Bankers Trust New York Corp. said its second-quarter profits plunged 30%, reflecting rocky trading conditions.

The nation's seventh-largest banking company said it earned $181 million, or $2.09 a share - well below analysts' expectations.

Trading revenue fell 54%, to $245 million, from the second quarter of 1993 but was up 28% from this year's first quarter. Bankers Trust attributed the weak results to rising interest rates and volatility in European and U.S. markets.

Greater Reliance on Swaps

Bankers Trust has relied more heavily than most other big banks on income from trading and from derivatives activities. (See related story, back page.)

"Bankers Trust has been successful by being incredibly focused," said Merrill Lynch & Co.'s Judah Kraushaar. But in adverse circumstances, "it doesn't have other, more diverse revenue streams to stabilize its earnings."

"The inability of the company to stage a material bounce-back in trading is disconcerting," Mr. Kraushaar added.

Analysts said Bankers Trust had suffered from a market shift away from complex derivatives toward "plain vanilla" products. Chemical Banking Corp., in earnings reported early last week, benefited from that shift, showing the smallest decline in trading revenue of all the big New York banks.

Controversial Reticence

Analysts criticized Bankers Trust for declining to quantify how much it received for refinancing of Brazilian debt that occurred in the quarter.

Bankers Trust said that sales of Brady bonds and Brazilian past-due-interest bonds "had a significant positive impact" on trading revenue and net interest income for the second quarter.

"I'm hoping Bankers will reverse itself," said George Salem, banking analyst at Prudential Securities. The number "influences the whole earnings - it goes into the trading account, which is the most controversial area about Bankers Trust."

Share Declines

Bankers Trust chief financial officer Tim Yates said second-quarter derivatives revenues fell 30% from the first quarter and income from client financial-risk management, mostly derivatives, fell in the second quarter to $50 million, from $114 million in the first quarter.

Total noninterest expenses of $688 million decreased by $61 million. Much of the decrease was due to lower bonuses and employee benefits, which declined by 35%, or $111 million.

Fiduciary and funds management revenue was up 6%, to $187 million, largely because of higher levels of global private banking assets under management. Fees and commissions were up 13%, to $195 million.

[Tabular Data Omitted]

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