
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED QUARTERLY STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
Fourth Third Fourth
Quarter Quarter Quarter
1996 1997 1997
NET INTEREST REVENUE
Interest revenue $1,686 $1,789 $2,085
Interest expense 1,399 1,474 1,712
Net interest revenue 287 315 373
Provision for credit losses - 10 20
Net interest revenue after provision
for credit losses 287 305 353
NONINTEREST REVENUE
Trading* 268 387 72
Fiduciary & funds management 233 277 284
Corporate finance fees 271 305 324
Other fees & commissions 137 158 167
Net revenue from equity investment
transactions 48 73 95
Securities available for sale gains 24 18 58
Insurance premiums 53 76 84
Other 34 171 82
Total noninterest revenue 1,068 1,465 1,166
Total revenue 1,355 1,770 1,519
NONINTEREST EXPENSES
Salaries and commissions 313 333 332
Incentive compensation &
employee benefits 318 543 364
Agency & other professional
service fees 85 105 95
Communication & data services 60 58 58
Occupancy, net 46 45 49
Furniture & equipment 51 55 61
Travel & entertainment 36 36 41
Provision for policyholder benefits 64 90 102
Other 110 97 131
Restructuring charges - 57 -
Total noninterest expenses 1,083 1,419 1,233
Income before income taxes 272 351 286
Income taxes 88 105 79
NET INCOME $ 184 $ 246 $ 207
NET INCOME APPLICABLE TO COMMON STOCK** $ 170 $ 235 $ 195
Cash dividends declared per common share $1.00 $1.00 $1.00
EARNINGS PER COMMON SHARE:
BASIC $1.69 $2.33 $1.95
DILUTED $1.59 $2.19 $1.82
* The Corporation accounts for revenues from a wide range of
business activities as "trading".
See table on page 11.
** Amounts shown are used to calculate basic earnings per common
share.
Certain prior period amounts have been reclassified to conform
to the current presentation.
9
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
YEAR ENDED DECEMBER 31, 1996 1997
NET INTEREST REVENUE
Interest revenue $6,508 $7,285
Interest expense 5,451 5,926
Net interest revenue 1,057 1,359
Provision for credit losses 5 30
Net interest revenue after provision
for credit losses 1,052 1,329
NONINTEREST REVENUE
Trading* 1,014 1,085
Fiduciary & funds management 876 1,059
Corporate finance fees 922 1,113
Other fees & commissions 534 606
Net revenue from equity investment
transactions 230 224
Securities available for sale gains 75 158
Insurance premiums 230 287
Other 236 359
Total noninterest revenue 4,117 4,891
Total revenue 5,169 6,220
NONINTEREST EXPENSES
Salaries and commissions 1,154 1,273
Incentive compensation & employee benefits 1,216 1,726
Agency & other professional service fees 321 391
Communication & data services 237 231
Occupancy, net 174 181
Furniture & equipment 186 224
Travel & entertainment 113 142
Provision for policyholder benefits 280 333
Other 357 423
Restructuring charges - 57
Total noninterest expenses 4,038 4,981
Income before income taxes 1,131 1,239
Income taxes 365 373
NET INCOME $ 766 $ 866
NET INCOME APPLICABLE TO COMMON STOCK** $ 715 $ 817
Cash dividends declared per common share $4.00 $4.00
EARNINGS PER COMMON SHARE:
BASIC $7.12 $8.15
DILUTED $6.76 $7.66
* The Corporation accounts for revenues from a wide range of
business activities as "trading".
See quarterly information on page 11.
** Amounts shown are used to calculate basic earnings per common
share.
Certain prior period amounts have been reclassified to conform
to the current presentation.
10
COMBINED TRADING REVENUE AND TRADING-RELATED NET INTEREST REVENUE
The Corporation views trading revenue and trading-related net
interest revenue (NIR) together, as presented in the table below.
Fourth Third Fourth
Quarter Quarter Quarter
(in millions) 1996 1997 1997
Trading Revenue $268 $387 $ 72
Trading-Related Net Interest
Revenue (Estimate) 85 105 146
Total Trading Revenue &
Trading-Related NIR $353 $492 $218
By Organizational Unit (in millions)
Investment Banking $ 56 $137 $ 28
Risk Management Services 114 112 7
Trading & Sales 114 103 122
Private Client Services Group 1 6 7
Global Institutional Services 2 1 4
Australia/New Zealand 34 30 33
Asia 15 54 (13)
Latin America 24 25 13
Corporate/Other (7) 24 17
Total Trading Revenue &
Trading-Related NIR $353 $492 $218
Note: The Corporation accounts for revenues from a wide range of
business activities as "trading". Investment Banking produces
trading revenues in secondary market activities with clients,
primarily in sectors where the Firm also serves as underwriter.
A small portion of trading revenues arise from private equity
investments that are accounted for on a mark-to-market basis.
Risk Management Services generates trading revenues primarily
from new derivative transactions with clients and in managing the
risks the Corporation assumes on such transactions. Trading &
Sales produces trading revenues through proprietary position-
taking, including arbitrage, as well as market making and other
client activities. Australia/New Zealand, Asia and Latin America
produce trading revenues from all the above business activities.
Corporate/Other includes various transactions which, for
management accounting purposes, are not recorded in
Organizational Units.
NET INTEREST REVENUE
Fourth Third Fourth
Quarter Quarter Quarter
($ in millions) 1996 1997 1997
Nontrading-related net
interest revenue(Estimate) $202 $210 $227
Trading-related net interest
revenue (Estimate) 85 105 146
Net interest revenue $287 $315 $373
Average rates (fully taxable basis)
Yield on interest-earning assets 6.72% 6.74% 7.45%
Cost of interest-bearing liabilities 5.93% 5.72% 6.33%
Interest rate spread .79% 1.02% 1.12%
Net interest margin 1.16% 1.21% 1.35%
Average balances (billions)
Loans $15.3 $19.0 $20.4
Total interest-earning assets $100.0 $105.7 $111.4
Total assets $126.8 $139.8 $147.9
Total interest-bearing liabilities $93.9 $102.2 $107.2
11
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
December 31 September 30 December 31
1996 1997* 1997*
ASSETS
Cash and due from banks $ 1,568 $ 1,625 $ 2,188
Interest-bearing deposits in banks 2,210 2,522 4,272
Federal funds sold 1,684 2,241 1,382
Sec. purch. under resale agreements 18,002 24,902 19,163
Securities borrowed 17,005 16,138 16,751
Trading assets:
Government securities 16,849 11,650 11,397
Corporate debt securities 8,033 9,362 8,128
Equity securities 6,089 8,010 7,914
Swaps, options & other
derivatives*** 11,220 13,520 17,673
Other trading assets 6,748 9,833 11,460
Total trading assets 48,939 52,375 56,572
Securities available for sale 7,920 7,577 8,081
Loans, net*** 15,107 20,544 19,106
Customer receivables 1,529 1,711 1,547
Accounts receivable &
accrued interest 3,032 3,977 4,785
Other assets 5,547 6,275 6,255
Total $122,543 $139,887 $140,102
LIABILITIES
Noninterest-bearing deposits
Domestic offices $ 2,600 $ 2,134 $ 2,776
Foreign offices 1,013 1,294 1,952
Interest-bearing deposits
Domestic offices 9,928 20,490 22,353
Foreign offices 16,774 22,161 15,749
Total deposits 30,315 46,079 42,830
Trading liabilities:
Securities sold, not yet purchased
Government securities 7,668 6,724 4,389
Equity securities 4,174 5,445 5,273
Other trading liabilities 334 407 519
Swaps, options & other derivatives 11,585 13,517 17,065
Total trading liabilities 23,761 26,093 27,246
Securities loaned and securities
sold under repurchase agreements 23,454 20,158 17,896
Other short-term borrowings 19,409 19,329 19,683
Accounts payable and
accrued expenses 4,792 6,255 6,536
Other liabilities*** 2,646 3,798 4,250
Long-term debt not included in
risk-based capital 8,732 7,655 11,169
Long-term debt included in
risk-based capital 2,576 2,918 3,312
Trust preferred capital securities** 730 1,471 1,472
Total liabilities 116,415 133,756 134,394
PREFERRED STOCK OF SUBSIDIARY 250 - -
STOCKHOLDERS' EQUITY
Preferred stock 810 703 658
Common stock 104 105 105
Capital surplus 1,437 1,541 1,563
Retained earnings 3,988 4,176 4,202
Common stock in treasury, at cost (372) (545) (889)
Other stockholders' equity (89) 151 69
Total stockholders' equity 5,878 6,131 5,708
Total $122,543 $139,887 $140,102
* Unaudited
** Mandatorily redeemable capital securities of subsidiary
trusts holding solely junior
subordinated deferrable interest debentures included in risk-
based capital
*** See table on page 14 for allocation of the allowance for
credit losses.
Certain prior period amounts have been reclassified to conform to
the current presentation.
12
STOCK AND CAPITAL DATA
Fourth Third Fourth
Quarter Quarter Quarter
1996 1997 1997
FOR THE QUARTER
Return on Average Common
Stockholders' Equity 13.2% 17.4% 14.8%
Return on Average Total Assets .58% .70% .56%
PER COMMON SHARE
Earnings:
Basic $1.69 $2.33 $1.95
Diluted $1.59 $2.19 $1.82
Cash Dividends Declared $1.00 $1.00 $1.00
Market Price, End of Period $86.25 $122.375 $112.4375
Book Value, End of Period $49.21 $51.65 $49.06
COMMON SHARES (shares in thousands except par value)
Common stock $1 par value:
Authorized, at period end 300,000 300,000 300,000
Issued, at period end 103,625 105,362 105,379
Common stock in treasury,
at period end 4,435 5,757 8,422
Average Common and Common Equivalent
Shares Outstanding
Basic 100,751 100,773 99,884
Diluted 107,425 107,449 107,285
CAPITAL RATIOS, END OF PERIOD
Common Stockholders' Equity
to Total Assets 4.1% 3.9% 3.6%
Total Stockholders' Equity
to Total Assets 4.8% 4.4% 4.1%
Bankers Trust New York Corporation:
Risk-Based Capital Ratios (1)
Tier 1 Capital 9.3% 8.4% 8.3%
Total Capital 13.8% 13.6% 14.2%
Leverage Ratio (1) 5.9% 4.9% 4.4%
Bankers Trust Company:
Risk-Based Capital Ratios (1)
Tier 1 Capital 9.3% 8.7% 8.8%
Total Capital 12.9% 12.1% 12.1%
Leverage Ratio (1) 5.3% 5.3% 5.3%
(1) Regulatory capital ratios at December 31, 1997 are
preliminary. Regulatory capital ratios at September 30, 1997
and December 31, 1997 reflect the adoption
of the Market Risk Amendment to the risk-based capital
guidelines. This Amendment changes the calculation of risk-weighted
assets for trading accounts. In
addition, it requires that the capital and risk-adjusted
assets of the Corporation's Section 20 subsidiary, BT Alex. Brown
Incorporated, be included when calculating the risk-based capital
ratios for Bankers Trust New York Corporation.
As a result of this adoption, the Corporation's leverage
ratios also reflect the capital and average assets of
BT Alex. Brown Incorporated. Previously, such
assets and capital were excluded. Regulatory capital ratios
at December 31, 1996 have not been restated for the adoption
of this Amendment.
13
NONPERFORMING ASSETS AND ALLOWANCE FOR CREDIT LOSSES
December 31 September 30 December 31
1996 1997 1997
Nonperforming assets (in millions)
Cash basis loans
Secured by real estate $272 $140 $117
Real estate related 25 25 15
Highly leveraged 117 56 41
Other 38 77 67
Total cash basis loans $452 $298 $240
Other nonperforming assets $10 $5 $38
Renegotiated loans
Secured by real estate $37 $37 $25
Total renegotiated loans $37 $37 $25
Other real estate $213 $190 $194
Total allowance for credit losses (in millions)
Balance, beginning of period $967 $973 $972
Net charge-offs (recoveries)
Charge-offs 21 30 41
Recoveries 27 19 46
Total net charge-offs (recoveries)* (6) 11 (5)
Provision for credit losses - 10 20
Balance, end of period (a) $973 $972 $997
(a) Allocation**:
Loans $773 $759 $699
Trading assets 190 200 285
Other liabilities 10 13 13
Balance, end of period $973 $972 $997
* Components of Net Charge-offs (Recoveries):
Secured by real estate $14 $(1) $ 5
Real estate related - - (2)
Highly leveraged (7) 7 (11)
Other (13) 5 3
Total $(6) $11 $(5)
** The Corporation believes that the total allowance for credit
losses is available for credit losses in its entire portfolio,
which is comprised of loans, credit-related commitments,
derivatives and other financial instruments. Due to a
multitude of complex and changing
factors that are collectively weighed in determining the
adequacy of the allowance for credit
losses, management expects that the allocation of the total
allowance for credit losses may be adjusted as risk factors change.
14
BANKERS TRUST NEW YORK CORPORATION
130 LIBERTY STREET
NEW YORK, NEW YORK 10006
Ronald Hassen
Senior Vice President
(Principal Accounting Officer)
January 22, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
Accompanying this letter is Bankers Trust New York
Corporation's report on Form 8-K dated January 22, 1998 (the
"Form 8-K"). The Form 8-K is being filed electronically through
the EDGAR System.
If there are any questions or comments in connection with
the enclosed filing, please contact the undersigned at 212-250-
4881.
Very truly yours,
BANKERS TRUST NEW YORK CORPORATION
By: RONALD HASSEN
RONALD HASSEN
Senior Vice President
(Principal Accounting Officer)
<PAGE>
Cross Border Outstandings by Region 1
December 31, 1997
($ billions) Preliminary
<TABLE>
<CAPTION>
FX/ Total % of Off B/S
Deriva- Trading Outstand- Total Commit-
Region Loans tives Assets Other2 ings Assets ments3 Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
West. Europe $1.8 $6.3 $5.7 $6.4 $20.2 14.4% $0.7 $20.9
Japan 0.0 2.8 1.5 2.6 7.0 5.0 0.0 7.0
Latin America 1.3 0.1 3.8 0.9 6.2 4.4 0.3 6.5
Asia (ex. Japan) 0.6 2.6 1.2 1.3 5.7 4.0 0.2 5.8
Australia/NZ 0.1 2.3 0.5 0.4 3.3 2.3 0.0 3.3
Canada 0.3 0.7 0.7 0.4 2.2 1.5 0.1 2.2
Emerging Europe 0.4 0.2 1.1 0.1 1.7 1.2 0.3 2.0
Other 0.1 0.2 0.5 0.1 0.8 0.6 0.1 1.0
Total Cross Border $4.7 $15.2 $15.0 $12.2 $47.0 33.5% $1.7 $48.7
<FN>
1 Based on FFIEC instructions. Shown by country of ultimate risk.
Excludes local country claims on local residents.
2 Other includes acceptances, resales, money market instruments and
securities available for sale.
3 Commitments include L/C's and guarantees.
</TABLE>
<PAGE>
Risk-adjusted Credit Capital & Credit Exposure
December 31, 1997
(Regions as % of Total) Preliminary
<TABLE>
<CAPTION>
Risk-adjusted
Region Credit Exposure Credit Capital
<S> <C> <C> <C>
US 36.1% 54.0%
West. Europe 30.9 16.8
Latin America 5.8 12.0
Asia (ex. Japan) 7.2 7.9
Australia/NZ 7.8 3.3
Canada 2.9 2.5
Emerging Europe 2.1 1.9
Japan 6.3 1.0
Other 0.9 0.5
Total 100.0% 100.0%
</TABLE>
<PAGE>
Cross Border Outstandings by Country 1
December 31, 1997
($ billions) Preliminary
<TABLE>
<CAPTION>
FX/ Total % of Off B/S
Deriva- Trading Outstand- Total Commit-
Country Loans tives Assets Other2 ings Assets ments3 Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Japan $0.0 $2.8 $1.5 $2.6 $7.0 4.98% $0.0 $7.0
France 0.4 1.0 0.9 1.9 4.1 2.96 0.2 4.3
Spain 0.2 0.2 0.7 2.4 3.5 2.53 0.0 3.5
Australia 0.1 2.1 0.3 0.4 2.9 2.05 0.0 2.9
Germany 0.1 0.9 1.0 0.7 2.7 1.94 0.1 2.9
Brazil 0.4 0.0 1.8 0.2 2.4 1.70 0.0 2.4
United Kingdom 0.1 1.8 0.3 0.1 2.3 1.67 0.1 2.4
Canada 0.3 0.7 0.7 0.4 2.2 1.54 0.1 2.2
Switzerland 0.1 0.6 0.9 0.4 1.9 1.36 0.0 2.0
Korea, Republic Of 0.1 0.7 0.2 0.7 1.6 1.14 0.1 1.7
Netherlands 0.1 0.5 0.3 0.4 1.4 0.98 0.1 1.4
Indonesia 0.2 0.7 0.1 0.1 1.2 0.86 0.0 1.2
Italy 0.2 0.3 0.5 0.1 1.1 0.79 0.0 1.1
Russian Federation 0.2 0.0 0.8 0.0 1.0 0.73 0.1 1.1
Mexico 0.2 0.0 0.7 0.1 0.9 0.67 0.1 1.0
Hong Kong 0.1 0.4 0.3 0.1 0.9 0.67 0.0 1.0
Cayman Islands 0.0 0.0 0.6 0.1 0.8 0.58 0.0 0.8
Argentina 0.2 0.0 0.4 0.1 0.7 0.52 0.1 0.8
Denmark 0.0 0.1 0.4 0.1 0.7 0.52 0.0 0.7
Thailand 0.0 0.5 0.0 0.1 0.6 0.40 0.0 0.6
<FN>
1 Based on FFIEC instructions. Shown by country of ultimate risk.
Excludes local country claims on local residents.
2 Other includes acceptances, resales, money market instruments and
securities available for sale.
3 Commitments include L/C's and guarantees.
</TABLE>
