Bankers Trust Corp. said operating profits rose 7%, to $228 million, in the second quarter as growing corporate finance fees offset trading losses in Latin America and Asia.

Earnings per share of $2.06, excluding a one-time charge, beat Wall Street's consensus forecast by 3 cents.

"Asia was somewhat visible but not a disaster," said Judah Kraushaar, an analyst at Merrill Lynch & Co. "It was a relief."

The $172 billion-asset banking company said net income fell 23%, to $164 million, reflecting an $89 million pretax charge to integrate recently acquired underwriting businesses. In April, Bankers Trust bought Natwest Markets' European equity underwriting and research group and renamed it BT Alex. Brown International.

The New York company took a $60 million provision for Asian credit losses, the same as in the first quarter. Trading revenues declined 91%, to $242 million, including a $38 million loss from derivatives in Asia and a $17 million loss in Latin American trading.

Those losses were offset by strong results in investment banking, asset management, and private banking.

Corporate finance fees surged 45%, to $392 million. Fees from investment management and fiduciary services grew 8%, to $285 million. Overall, fee revenue gained 4%, to $1.2 billion.

Frank N. Newman, chairman and chief executive officer, said the jump in corporate finance fees reflected "substantial momentum in securities underwriting activities and our merger and acquisition services."

Analysts said the momentum is likely to continue.

"Natwest is going to be a good booster," said Steven Biggar, an analyst at S&P Equity Research.

The bank's private-client services group doubled its net income, to $26 million, while profits from global institutional services also doubled, to $21 million.

Bankers Trust's Australia and New Zealand businesses also did well, earning $34 million compared with $7 million a year earlier.

Analysts said they were pleased with the results in Bankers Trust's core businesses, but many said they were still cautious about the bank's exposure in Asia.

"We are reasonably optimistic that Bankers Trust's losses in Asia will moderate in the next few quarters, but they won't disappear," said Raphael Soifer, an analyst at Brown Brothers, Harriman & Co.

The bank said it reduced its credit exposure in Indonesia, Thailand, and Korea by 10% in the quarter and by 28% since the beginning of the year. Cross-border exposure in those countries totaled $2.5 billion at the end of June. +++

Bankers Trust Corp.

New York

Dollar amounts in millions (except per share)

Second Quarter 2Q98 2Q97

Net income $164.0 $213.0

Per share 1.46 1.89

ROA 0.38% 0.65%

ROE 12.10% 15.60%

Net interest margin 1.12% 1.36%

Net interest income 366.0 340.0

Noninterest income 1,242.0 1,194.0

Noninterest expense 1,320.0 1,225.0

Loss provision 60.0 0.0

Net chargeoffs 55.0 2.0

Year to Date 1998 1997

Net income $386.0 $413.0

Per share 3.46 3.65

ROA 0.48% 0.65%

ROE 14.40% 15.20%

Net interest margin 1.28% 1.38%

Net interest income 768.0 671.0

Noninterest income 2,533.0 2,260.0

Noninterest expense 2,645.0 2,329.0

Loss provision 120.0 0.0

Net chargeoffs 106.0 17.0

Balance Sheet 6/30/98 6/30/97

Assets $172,311.0 $131,367.0

Deposits 46,543.0 38,430.0

Loans 22,233.0 19,000.0

Reserve/nonp. loans 264% 251%

Nonperf. loans/loans 1.10% 1.50%

Nonperf. assets/assets 0.50% 0.40%

Nonperf. assets/loans + OREO 4.00% 2.70%

Leverage cap. ratio 3.70%(a) 5.00%

Tier 1 cap. ratio 8.00%(a) 9.20%

Tier 1+2 cap. ratio 14.00%(a) 14.80%

(a) estimated ===

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