Bankers Trust plunges on derivatives losses

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Bankers Trust, the American investment bank, saw trading revenue collapse from a record $449m in the last quarter of 1993 to $49m in the last three months of 1994 because of a slump in emerging markets and derivatives trading.

The bank, one of the most aggressive traders on Wall Street, suffered losses and bad publicity when it was sued by several derivatives clients last year, including Procter & Gamble. It was also reprimanded and fined by regulators for its actions in its leveraged derivatives business.

Net income,fell from $279m in the last quarter of 1993 to $101m in 1994. Overall net income for 1993 was $995m against $615m for last year.

Bankers Trust said 1994 fourth-quarter proprietary trading was mainly weak in fixed income instruments, and trading results fell significantly in emerging markets of Asia and Latin America.

Raphael Soifer, an analyst with Brown Brothers Harriman in New York, said the weak client derivatives profits of $28m reflected client volumes that were slow for all players.

Charles Sanford, the chairman of ,Bankers Trust, said: "The year's results were affected by persistently difficult market conditions which had a negative effect on trading revenue, while revenue increased from the firm's client-related businesses that provide financing, advisory and transaction processing services."