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BT posts dismal 3Q
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October 22, 1998: 9:08 a.m. ET
Bankers Trust misses mark by $1.28; reduces emerging market risk, costs
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NEW YORK (CNNfn) - After reporting a much higher-than-expected third-quarter loss, Bankers Trust Corp. said Thursday it already has set the wheels in motion to reduce risk exposure in emerging markets and cut costs by $300 million a year.
Bankers Trust reported a net loss of $488 million, or $4.98 per share, for the three months ended Sept. 30. That compares with earnings of $246 million, or $2.19 per share, a year ago.
Analysts expected the bank to lose $3.70 per share, according to First Call consensus estimates.
Bankers Trust, also told gun-shy investors its exposure to hedge funds stood at $834 million as of Sept. 30.
According to the bank, all collateral calls under those agreements have been met.
"This quarter's disappointing net loss occurred during one of the most severe global market dislocations in the post-World War II period," Chairman and Chief Executive Frank Newman said. "Equity markets declined, risk premiums in debt markets widened, and investment banking activity slowed markedly. Bankers Trust sustained significant losses in emerging market debt, high-yield debt and in our equity holdings."
Total revenue fell to $471 million from $1.77 billion and trading and securities losses reached $409 million.
The losses are mainly due to charges for reducing Bankers Trust's exposure to Russian Federation securities and a $110 million provision for credit losses as a result of emerging market uncertainties, primarily Asia.
For the nine months, Bankers Trust posted a net loss of $102 million, or $1.28 per diluted share. That compares with net income of $659 million, or $5.85 per share, in the year-ago period.
To position itself for future growth, Bankers Trust said is reducing its cross-border exposure to 4 percent from 8 percent.
It also is consolidating its emerging market activities, which previously operated as a separate unit, into its larger core business.
Bankers Trust (BT) shares finished up 1-3/16 at 60-1/8 Wednesday on the New York Stock Exchange, down significantly from their 52-week high of around $136 per share in May.
(Click here for a chart of BT's stock activity) 
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Bankers Trust
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