<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) April 23, 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 April 23, 1998, Bankers Trust New York Corporation (the
"Registrant") released financial information with respect to the
quarter ended March 31, 1998. 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 April 23, 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 March
31, 1997 and March 31, 1998 and the audited consolidated
financial position at December 31, 1997 and its unaudited
condensed consolidated results of operations for each of the
three-month periods ended March 31, 1997, December 31, 1997, and
March 31, 1998.
In the opinion of the Registrant's management, all material
adjustments necessary for a fair presentation of the
Corporation's consolidated financial position at March 31, 1997,
December 31, 1997 and March 31, 1998 and its condensed
consolidated results of operations for the three-month periods
ended March 31, 1997, December 31, 1997 and March 31, 1998 have
been made.
B) The following schedules were distributed at the analysts
meeting held by the Corporation on April 23, 1998:
- Preliminary Selected Asian Cross Border Exposures at
March 31, 1998 is contained in Exhibit 99.2
- Estimated ROCE by Organizational Unit is contained in
Exhibit 99.2
<PAGE>
Item 7. Financial Statements and Exhibits
(c) Exhibits
(99.1) Earnings Press Release of the Registrant
dated April 23, 1998.
(99.2) Preliminary Selected Asian Cross Border
Exposures at March 31, 1998
(99.2) Estimated ROCE by Organizational Unit
<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
(Acting Principal Accounting Officer)
April 23, 1998
<PAGE>
BANKERS TRUST NEW YORK CORPORATION
FORM 8-K DATED APRIL 23, 1998
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
(99.1) Earnings Press Release of the
Registrant dated April 23, 1998.
(99.2) Preliminary Selected Asian Cross Border Exposures
at March 31, 1998
(99.2) Estimated ROCE by Organizational Unit
THURSDAY, APRIL 23, 1998
BANKERS TRUST EARNS $2.01 PER SHARE IN THE FIRST QUARTER OF 1998,
UP 14% FROM THE 1997 FIRST QUARTER EARNINGS PER SHARE OF $1.76
New York, April 23, 1998 -- Bankers Trust New York Corporation
(BT) today reported that diluted earnings per share for the first
quarter were $2.01, up 14% from the $1.76 earned in the first
quarter of 1997. Net income for the first quarter of 1998 was
$222 million, compared with $200 million in the first quarter of
1997.
Frank Newman, chairman of the board and chief executive officer,
said: "Bankers Trust generated broad-based improvement in both
revenue and profitability in the first quarter. Revenue before
credit provisions increased 21% from a year ago, while return on
equity rose to 16.7% from 14.7%. The 14% advance in earnings per
share in the first quarter was achieved despite losses recorded
in our Asian operations."
He added: "Bankers Trust nearly doubled investment banking profit
from a year ago, and increased our market share in such key
businesses as equities underwriting, high-yield securities
issuance and strategic advisory. The pending acquisition of
NatWest's European equities business will expand and reinforce
our strong competitive position. In addition to progress in
Investment Banking, Bankers Trust's first quarter results
benefited from solid advances in Trading & Sales and in Global
Institutional Services. These successes strengthen our
confidence that Bankers Trust's strategy is on track," Mr. Newman
said. "We have the capabilities, the focus and the momentum
needed to deliver superior results to our clients and our
shareholders."
For the current quarter, total revenue before the provision for
trading-related credit losses was up $296 million from first
quarter 1997. This increase reflected growth in nearly all of
the Firm's businesses. Total noninterest expenses of $1.325
billion for the first quarter of 1998 increased $221 million from
the first quarter of 1997.
In response to the economic developments in Asia, the Corporation
recorded a $60 million provision for trading-related credit
losses. During the first quarter of 1998, the Corporation's net
charge-offs were $51 million, which included $47 million related
to swaps with Asian counterparties. At March 31, 1998, the total
allowance for credit losses was $1.006 billion as compared to
$997 million at December 31, 1997.
At March 31, 1998, total cash basis loans were $247 million, up
slightly from $240 million at December 31, 1997 and down from
$332 million at March 31, 1997. Other nonperforming assets
(excluding other real estate) at March 31, 1998 were $334
million, up from $38 million at December 31, 1997 and $8 million
at March 31, 1997. The increase in the current quarter primarily
resulted from swaps with Indonesian and Thai counterparties.
During the quarter, the Corporation's cross-border exposures in
Korea, Indonesia, and Thailand declined 20% from $3.5 billion at
December 31, 1997 to $2.8 billion at March 31, 1998.
2
ORGANIZATIONAL HIGHLIGHTS*
Total Non- Pretax Net
First Quarter 1998 Total Interest Income/ Income/
(in millions) Revenue Expenses (Loss) (Loss)
Investment Banking $ 670 $ 424 $ 246 $177
Trading & Sales 215 128 87 63
Global Institutional Services 254 228 26 19
Private Client Services Group 171 147 24 17
Australia/New Zealand 145 107 38 27
Emerging Markets Group:
Latin America 167 145 22 16
Emerging Europe, Mid East
& Africa 34 25 9 7
Asia (51) 49 (100) (72)
Corporate/Other 28 72 (44) (32)
Total $1,633 $1,325 $ 308 $222
Total Non- Pretax Net
Fourth Quarter 1997 Total Interest Income/ Income/
(in millions) Revenue Expenses (Loss) (Loss)
Investment Banking $ 487 $ 334 $ 153 $110
Trading & Sales 182 116 66 48
Global Institutional Services 339 243 96 69
Private Client Services Group 182 158 24 18
Australia/New Zealand 145 108 37 26
Emerging Markets Group:
Latin America 134 129 5 3
Emerging Europe, Mid East
& Africa 9 13 (4) (3)
Asia (53) 46 (99) (71)
Corporate/Other 94 86 8 7
Total $1,519 $1,233 $ 286 $207
Total Non- Pretax Net
First Quarter 1997 Total Interest Income/ Income/
(in millions) Revenue Expenses (Loss) (Loss)
Investment Banking $ 450 $ 314 $ 136 $93
Trading & Sales 171 118 53 37
Global Institutional Services 218 209 9 6
Private Client Services Group 150 126 24 17
Australia/New Zealand 143 90 53 36
Emerging Markets Group:
Latin America 145 117 28 19
Emerging Europe, Mid East
& Africa 28 19 9 6
Asia 66 48 18 12
Corporate/Other 26 63 (37) (26)
Total $1,397 $1,104 $293 $200
* 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.
3
Changes in Organizational Structure
Risk Management Services businesses have been realigned within
Investment Banking, Trading & Sales, and Emerging Markets Group.
In addition, expenses related to certain staff functions which
were previously included in Corporate/Other have been assigned or
allocated to the organizational units. The funding benefit
attributed to the Corporation's capital, which was previously
included in Corporate/Other, is now allocated to the
organizational units based on management's best estimate of the
risk-adjusted capital.
Prior period results have been restated for the changes in
organizational structure and management accounting.
Organizational Unit Results
The Investment Banking business contributed net income of $177
million in the first quarter of 1998, up $84 million from a year
ago and $67 million from the previous quarter. The current
quarter continued to benefit from cross-selling activities
resulting from the merger with Alex. Brown. The increase from
the previous periods reflect higher corporate finance fees and
higher revenue from private equity investments. In addition, as
compared to the fourth quarter of 1997, trading revenue and
trading-related net interest revenue improved.
Trading & Sales contributed $63 million of net income in the
first quarter of 1998, up $26 million from the 1997 first quarter
and up $15 million from the previous quarter. The current
quarter reflected higher revenue primarily from equity arbitrage
activities as well as improved revenue from interest rate
derivatives as compared to the previous quarter. Higher revenue
from interest rate products contributed to the increase from the
prior year period.
Global Institutional Services contributed $19 million of net
income in the first quarter of 1998, up $13 million from the 1997
first quarter and down $50 million from the previous quarter. As
compared to the prior year period, the first quarter of 1998
reflected improved revenue from corporate trust and agency
services and asset management services. The first quarter 1998
operating results improved as a result of the sale of the
Corporation's defined contribution recordkeeping and participant
services business in the fourth quarter of 1997. This sale
resulted in a $41 million after-tax gain. First quarter 1998
results were also impacted by higher application development
costs associated with Year 2000 initiatives. At March 31, 1998,
assets under management in the Global Institutional Services
investment management business were approximately $251 billion,
compared to $243 billion and $182 billion at December 31, 1997
and March 31, 1997 respectively.
The Corporation's Private Client Services Group business reported
net income of $17 million for the current quarter, essentially
unchanged from the prior periods. At March 31, 1998, assets
under management in the Private Client Services Group investment
management business were approximately $37 billion, compared to
$34 billion and $26 billion at December 31, 1997 and March 31,
1997 respectively.
4
Net income of the Australia/NZ business was $27 million in the
first quarter of 1998, down $9 million from the first quarter of
1997 and up $1 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 revenue from corporate
finance activities and improved revenue from fiduciary and funds
management. At March 31, 1998, assets under management in
Australia/NZ's investment management business were approximately
$46 billion, compared to $41 billion and $37 billion at December
31, 1997 and March 31, 1997 respectively.
Emerging Markets Group
Latin America contributed net income of $16 million in the
current quarter, down $3 million from the prior year period and
up $13 million from the fourth quarter of 1997. The first
quarter of 1998 reflected improved trading revenue as compared to
the fourth quarter of 1997.
Emerging Europe, Middle East & Africa contributed net income of
$7 million in the current quarter and $6 million in the first
quarter of 1997 compared to a net loss of $3 million in the
previous quarter. The current quarter reflected higher trading
revenue as compared to the previous quarter.
Asia net loss was $72 million in the current quarter, compared
to net income of $12 million in the prior year period and a net
loss of $71 million in the previous quarter. The $72 million
loss in the current quarter reflected both the impact of a $60
million provision for trading-related credit losses as well as
mark-to-market valuation adjustments to trading assets, for
widening counterparty credit spreads. These two charges were
principally associated with Indonesian and Thai trading assets.
The previous quarter included mark-to-market losses on fixed
income securities and swaps with Asian counterparties.
Corporate/Other includes the income and expenses of smaller
businesses that are not included in the main organizational units
as well as some activities not associated with specific business
lines. It also includes the funding benefit attributed to the
Corporation's capital related to these areas. Corporate/Other
net loss was $32 million in the first quarter of 1998, compared
with a net loss of $26 million in the first quarter of 1997 and
net income of $7 million in the fourth quarter of 1997.
QUARTERLY FINANCIAL COMPARISONS
First Quarter 1998 Versus First Quarter 1997
Net income of $222 million for the first quarter of 1998 was up
11% from the $200 million earned in the first quarter of 1997.
First quarter 1998 combined trading revenue and trading-related
net interest revenue before the provision for trading-related
credit losses was $450 million, a decrease of $3 million from the
first quarter of 1997. Page 9 shows combined trading results by
organizational unit.
Fiduciary and funds management revenue was $261 million in the
first quarter of 1998, up $26 million from the prior year period.
Funds management and global private banking commissions
contributed to this increase.
5
Corporate finance fees of $331 million increased 54% from the
$215 million earned in the first quarter of 1997, primarily due
to higher underwriting fees, loan syndication fees and merger and
acquisition fees. The current quarter continued to benefit from
the merger with Alex. Brown.
Other fees and commissions of $160 million increased $25 million
from the prior year quarter primarily resulting from higher fees
for brokerage services.
Net revenue from equity investments increased $84 million from
the first quarter of 1997. Gains on direct equity investments
contributed principally to the increase.
Other noninterest revenue totaled $94 million in the current
quarter, compared to $46 million in the first quarter of 1997.
The current quarter included higher revenue from mark-to-market
adjustments on venture capital equity securities.
As compared to the first quarter of 1997, salaries and
commissions expense increased $32 million, or 11%, principally
due to an increase in the average number of employees and higher
annual salaries.
Incentive compensation and employee benefits, the largest
component of noninterest expenses, increased $120 million from
the prior year period, primarily due to the Firm's improved
financial performance, and the cost of employee stock awards
granted in 1997.
Income tax expense amounted to $86 million compared to $93
million in the prior year quarter. The effective tax rate was
28% in the current quarter compared to 32% for the first quarter
of 1997.
First Quarter 1998 versus Fourth Quarter 1997
Net income of $222 million for the first quarter of 1998 was up
7% from the $207 million earned in the fourth quarter of 1997.
First quarter 1998 combined trading revenue and trading-related
net interest revenue before the provision for trading-related
credit losses was $450 million. This was an increase of $232
million from the fourth quarter of 1997.
Fiduciary and funds management revenue was $261 million in the
first quarter of 1998, down $23 million from the fourth quarter
of 1997. The decrease was primarily due to lower client
processing fees due to the sale of the Corporation's defined
contribution recordkeeping and participant services business.
Net revenue from equity investments increased $36 million from
the previous quarter. Gains on direct equity investments
contributed principally to the increase.
Insurance premium revenue decreased $15 million, or 18%, mainly
due to the negative effect of higher local interest rates on the
Chilean annuities market.
6
Other noninterest revenue totaled $94 million in the current
quarter, compared to $82 million in the prior quarter. The
current quarter included higher revenue from mark-to-market
adjustments on venture capital equity securities. The prior
quarter included a gain on the sale of the Corporation's defined
contribution recordkeeping and participant services business.
Total noninterest expenses of $1.325 billion increased by $92
million, or 7%, from the fourth quarter of 1997. Incentive
compensation and employee benefits, the largest component of
noninterest expenses, increased $133 million due to improved
financial performance, higher social security taxes and the cost
of employee stock awards granted in 1997.
CAPITAL
The Corporation adopted the new market risk amendment to the risk-
based capital guidelines issued by the Federal Reserve Board and
the Bank for International Settlements (BIS) in March 1997. The
Corporation estimates that its ratios of Tier 1 Capital and Total
Capital to risk-weighted assets were approximately 8.2% and
14.2%, respectively, as of March 31, 1998.
The remainder of this release contains the following tables:
Page
1. BTNY Condensed Consolidated Quarterly Statement
of Income 8
2. Combined Trading Revenue and Trading-Related Net
Interest Revenue 9
3. Net Interest Revenue 9
4. BTNY Consolidated Balance Sheet 10
5. Stock and Capital Data 11
6. Nonperforming Assets and Allowance for Credit Losses 12
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).
7
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED QUARTERLY STATEMENT OF INCOME
(in millions, except per share data)
(unaudited)
First Fourth First
Quarter Quarter Quarter
1997 1997 1998
REVENUE
Net interest revenue $ 331 $ 373 $ 402
Trading revenue* 311 72 251
Credit loss provision - (20) -
Credit loss provision-trading - - (60)
Fiduciary & funds management 235 284 261
Corporate finance fees 215 324 331
Other fees & commissions 135 167 160
Net revenue from equity investments 47 95 131
Securities available for
sale gains (losses) 14 58 (6)
Insurance premiums 63 84 69
Other 46 82 94
Total revenue 1,397 1,519 1,633
EXPENSES
Salaries and commissions 304 332 336
Incentive compensation &
employee benefits 377 364 497
Agency & other professional service fees 89 95 105
Communication & data services 58 58 54
Occupancy, net 43 49 46
Furniture & equipment 53 61 54
Travel & entertainment 29 41 37
Provision for policyholder benefits 68 102 85
Other 83 131 111
Total expenses 1,104 1,233 1,325
Income before income taxes 293 286 308
Income taxes 93 79 86
NET INCOME $ 200 $ 207 $ 222
NET INCOME APPLICABLE TO COMMON STOCK** $ 186 $ 195 $ 211
Cash dividends declared per common share $1.00 $1.00 $1.00
EARNINGS PER COMMON SHARE:
BASIC $1.86 $1.95 $2.08
DILUTED $1.76 $1.82 $2.01
* The Corporation accounts for revenues from a wide range of
business activities as "trading".
See table on page 9.
** Amounts shown are used to calculate basic earnings per common
share.
Certain prior period amounts have been reclassified to conform
to the current presentation.
8
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.
First Fourth First
Quarter Quarter Quarter
(in millions) 1997 1997 1998
Trading Revenue* $311 $ 72 $251
Trading-Related Net Interest
Revenue (Estimate) 142 146 199
Total Trading Revenue &
Trading-Related NIR $453 $218 $450
By Organizational Unit (in millions)
Investment Banking $120 $ 10 $102
Trading & Sales 147 146 185
Global Institutional Services 1 4 2
Private Client Services Group - 7 5
Australia/New Zealand 46 33 39
Emerging Markets Group:
Latin America 48 13 59
Emerging Europe, Middle East & Africa 30 11 44
Asia 49 (25) 9
Corporate/Other 12 19 5
Total Trading Revenue &
Trading-Related NIR $453 $218 $450
* Before provision for trading-related credit losses.
Note: The Corporation accounts for revenues from a wide range of
business activities as "trading". Investment Banking produces
trading revenue in secondary market activities with clients,
primarily in sectors where the Firm also serves as underwriter.
A small portion of trading revenue arises from private equity
investments that are accounted for on a mark-to-market basis.
Trading & Sales produces trading revenue through proprietary
position-taking, including arbitrage, new derivative transactions
with clients, as well as market making and other client
activities. Australia/New Zealand and Emerging Markets Group
produce trading revenue from all the above business activities.
Corporate/Other includes various transactions which, for
management accounting purposes, are not recorded in
Organizational Units.
NET INTEREST REVENUE
First Fourth First
Quarter Quarter Quarter
($ in millions) 1997 1997 1998
Nontrading-related net interest
revenue(Estimate) $189 $227 $203
Trading-related net interest
revenue (Estimate) 142 146 199
Net interest revenue $331 $373 $402
Average rates (fully taxable basis)
Yield on interest-earning assets 6.99% 7.45% 7.17%
Cost of interest-bearing liabilities 5.93% 6.33% 5.84%
Interest rate spread 1.06% 1.12% 1.33%
Net interest margin 1.40% 1.35% 1.47%
Average balances (billions)
Loans $15.7 $20.4 $21.4
Total interest-earning assets $97.9 $111.4 $113.0
Total assets $125.9 $147.9 $150.5
Total interest-bearing liabilities $92.3 $107.2 $110.3
9
BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
March 31December 31 March 31
1997* 1997 1998*
ASSETS
Cash and due from banks $ 1,679 $ 2,188 $ 1,504
Interest-bearing deposits in banks 2,581 4,272 2,068
Federal funds sold 1,195 1,382 1,630
Sec. purch. under resale agreements 22,316 19,163 22,843
Securities borrowed 14,245 16,751 22,832
Trading assets:
Government securities 11,815 11,397 13,517
Corporate debt securities 8,505 8,128 9,495
Equity securities 7,061 7,914 8,963
Swaps, options & other
derivatives*** 11,032 17,673 14,797
Other trading assets 9,089 11,460 13,991
Total trading assets 47,502 56,572 60,763
Securities available for sale 7,986 8,081 12,493
Loans*** 17,282 19,106 21,178
Customer receivables 1,582 1,547 1,572
Accounts receivable &
accrued interest 3,262 4,785 4,729
Other assets 5,711 6,255 5,925
Total $125,341 $140,102 $157,537
LIABILITIES
Noninterest-bearing deposits
Domestic offices $ 2,803 $ 2,776 $ 2,969
Foreign offices 1,052 1,952 1,624
Interest-bearing deposits
Domestic offices 12,365 22,353 24,180
Foreign offices 19,369 15,749 17,568
Total deposits 35,589 42,830 46,341
Trading liabilities:
Securities sold, not yet purchased
Government securities 3,986 4,389 8,821
Equity securities 4,950 5,273 5,235
Other trading liabilities 443 519 789
Swaps, options & other derivatives 11,177 17,065 14,273
Total trading liabilities 20,556 27,246 29,118
Securities loaned and securities
sold under repurchase agreements 22,576 17,896 21,881
Other short-term borrowings 20,320 19,577 24,868
Accounts payable and
accrued expenses 4,727 6,536 5,875
Other liabilities*** 2,993 4,250 5,819
Long-term debt not included in
risk-based capital 8,164 11,275 12,740
Long-term debt included in
risk-based capital 3,164 3,312 3,306
Trust preferred capital securities** 1,469 1,472 1,473
Total liabilities 119,558 134,394 151,421
PREFERRED STOCK OF SUBSIDIARY - - 304
STOCKHOLDERS' EQUITY
Preferred stock 704 658 658
Common stock 105 105 105
Capital surplus 1,477 1,563 1,592
Retained earnings 4,065 4,202 4,225
Common stock in treasury, at cost (527) (889) (803)
Other stockholders' equity 281 463 458
Accumulated other comprehensive income:
Net unrealized gains (losses)
on securities available for
sale, net of taxes 39 (32) (52)
Foreign currency translation,
net of taxes (361) (362) (371)
Total stockholders' equity 5,783 5,708 5,812
Total $125,341 $140,102 $157,537
* Unaudited
** Mandatorily redeemable capital securities of subsidiary
trusts holding solely junior subordinated deferrable interest
debentures included in risk-based capital
*** See table on page 12 for allocation of the allowance for
credit losses.
Certain prior period amounts have been reclassified to conform to
the current presentation.
10
STOCK AND CAPITAL DATA
First Fourth First
Quarter Quarter Quarter
1997 1997 1998
FOR THE QUARTER
Return on Average Common
Stockholders' Equity 14.7% 14.8% 16.7%
Return on Average Total Assets .64% .56% .60%
PER COMMON SHARE
Earnings:
Basic $1.86 $1.95 $2.08
Diluted $1.76 $1.82 $2.01
Cash Dividends Declared $1.00 $1.00 $1.00
Market Price, End of Period $82.00 $112.44 $120.31
Book Value, End of Period $49.50 $49.06 $49.82
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 104,363 105,379 105,379
Common stock in treasury,
at period end 5,965 8,422 7,522
Average Common and Common Equivalent
Shares Outstanding
Basic 100,540 99,884 101,357
Diluted 107,026 107,285 105,123
CAPITAL RATIOS, END OF PERIOD
Common Stockholders' Equity
to Total Assets 4.1% 3.6% 3.3%
Total Stockholders' Equity
to Total Assets 4.6% 4.1% 3.7%
Bankers Trust New York Corporation:
Risk-Based Capital Ratios (1)
Tier 1 Capital 9.2% 8.3% 8.2%
Total Capital 15.2% 14.1% 14.2%
Leverage Ratio (1) 5.1% 4.4% 4.5%
Bankers Trust Company:
Risk-Based Capital Ratios (1)
Tier 1 Capital 8.6% 9.0% 8.7%
Total Capital 12.1% 12.3% 12.4%
Leverage Ratio (1) 5.4% 5.4% 5.4%
(1) Regulatory capital ratios at March 31, 1998 are preliminary.
All of these ratios have been calculated under the new market
risk amendment to the risk-based capital guidelines.
11
NONPERFORMING ASSETS AND ALLOWANCE FOR CREDIT LOSSES
March 31 December 31 March 31
1997 1997 1998
Nonperforming assets (in millions)
Cash basis loans
Secured by real estate $185 $117 $ 92
Real estate related 25 15 15
Highly leveraged 88 41 25
Other 34 67 115
Total cash basis loans $332 $240 $247
Renegotiated loans-secured
by real estate $37 $25 $25
Other real estate $188 $194 $190
Other nonperforming assets
Derivatives $- $34 $330
Assets acquired in credit workouts 8 4 4
Total other nonperforming assets $8 $38 $334
Total allowance for credit losses (in millions)
Balance, beginning of quarter $973 $972 $997
Net charge-offs (recoveries)
Charge-offs
Loans 33 41 7
Trading assets - - 47
Total charge-offs 33 41 54
Recoveries
Loans 18 46 3
Trading assets - - -
Total recoveries 18 46 3
Total net charge-offs (recoveries) 15 (5) 51
Credit loss provision - 20 -
Credit loss provision-trading - - 60
Total credit loss provision - 20 60
Balance, end of quarter (a) $958 $997 $1,006
(a) Allocation of Allowance for Credit Losses*:
Loans $758 $699 $695
Trading assets 190 285 298
Other liabilities 10 13 13
Balance, end of quarter $958 $997 $1,006
* The Corporation believes that the total allowance for credit
losses is available for credit losses in its entire portfolio,
which is comprised of loans, credit-related commitments,
derivatives and other financial instruments. Due to a
multitude of complex and changing factors that are collectively
weighed in determining the adequacy of the allowance for credit
losses, management expects that the allocation of the total
allowance for credit losses may be adjusted as risk factors change.
12
BANKERS TRUST NEW YORK CORPORATION
130 LIBERTY STREET
NEW YORK, NEW YORK 10006
Ronald Hassen
Senior Vice President
(Acting Principal Accounting Officer)
April 23, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
Accompanying this letter is Bankers Trust New York
Corporation's report on Form 8-K dated April 23, 1998 (the "Form
8-K"). The Form 8-K is being filed electronically through the
EDGAR System.
If there are any questions or comments in connection with
the enclosed filing, please contact the undersigned at 212-250-
4881.
Very truly yours,
BANKERS TRUST NEW YORK CORPORATION
By: /S/ RONALD HASSEN
RONALD HASSEN
Senior Vice President
(Acting Principal Accounting Officer)
<PAGE>
EXHIBIT 99.2
Selected Asian Cross Border Exposures
March 31, 1998*
($ billions) Preliminary
<TABLE>
<CAPTION>
FX/ Tradg Off B/S Total Total
Country Loans Dervs Assets Other** Comm.*** 3/31/98 12/31/97 Change
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Asia $0.5 $2.3 $1.1 $1.0 $0.2 $5.1 $5.9 ($0.8)
(excl. Japan)
Rep. of Korea 0.0 0.6 0.2 0.5 0.1 1.4 1.6 (0.2)
Indonesia 0.1 0.7 0.1 0.0 0.0 1.0 1.3 (0.3)
Thailand 0.0 0.3 0.1 0.1 0.0 0.5 0.6 (0.1)
Total IMF
Countries $0.1 $1.6 $0.4 $0.6 $0.1 $2.8 $3.5 ($0.7)
<FN>
* Preliminary 1Q98 numbers. December 31, 1997 numbers are final.
Numbers may not total due to rounding differences.
Based on FFIEC instructions. Shown by country of ultimate risk.
Excludes local country claims on local residents.
** Other includes acceptances, resales, money market instruments and
securities available for sale.
*** Commitments include L/C's and guarantees.
</TABLE>
<PAGE>
EXHIBIT 99.2
Estimated ROCE by Organizational Unit
($ millions)
Estimated
1Q 98 Net Common Estimated
Income Equity ROCE
Investment Banking $177 $2,342 30%
Trading & Sales 63 801 31
Global Institutional Services 19 282 26
Private Client Services 17 154 44
Australia/NZ 27 236 46
Emerging Markets Group:
Latin America 16 630 10
Emg Europe, Mid East & Africa 7 162 16
Asia (72) 331 N/M
Corporate/Other (32) 196 N/M
Total $222 $5,134 17%
