Bankers Trust earnings up 13% in 4th quarter Figure beats xTC estimates for purchaser of Alex. Brown Inc.

Banking

January 23, 1998|By BLOOMBERG NEWS

NEW YORK -- Bankers Trust New York Corp. said yesterday that fourth-quarter earnings rose 13 percent, beating estimates, as net income from loans and investment banking outpaced a decline in trading.

The nation's seventh-largest bank said net income rose to $207 million, or $1.82 a diluted share, from $184 million, or $1.59, in the same period last year. Analysts had expected the bank to earn $1.72 a diluted share.

"These are much stronger numbers than we've seen at other banks with Asian exposure," said Lawrence Cohn, a bank analyst at Ryan, Beck & Co. who has a "strong buy" rating on the stock.

Bankers Trust took $41 million in charges in the fourth quarter, $21 million of which were related to its Asian dealings.

"Nothing bad happened to asset quality, which is a big contrast to J. P. Morgan's results," said David Berry, director of research at Keefe, Bruyette & Woods.

Bankers Trust said total trading revenue and trading-related net interest revenue fell 38 percent to $218 million.

The bank also lost $41 million in the quarter in its risk management area, compared with a gain of $3 million in the same period last year. The bank attributed the loss to declines in equity derivatives.

The bank's net interest revenue rose 30 percent, to $373 million, driven in part by an increase in the net interest margin -- the difference between what a bank charges on loans and what it pays for funds. The net interest margin rose to 1.36 percent, from 1.16 percent in the same period last year.

The bank boosted its average loan balances 33 percent to $20.4 billion.

Net income from investment banking surged 77 percent to $147 million. Revenue from corporate finance fees increased 20 percent to $324 million.

Bankers Trust completed its $2.7 billion purchase of Alex. Brown Inc., a Baltimore-based securities firm, Sept. 1, as it expands its equity underwriting services for growing or restructuring companies.

The current quarter includes after-tax gains of $41 million on the sale of the company's defined contribution record keeping, and a $27 million after-tax charge from expenses associated with relocating some Asian operations.

U.S. companies now report per-share earnings two ways: diluted, which reflects options, warrants and other securities convertible into common stock; and basic, which does not reflect them. Bankers Trust's basic earnings rose to $1.95 a share from $1.69 in the same period a year ago.

Net income for 1997 rose 13 percent to $866 million, or $7.66 a diluted share, from $766 million, or $6.76 a diluted share in 1996.

Bankers Trust did not break out earnings figures for what is now called BT Alex. Brown.

The company's shares rose $2.625 yesterday to $105.

Pub Date: 1/23/98

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