Printer Friendly


 NEW YORK, Jan. 27 /PRNewswire/ -- Bankers Trust New York Corporation

(NYSE: BT) today announced it earned $137 million for the quarter ended Dec. 31, 1991, up 11 percent from the $123 million earned in last year's fourth quarter. On a per share basis, earnings were $1.57 for the quarter, as compared to $1.40 a year ago. The corporation's return on average common equity for the fourth quarter was 18 percent.
 Net income for the full year 1991 was $667 million, compared with $665 million a year earlier. Earnings per share were $7.75, compared to $7.80. The corporation's return on average common equity for 1991 was 23 percent.
 "Despite the recession, we had record earnings in 1991," said Chairman Charles S. Sanford Jr. "The 23 percent return on common equity for the year once again exceeded Bankers Trust's 20 percent target; in fact, ROE has averaged 25 percent over the last eight quarters," he continued. Sanford also noted the following 1991 accomplishments:
 -- a 4.5 percent increase in total revenue, which reflected record total trading revenue of $1.2 billion, continued strong growth in fiduciary and funds management revenue and a midyear turnaround in corporate finance fees;
 -- an improved expense profile as reflected in the 3.6 percent increase in noninterest expenses and 9 percent reduction in total staff; and
 -- a strengthened financial profile as evidenced by further increases in both the risk-based capital ratios and the reserve coverage for nonrefinancing country cash basis loans.
 An analysis of fourth quarter results follows.
 Noninterest Revenue
 Total trading revenue of $207 million decreased by 9 percent from last year's fourth quarter. While revenue from many of the corporation's proprietary trading and client-driven products remained strong, most notably the trading of interest rate instruments and the marketing of interest rate derivative products, these improvements were offset by lower revenue from the trading of foreign currencies and LDC debt.
 Fiduciary and funds management revenue was $139 million for the three months ended Dec. 31, 1991, up 13 percent from the same period last year. While growth in the corporation's foreign exchange funds management activities was the largest contributor to this increase, higher revenue was also achieved by most business lines within this category.
 Fourth quarter fees and commissions were $135 million, including $68 million of corporate finance fees. Higher fees from securities underwriting, primarily high yield debt, and financial advisory activities resulted in a $12 million increase in corporate finance fees from the fourth quarter of 1990. The totals for both fees and commissions and its corporate finance component represented the third consecutive quarterly increase reported by the corporation.
 The fourth quarter investment securities gains of $20 million were primarily recorded by the corporation's Chilean insurance subsidiary. The periodic sale of investment account securities is a customary life insurance industry practice.
 Other noninterest revenue of $70 million increased $15 million from the fourth quarter of 1990. This increase was due principally to higher net revenue from equity investment transactions, offset in part by a lower level of equity in income of unconsolidated affiliates.
 Net Interest Revenue
 Fully taxable net interest revenue of $177 million decreased by $16 million, or 8 percent, from the fourth quarter of 1990 and was virtually unchanged from the prior quarter. The decrease was due primarily to a lower contribution from earning assets financed by noninterest-bearing funds, which lower contribution resulted from an increase in noninterest-earning trading account assets and a lower interest rate environment. Partially offsetting these factors was a higher interest rate spread. Brazilian interest receipts recognized in income were immaterial in the fourth quarter of both years.
 Noninterest Expenses
 Total noninterest expenses decreased by $17 million, or 3 percent, from the fourth quarter of 1990.
 Salaries expense decreased 4 percent from the year earlier period, reflective of the corporation's worldwide cost reduction efforts, which have resulted in a 9 percent decline in total staff since year end 1990. The $14 million decrease in incentive compensation and employee benefits expense resulted primarily from lower severance costs and a decline in pension expense. Higher incentive compensation, reflecting the 36 percent increase in pretax income, partially offset these declines.
 Non-personnel related expenses totaled $250 million for the fourth quarter, up 1 percent from the prior year quarter. During the three months ended Dec. 31, 1991, the corporation recorded a $12 million charge related to the future cost of leased premises no longer occupied as the result of staff reductions and office consolidations.
 Provision for Credit Losses; Charge-offs
 The provision for credit losses for the quarter was $75 million, compared to $73 million in the prior year's fourth quarter. Total net charge-offs for the quarter were $68 million, which consisted of $77 million of nonrefinancing country net charge-offs and net recoveries of $9 million on refinancing country loans. The former amount included $19 million of real estate loans and $9 million of loans to highly leveraged borrowers. Virtually all of the $49 million in the "other" category was attributable to companies in the media industry.
 Asset Quality
 Nonrefinancing country cash basis loans decreased by $10 million in the fourth quarter, to $1.471 billion. The portion of such loans attributable to real estate decreased by $53 million, due in part to transfers to other real estate, while cash basis loans to highly leveraged borrowers increased by $32 million during the quarter. Other real estate increased by $76 million during the fourth quarter.
 The allowance for credit losses at Dec. 31, 1991, was $1.806 billion, representing 10.6 percent of total loans. While the entire amount is available to absorb any credit losses which may occur, the corporation's credit loss allowance at Dec. 31, 1991, could be viewed as containing reserves of $1.547 billion for nonrefinancing country loans, representing approximately 9.4 percent of such loans, or 105 percent of those loans on a cash basis, and $259 million for refinancing country loans. Effective Dec. 31, 1991, the corporation no longer classifies its Mexican outstandings (including the Mexican government bonds received as part of that country's Brady Plan restructuring) as refinancing country outstandings. Total loans to Mexican borrowers were $718 million at year end 1991. This amount excluded the current market value of U.S. Treasury securities collateralizing the Brady bonds portion thereof.
 At Dec. 31, 1991, the corporation's coverage of its medium- and long-term refinancing country loans was approximately 73 percent, while the coverage of total refinancing country loans was approximately 72 percent.
 Preliminary Coverage Ratios: Refinancing Country Loans
 at Dec. 31, 1991 ($ in millions)
 and Long- Total
 Term Loans Loans
 Book value $ 606 $ 623
 Less: collateral (A) 28 28
 Adjusted book value 578 595
 Cumulative charge-offs (B) 605 605
 Adjusted total face amount $1,183 $1,200
 Cumulative charge-offs (B) $ 605 $ 605
 Allowance for credit losses 259 259
 Total coverage applicable to adjusted
 total face amount $ 864 $ 864
 Coverage ratio 73 pct 72 pct
 (A) -- Consists of U.S. Treasury securities at current market value.
 (B) -- Includes interest receipts credited to principal.
 Income Taxes
 Income tax expense of $19 million in the current quarter included $23 million of previously unrecognized federal tax benefits, compared to $29 million of such benefits recognized in the fourth quarter of 1990.
 Total stockholders' equity of $3.412 billion at Dec. 31, 1991, was up $388 million from Dec. 31, 1990, primarily due to the retention of earnings. The corporation estimated that its ratios of Tier 1 capital and total capital to risk-adjusted assets under the Federal Reserve's year-end 1992 guidelines were approximately 6.1 percent and 10.9 percent, respectively, at Dec. 31, 1991, and that its leverage ratio approximated 5.2 percent at that same date.
 -0- 1/27/92 R
 /CONTACT: Thomas A. Parisi (media), 212-454-1686, or Kenneth A. Brause (investors), 212-454-1120/
 (BT) CO: Bankers Trust New York Corporation ST: New York IN: FIN SU: ERN

GK -- NY035R -- 3652 01/27/92 10:45 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jan 27, 1992

Related Articles
Harris Bank Announces Fourth Quarter Earnings
Bankers Trust Earns $1.89 Per Share in the First Quarter of 1997, Up 24 Percent from the 1996 First Quarter Earnings Per Share of $1.52
Cullen/Frost Reports Annual Earnings.
Cullen/Frost Reports First Quarter Results.
Cullen/Frost Reports Annual Earnings.
AMCORE Financial, Inc. Reports Record Earnings For 4th Quarter and Full-Year 1999.
Cullen/Frost Reports First Quarter Results.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters