Estimating earnings of money-center banks gets tougher all the time, according to Norman Jaffe, the leading forecaster among Wall Street analysts for these companies.

"More and more, the earnings are market-driven" by these banks' deep involvement in global trading activities, said Mr. Jaffe, director of U.S. research and senior bank analyst at Fox-Pitt, Kelton Inc.

Mr. Jaffe was the best prognosticator of money-center results in the American Banker's survey of sell-side bank equity analysts, prepared by Zacks Investment Research.

Arriving at estimates - quarterly and yearly - involves a large amount of input from colleagues, clients and the banks themselves, the analyst noted last week in his New York office.

"Calculating the money-center earnings is difficult, and getting steadily more so, with trading income and nonrecurring items," Mr. Jaffe said.

Divining earnings in advance for J.P. Morgan & Co. and Bankers Trust New York Corp., the two U.S. banks that have moved farthest into the overall realm of trading, is especially challenging.

How much do the banks help? "They do offer guidance, but especially in the capital markets area they may not know for sure themselves how a quarter looks, and they don't want to offer misleading impressions," he said.

Typically, Mr. Jaffe touches base monthly with the 30 banks he covers, including the money-centers. He begins sharpening estimates in the middle of the last month of each quarter.

By then, the banks have two months of results for the period under their belts and hopefully a fair notion of how things are likely to end up.

In the meantime, Mr. Jaffe discusses the impact of industry trends with his fellow bank analysts at Fox-Pitt - Denis Laplante and Michael L. Granger.

And he works closely with clients, who include major shareholders in the banks he covers. "We interact with them a lot, to hear what they are hearing from the companies," he said.

The reason is clear. To promote better relations in an era of active shareholders, many banks and other companies are trying to go directly to shareholders with information rather than use traditional Wall Street channels.

To take advantage of the trend, Mr. Jaffe and his fellow analysts sometimes arrange to go along with investors on their own trips to visit banks, and sometimes even arrange such trips themselves.

Mr. Jaffe has been tracking banks for a decade for Fox-Pitt. He attributes a significant degree of his success to being in one place for 10 years.

"It's a people business and continuity matters," he said. "You can pick up things that are important more readily."

Mr. Jaffe, who is 41, joined the firm in 1985 after seven years at the former Irving Trust Co., New York, where he worked in corporate finance and in strategic planning, assisting the company's chief financial officer.

"At Irving, I was involved in a lot of things that had to do with the running fo the company," he said. "My viewpoint was from management's perspective, in strategic initiatives and improvement of profitability."

That experience has often served him well in understanding how big-bank managements think and operate. But he notes that this does not necessarily help in estimating earnings.

"Every bank is different," he said. "You can't necessarily apply something from one place to another place."

However, following a number of regional banks, in addition to money- centers, does help. "Sometimes you get an early warning of trends that are going to be important," he said.

A native New Yorker, Mr. Jaffe worked at Merrill Lynch & Co. for several years while obtaining his graduate business degree from New York University. His bachelor's degree is from Clark University, Worcester, Mass.

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