Printer Friendly

BANKERS TRUST REPORTS FIRST QUARTER RESULTS; INCOME BEFORE ACCOUNTING CHANGES RISES 49 PERCENT

    NEW YORK, April 20 /PRNewswire/ -- Bankers Trust New York Corporation (NYSE: BT) earned $230 million before the cumulative effects of accounting changes for the quarter ended March 31, 1993, up $76 million, or 49 percent, from a restated $154 million for the prior year quarter.  On the same basis, earnings per share were $2.69, up 53 percent from $1.76 a year ago.  The corporation's return on average common equity was 24 percent, also excluding the cumulative effects of accounting changes.
    As previously reported, the corporation adopted Statements of Financial Accounting Standards (SFAS) 106 and 112 effective Jan. 1, 1993.  SFAS 109 has been adopted retroactively to Jan. 1, 1992, resulting in the restatement of the corporation's 1992 earnings.  The effects of these accounting changes are detailed later in this release.
    "The quarter's earnings, which were the second highest in our history, resulted mainly from superior performance by businesses that provide risk management products for clients worldwide and from the firm's diversified proprietary trading businesses," said Charles S. Sanford, Jr., chairman of Bankers Trust.  "The results are evidence of our increasing ability to bring a broader range of risk management services to an expanding base of clients," Mr. Sanford added.
    Net Interest Revenue
    Fully taxable net interest revenue was $315 million, up $92 million, or 41 percent, from the first quarter of 1992.  As was the case in the previous two quarters, the year-to-year increase primarily resulted from substantially higher trading-related net interest generated by debt instruments used in interest rate and currency arbitrage activities. These activities once again benefited from the continued steepness of yield curves around the world.
    Noninterest Revenue
    Total trading revenue of $346 million increased by $130 million, or 60 percent, from the first quarter of 1992 and represented the corporation's highest quarterly result in two years.  These improved results were attributable to sharply higher revenue from several of the firm's proprietary trading activities, including fixed income strategies which benefited from the quarter's falling interest rate environment, and the trading of LDC assets.  These results also included continued strong performance from providing financial risk management services to clients, primarily in the form of interest rate and currency derivative products.
    Fiduciary and funds management revenue of $159 million for the first quarter was down $3 million from the same period last year.  Lower performance-based revenue from foreign exchange funds management for clients was mostly offset by increased revenue from the Corporation's private banking and fiduciary activities.
    Fees and commissions of $147 million increased by $5 million from the first quarter of 1992.  Corporate finance fees of $78 million, included therein, increased by $2 million, as higher revenue from securities underwriting activities was mostly offset by modestly lower fees in several other corporate finance categories.
    Other noninterest revenue totaled $78 million, up $15 million from the prior year quarter.  Driving this increase were a {$17 million increase in net revenue from equity investments, including a $16 million gain in the 1993 first quarter on the sale of the corporation's minority interest in A.F.P. Provida S.A., a Chilean pension fund administrator, and a $17 million increase in insurance premium revenue, reflecting increased sales of both single-premium annuities and term life and disability policies by Consorcio, the corporation's Chilean insurance subsidiary.  Partially offsetting these factors were losses from the revaluation of non-trading foreign currency positions in the 1993 first quarter (a major portion of which related to hyperinflationary countries), versus a modest gain in the prior year, as well as lower equity in income of unconsolidated affiliates.
    Noninterest Expenses
    Total noninterest expenses of $681 million increased by $146 million, or 27 percent, from the first quarter of 1992.  This increase was due primarily to higher incentive compensation, in line with the improved results.
    Personnel related expenses increased 36 percent from the year earlier period, to $436 million.  Salaries expense increased $14 million, or 9 percent, mostly due to a 7 percent increase in the average number of employees.  Incentive compensation and employee benefits expense increased $102 million, or 60 percent, reflecting the higher incentive compensation.
    Non-personnel related expenses totaled $245 million for the quarter, up $30 million, or 14 percent, from last year's first quarter.  A $20 million increase in the provision for policyholder benefits, related to the higher level of activity at Consorcio, accounted for the largest portion of this increase.
    Asset Quality
    The provision for credit losses for the quarter was $30 million, compared with $55 million in the prior year's first quarter.  Net charge-offs for the quarter were $121 million.  This total included a charge-off of $66 million which resulted from the sale of Mexican government Par Bonds, as well as $17 million of loans to highly leveraged borrowers and $7 million of real estate loans.  Net charge- offs for the first quarter of 1992 were $55 million.
    Total nonperforming assets declined by $166 million, or 7 percent, to $2.290 billion during the first quarter, primarily due to the sale of Mexican Par Bonds, while total cash basis loans were virtually unchanged, at $1.372 billion.  The allowance for credit losses at March 31, 1993 was $1.529 billion, representing 111 percent of total cash basis loans.
    Income Taxes
    The effective tax rate for the current quarter was 29 percent, compared with a restated effective rate of 27 percent for the first quarter of 1992.
    Capital
    Common stockholders' equity of $3.694 billion at March 31, 1993, was up $73 million from the restated total of $3.621 billion at Dec. 31, 1992, primarily due to the retention of earnings.  The preferred stock component of total stockholders' equity decreased by $187 million during the quarter as the result of the corporation's redemption of its Money Market Cumulative Preferred Stock, Series F, G and H.  The $63 million of outstanding Series E preferred stock was subsequently redeemed on April 12.
    BT Overseas Finance N.V., an indirect, wholly-owned subsidiary, issued $250 million of its own auction rate cumulative preferred stock to third-party investors during the first quarter of 1993.  Although not a component of consolidated stockholders' equity, this $250 million is an addition to the corporation's Tier 2 Capital for regulatory capital purposes.
    The corporation estimated that its ratios of Tier 1 Capital and Total Capital to risk-adjusted assets were approximately 7.70 percent and 13.60 percent, respectively, at March 31, 1993.  The Leverage Ratio was 6.24 percent at that same date.
    Effects of Accounting Changes
    The corporation has adopted the new accounting standards for income taxes (SFAS 109), postretirement benefits other than pensions (SFAS 106) and postemployment benefits (SFAS 112).  As previously reported, in adopting prospectively SFAS 106 and SFAS 112 the Corporation recorded charges of $100 million and $7 million, respectively, (or $70 million and $5 million, respectively, net of income taxes) in the first quarter of 1993 for the cumulative effects of these changes in accounting principles.  The Corporation has adopted SFAS 109 retroactively to Jan. 1, 1992, resulting in a $324 million upward restatement of earnings for the full year 1992.  This amount consisted of a $446 million credit recorded as the cumulative effect of this accounting change and a $122 million increase in income taxes.  The effect of restating earnings for the first quarter of 1992 for the adoption of SFAS 109 was to increase previously reported net income by $425 million, which amount consisted of the $446 million cumulative effect credit and a $21 million increase in income taxes.
    The attached table contains 1992 quarterly and full year results and financial statistics restated for the adoption of SFAS 109.
             BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
             1992 CONSOLIDATED RESULTS AND FINANCIAL STATISTICS
                    RESTATED FOR THE ADOPTION OF SFAS 109
                  ($ in millions, except per share amounts)
                                 (unaudited)
                                             1992
                                 First   Second  Third   Fourth    Full
                                  Qtr.    Qtr.    Qtr.    Qtr.     Year
    Income before income taxes
     and cumulative effect of
     accounting change            $212    $266    $241    $187   $  906
    Income taxes                    58      80      75      54      267
    Income before cumulative
     effect of accounting change   154     186     166     133      639
    Cumulative effect of accounting
     change for income taxes       446      --      --      --      446
    Net income (after cumulative
     effect)                      $600    $186    $166    $133   $1,085
    Per common share:
     Income before cumulative
      effect of accounting chng. $1.76   $2.16   $1.90   $1.52   $ 7.35
     Cumulative effect of
      accounting change
      for income taxes            5.39      --      --      --     5.38
     Net income (after
      cumulative effect)         $7.15   $2.16   $1.90   $1.52   $12.73
    Book value (A)              $40.78  $42.66  $43.51  $43.23
    Profitability ratios (pct):
     Return on average common
      stockholders' equity
      Including cumulative effect
       of accounting change        N/M   20.43   17.28   13.58      N/M
      Excluding cumulative effect
       of accounting change      19.81                            19.52
     Return on average total
      stockholders' equity
      Including cumulative effect
       of accounting change        N/M   18.59   15.96   12.62      N/M
      Excluding cumulative effect
       of accounting change      17.88                            17.65
     Return on average total assets
      Including cumulative effect
       of accounting change        N/M     .98     .83     .71      N/M
      Excluding cumulative effect
       of accounting change        .91                              .86
    Average balances:
     Total assets              $68,831 $76,237 $79,149 $74,508  $74,694
     Com. stockholders' equity  $3,410  $3,524  $3,638  $3,691   $3,566
     Total stockholders'equity  $3,910  $4,024  $4,138  $4,191   $4,066
    At end of period:
     Total assets              $65,076 $      equity to total assets      5.26
  4.77    4.92    4.97
     Total stockholders'
      equity to total assets      6.02    5.44    5.59    5.65
    N/M -- Not meaningful.
    (A) -- This calculation includes common shares issuable under deferred stock awards.
             BANKERS TRUST NEW YORK CORPORATION AND SUBSIDIARIES
                            FINANCIAL STATISTICS
                    ($ in millions, except per share data)
                                 (unaudited)
                                                                 Fourth
                                              First Quarter      Quarter
                                              1993      1992      1992
    Income before cumulative effects
     of accounting changes                    $230      $154      $133
    Cumulative effects of accounting changes   (75)      446        --
    Net income (after cumulative effects)     $155      $600      $133
    Per common share:
     Income before cumulative effects
      of accounting changes                  $2.69     $1.76     $1.52
     Cumulative effects of accounting changes (.91)     5.39        --
     Net income (after cumulative effects)   $1.78     $7.15     $1.52
    Cash dividends declared                   $.78      $.70      $.78
    Book value (A)                          $43.85    $40.78    $43.23
    Profitability ratios (pct):
     Return on average common stockholders'
      equity
      Including cumulative effects of
       accounting changes                      N/M       N/M     13.58
      Excluding cumulative effects of
       accounting changes                    24.28     19.81
     Return on average total assets
      Including cumulative effects of
       accounting changes                      N/M       N/M       .71
      Excluding cumulative effects of
       accounting changes                     1.18       .91
    Net interest revenue (fully taxable
     basis)                                   $315      $223      $412
    Aver. rates (fully taxable basis) (pct):
     Yield on interest-earning assets         5.89      6.85      6.55
     Cost of interest-bearing liabilities     4.51      5.83      4.66
     Interest rate spread                     1.38      1.02      1.89
     Net interest margin                      1.79      1.51      2.43
    Average balances:
     Loans                                 $16,278   $17,115   $17,023
     Total interest-earning assets         $71,322   $59,433   $67,463
     Total assets                          $79,266   $68,831   $74,508
     Total interest-bearing liabilities    $64,802   $54,399   $59,633
     Common stockholders' equity            $3,650    $3,410    $3,691
     Total stockholders' equity             $4,100    $3,910    $4,191
    At end of period (pct):
     Common stockholders' equity to
      total assets                            4.65      5.26      4.97
     Total stockholders' equity to
      total assets                            5.04      6.02      5.65
    Risk-based capital ratios (B)
     (1992 year-end guidelines) (pct):
        Tier 1 Capital                        7.70      6.52      7.75
        Total Capital                        13.60     11.75     13.64
    Leverage ratio (B) (pct)                  6.24      5.42      6.05
    Employees                               13,153    12,171    12,917
    NONPERFORMING ASSETS AT END OF PERIOD
    Cash basis loans
      Secured by real estate                $  519    $  538    $  497
      Real estate related                       60        98        83
      Highly leveraged                         380       511       430
      Other nonrefinancing country             193       214       146
      Refinancing country                      220       274       221
         Total cash basis loans             $1,372    $1,635    $1,377
    Renegotiated loans
      Mexican government Par Bonds            $461      $611      $611
      Venezuelan government Par Bonds           --       130        --
      Other                                     41        30        48
         Total renegotiated loans             $502      $771      $659
    Other nonperforming assets
      Other real estate                       $312      $290      $315
      Other assets                             104        67       105
         Total other nonperforming assets     $416      $357      $420
    ALLOWANCE FOR CREDIT LOSSES
    Balance, beginning of period            $1,620    $1,806    $1,652
    Net charge-offs
      Charge-offs                              130        71        87
      Recoveries                                 9        16         5
        Total net charge-offs (C)              121        55        82
    Losses on sales and swaps of
     refinancing country loans                  --        47        --
        Total net charges to the allowance     121       102        82
    Provision for credit losses                 30        55        50
    Balance, end of period                  $1,529    $1,759    $1,620
    (C) -- Components:
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 20, 1993
Words:2089
Previous Article:BACHMAN AND NETRON SIGN WORLDWIDE JOINT MARKETING AND TECHNOLOGY AGREEMENT
Next Article:SUPREME COURT DECISION ALLOWS DEDUCTIONS OF INTANGIBLE ASSETS ACQUIRED IN TAKEOVER, COOPERS & LYBRAND SAYS
Topics:


Related Articles
FOURTH FINANCIAL CORPORATION REPORTS RECORD FIRST QUARTER OPERATING EARNINGS
CULLEN/FROST REPORTS FIRST QUARTER EARNINGS
PARK NATIONAL CORPORATION, NEWARK, OHIO REPORTS SECOND QUARTER, 1993 EARNINGS
BANKERS TRUST EARNINGS RISE 87 PERCENT TO RECORD $310 MILLION
/FIRST AND FINAL ADD -- NY003 -- BANKERS TRUST NEW YORK EARNINGS/
FIRST BANK SYSTEM REPORTS THIRD QUARTER 1994 EARNINGS
BANKERS TRUST REPORTS THIRD QUARTER NET INCOME OF $169 MILLION, OR $1.98 PER SHARE; RETURN ON EQUITY WAS 15%
CULLEN/FROST REPORTS FIRST QUARTER EARNINGS
BANKERS TRUST SECOND QUARTER EARNINGS RISE TO $151 MILLION, OR $1.67 EARNINGS PER SHARE
Cullen/Frost Reports First Quarter Results

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