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Salomon 150 Million Pound Sterling Notes Rated 'BBB+' By Fitch -- Fitch Financial Wire --

NEW YORK, Nov. 25 /PRNewswire/ -- Salomon Inc.'s (NYSE: SB) (Salomon) 150 million pound sterling floating rate notes due Nov. 26, 2001 are rated 'BBB+' by Fitch Investors Service. The rating reflects the company's liquid balance sheet, improved earnings and renewed commitment to tighter risk management and internal controls. The outlook is positive.

Salomon has reduced its risk profile since 1994, when the company incurred a net loss of $399 million, primarily as a result of proprietary trading losses and a pre-tax charge of $303 million for unreconciled accounting balances. In fiscal 1995 the company earned $457 million, while earnings for the first nine months of 1996 totaled $679 million. This resurgent performance validates the strength and breadth of Salomon's franchise despite earlier high turnover and reputational issues. Nevertheless, earnings remain relatively more dependent on potentially volatile, proprietary trading revenue as compared with its peers. In the third quarter of 1996 Salomon earned $112 million, down from prior quarters due to certain proprietary trading positions. Ultimately, any improvement in Salomon's rating will depend on the company's ability to demonstrate consistent, increased profitability from recurring, client-driven businesses and continued strengthening of its franchise.

The company's balance sheet maintains its historically strong liquidity by virtue of its high quality trading inventory, which is carried at fair market values. Strong balance sheet liquidity is further supported by approximately $3.1 billion of committed secured bank facilities available to finance its securities inventory. Total equity at June 30, 1996 was $5.7 billion (including $560 million of redeemable preferred shares, $450 million of perpetual preferred shares and $345 million of guaranteed preferred beneficial interests in subordinated debt) and total long-term capitalization was $18.7 billion. Adjusted leverage (assets less reverse repurchase agreements and securities borrowed) at June 30, 1996 was 22.7 times (x), which is higher than its peer group but appropriate given the company's asset quality and liquidity.

SOURCE Fitch Investors Services
 -0- 11/25/96


/CONTACT: Roger W. Merritt, CPA, 212-908-0636, Gregory T. Siegel, CPA, 212-908-0622, or Nancy E. Stroker, CFA 212-908-1533, all of Fitch/

(SB)

CO: Salomon Inc. ST: IN: FIN MNG SU: RTG

KS -- NYM121 -- 3826 11/25/96 14:09 EST http://www.prnewswire.com
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Date:Nov 25, 1996
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