the company assured analysts that the bank's transition to new leadership would entail no major strategic changes - and that the dividend is probably safe. For weeks, Bankers Trust's stock has been buffeted by rumors that its new chief executive, Frank Newman, would cut the $4 dividend and push the bank into lower-margin businesses following its widely publicized problems this year in derivatives trading. But the shares soared $2.625 to $65.25 after a joint appearance before analysts Tuesday evening by Mr. Newman and his predecessor, Charles Sanford, in an effort to dispel the crisis atmosphere that has surrounded the company. This is a "gradual fix" process, said James Rosenberg, a money-center analyst with Lehman Brothers. Mr. Newman conveyed the sense that there would be no earth-shattering announcements in the coming months, he said. "Frank Newman has a glow," Mr. Rosenberg added. "His integrity and track record are reassuring." Certainly, in holding what one attendee called a "warm and fuzzy" session with the analysts, Mr. Newman was demonstrating a change in attitude that many analysts will welcome. In the past, analysts have frequently complained that Bankers Trust was unresponsive to requests for information. James Hanbury, of Schroder Wertheim & Co., who after the meeting issued a report titled, "Evolution, not revolution at Bankers Trust," noted that Mr. Newman spoke favorably about Bankers Trust's current business mix. "The new CEO was noncommittal (on the dividend) except to say that Bankers Trust's capital was more than adequate and that the fact that the company did not earn the dividend in any one quarter should not control the decision," Mr. Hanbury said. "For what it's worth, we came away from the meeting with the feeling that the dividend would be maintained." Mr. Newman said he was more concerned with the bank's capital reserves, which he described as excellent, than with a quarter's earnings, analysts said. This is critical because analysts have questioned how the bank would meet dividend obligations when earnings were insufficient. This year, Bankers Trust is expected to earn less than it will pay out in dividends, largely because of $125 million loss in the first quarter related to derivatives trading. Mr. Newman told analysts not to look for strong earnings in the coming quarters. As a result, Mr. Rosenberg hinted he may cut his earnings estimate of $6.75 per share in 1996, which already is 22 cents lower than the Wall Street consensus. Nonetheless, Bankers stock rose 4.2%, recovering a good chunk of the 16% it lost during the past two months. Scott Edgar, a bank analyst with SIFE Trust Fund, said his company sold nearly all of its 100,000-share position in Bankers, but that after Tuesday's meeting, the fund was considering reestablishing a larger position. Mr. Newman most recently was the deputy secretary of the Treasury, and previously he was chief financial officer at BankAmerica Corp from 1986 to 1992. One of his first actions upon arrival at the then-troubled BankAmerica was to eliminate the dividend, Mr. Edgar pointed out. Bankers Trust's board of directors is scheduled to meet Dec. 19 to make a decision on the dividend. Some analysts, including Mr. Rosenberg, are still not certain the dividend is safe. He estimates there is a 40% chance the dividend will be cut, down from the 50% likelihood he gave a cut before the meeting. And Arthur Soter of Morgan Stanley said Bankers Trust officials were vague when discussing the dividend, leaving the door open for a change. The bank could cut the dividend, but then implement a share buyback program, he said. Elsewhere Wednesday, Standard & Poor's announced it would add Comerica Inc. to its index of 500 companies, replacing Shawmut National Corp., which is being bought by Fleet Financial Group. Shares of Comerica rose $2 to $37.25. When a company is added to a major stock index, program traders buy the shares so their funds can own the new stock. Shares of First Empire State Corp. rose $5.75 to $205 after the company announced it would buy back 6% of its 6.4 million common shares outstanding. Also, Lehman Brothers analyst Michael Mayo predicted BankAmerica and NationsBank Corp. would merge within the next six months. A merger of the two superregionals, which has been rumored since the summer, would create the nation's largest bank and the first truly national one. The deal has been reportedly hung up on social issues, including where the new company would be headquartered and which bank's chief executive would retain the top spot. Shares of NationsBank finished up 37.5 cents at $64.125, while BankAmerica shares fell 75 cents to $64.125. The S&P index of major banks rose 0.13%. The overall S&P rose 0.20%.
