Bankers Trust New York Corp.'s decision to seek a buyer for its $34 billion-asset retirement services business won plaudits from Wall Street analysts Wednesday.

The analysts said the bank's business of providing 401(k) plans and record-keeping services to 137 large corporate clients has been a money loser in recent years.

David Berry, research director at Keefe, Bruyette & Woods, estimated the drag on earnings at about 10 cents a share. He has been expecting third- quarter earnings of about $1.90 per share.

Other observers said the potential sale, which could fetch several hundred million dollars, is an encouraging sign that the bank remains focused on shedding or retooling underperforming businesses.

"They are clearly looking at unprofitable businesses to see what can be done about them," said Raphael Soifer, bank analyst at Brown Brothers Harriman & Co.

In mapping an exit from the retirement services business, Bankers Trust is taking the opposite approach from many other large financial services companies. With baby boomers stockpiling retirement assets, the 401(k) business has been touted as a growth area for decades to come.

Bankers Trust declined to comment on rumors of a pending sale, which were reported Wednesday by The Wall Street Journal. But several well-placed sources confirmed that a book outlining the business is being circulated among prospective buyers and that the company appears committed to the project.

"You look at the business and you see that it might be worth a lot more to some other company," said a source who is familiar with the bank's discussions.

Bankers Trust has found it hard to compete because it specializes in low-margin indexed funds, Mr. Berry said. Investment management fees from this business are too low to offset the high cost of communicating with millions of plan participants and maintaining account records for them, he said.

"The big players like Fidelity (Investments) give the record keeping services away hoping to get a bigger share of assets in their actively managed funds," said Mr. Berry. "Bankers Trust doesn't have that choice."

Although Bankers Trust was one of the earliest entrants in the 401(k) business, its decision to sell surprised few observers.

"That business either has to be built up through investments or sold," said Robert Albertson, an analyst at Goldman Sachs & Co. "They may have the view that it's too late" to do anything but sell.

Four years ago, Bankers Trust unveiled a highly publicized alliance with Charles Schwab Corp. that gave bank clients access to nearly 200 no-load mutual funds. The alliance is still in effect, but observers said it has not produced much business.

Bankers Trust does boasts some large retirement plan clients-such as Lockheed Martin in Bethesda, Md. But plan sponsors tend to hire Bankers Trust for specific services rather than for a complete package of services, sources said.

"These big companies want a lot of services," said Gary Blank, an independent consultant in San Francisco. Bankers Trust "probably did a cost-benefit analysis and decided that they just couldn't compete."

Bankers Trust was also late to introduce daily valuation services, increasingly seen as a vital feature of 401(k) plans.

The result was a lot of customer dissatisfaction, said John Mulligan, a consultant at Retirement Plan Strategies in Braintree, Mass. "They have stemmed the tide a bit," he said, "but you never hear about them getting a new client."

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