Magazine article American Banker

Bankers Trust Weighed Down by Persistent Market Doubts

Magazine article American Banker

Bankers Trust Weighed Down by Persistent Market Doubts

Article excerpt

Shares of Bankers Trust New York Corp. appear unable to break out of their protracted torpor, dogged by worries about trading activities and criticism on Wall Street of the bank's tight-lip attitude.

Several analysts have sliced earnings estimates in the wake of Bankers Trust's secondquarter results and offered views about the company ranging from lukewarm to decidedly chilly.

Diane B. Glossman of Salomon Brothers Inc. retained her "buy" rating on the shares but made clear that support from a lofty dividend yield, currently at 5.3%, was a major factor.

'Distinctly Lackluster'

She criticized earnings as "distinctly lackluster," warned of potential "runaway expenses," and said the bank's refusal to quantify Brazilian income left a "poor impression?

Brazil this year issued pastdue interest bonds to its bank creditors. Bankers Trust declined to say how much it realized from sale of those bonds, characterizing the income only as "significant."

The bank also demurred on specifying the size of an insurance settlement it got for fire damage at its New York headquarters, estimated by analysts at $20 million. Both the Brazilian income and insurance recovery contributed to earnings as extraordinary items.

Bankers Trust shares were up 12.5 cents Wednesday afternoon, to $68, well below their yearend closing price of $79.12.

Bearish at Natwest

The most negative assessment of the bank comes from Stephen Berman of Natwest Securities Corp., who last week reduced his investment rating of Bankers Trust to "underperform," from "hold."

"I felt less comfortable about their business," he said Wednesday, "and I didn't feel they had provided any insights. You could take a shot in the dark and come up with a more positive view, but it certainly wouldn't be based on anything they've said."

Ms. …

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