<PAGE> 1
                                PART I
Item 1.  Business.

Norwest Financial, Inc. (the "Company") is an Iowa Corporation organized on 
August 19, 1982, as the successor to a business founded in 1897, and is a
wholly-owned subsidiary of Norwest Financial Services, Inc. (the "Parent").
On November 2, 1998, Norwest Corporation, the parent of Norwest Financial
Services Inc., changed its name to Wells Fargo & Company upon the merger
of the former Wells Fargo & Company into a wholly-owned subsidiary of Norwest
Corporation.  The Parent is now a wholly-owned subsidiary of Wells Fargo & 
Company ("Wells Fargo"), a $202 billion diversified financial services 
organization.  (Unless the context otherwise requires, any reference to 
"Norwest Financial" shall include the Company and its subsidiaries.)

Norwest Financial is a leading diversified consumer finance company.
Norwest Financial's consumer finance operations make loans to individuals
and purchase sales finance contracts through 916 consumer finance branches
in 46 states, Guam, Saipan, Puerto Rico, Argentina and the ten Canadian
provinces.  Norwest Financial also issues credit cards primarily through 
two banking subsidiaries.  Norwest Financial's automobile finance operations
have 231 branches in 33 states and Puerto Rico and specialize in purchasing
sales finance contracts directly from automobile dealers and making loans
secured by automobiles.  For additional information on the financial results
of the Company's segments see note 14 to the consolidated financial
statements.

The Company also has insurance subsidiaries which are primarily engaged in
the business of providing, directly or through reinsurance arrangements,
credit life and credit disability insurance as a part of Norwest Financial's
consumer business and the consumer business of certain affiliates.  Credit 
property, involuntary unemployment and non-filing insurance are provided as
part of Norwest Financial's consumer business.  Such business is written,
directly or through reinsurance agreements, by the Company's insurance
subsidiaries, or it is offered on an agency basis by Norwest Financial.
Under the Bank Holding Company Act of 1956, the insurance underwriting 
activities of the Company's insurance subsidiaries (other than the Company's
foreign insurance subsidiaries and insurance subsidiaries that are 
subsidiaries of the Company's state chartered bank subsidiary) are limited
generally to the underwriting (directly or through reinsurance arrangements)
of insurance that (1) is directly related to an extension of credit by
Wells Fargo or any of its subsidiaries, and (2) is limited to assuring the 
repayment of the outstanding balance due on the extension of credit in the 
event of the death, disability or involuntary unemployment of the borrower.  
The Company's casualty insurance subsidiaries are permitted under this Act 
to underwrite non-filing insurance policies issued to Wells Fargo or any of 
its subsidiaries.  The Company also has insurance subsidiaries which write
federally insured multiple peril crop insurance.

Information services are provided to Norwest Financial and other financial
services companies by subsidiaries of the Company.  The Company also has
subsidiaries engaged in the commercial finance business, including lease
financing and accounts receivable financing.

In October 1998, two of the Company's automobile finance subsidiaries,
Community Credit Co. and Fidelity Acceptance Corporation, acquired $320 
million in automobile finance contracts from Sunstar Acceptance Corporation,
a division of NationsBank.

Effective February 21, 1997, Norwest Corporation acquired Reliable Financial
Services, Inc. ("Reliable").  Norwest Corporation made a capital 
contribution, without consideration, of all the issued and outstanding shares of
capital stock of Reliable to the Parent.  This capital contribution was 
accounted for as a merger of interests under common control.  Effective 
June 30, 1998, the Parent made a capital contribution, without consideration,
to the Company of the issued and outstanding shares of capital stock of 
Reliable.  This capital contribution was accounted for as a merger of 
interests under common control.  Reliable's headquarters are in San Juan, 
Puerto Rico and its principal business is automobile finance.  Reliable had
finance receivables outstanding of $293 million at the time of the 
contribution.

<PAGE> 2

Effective April 21, 1998, one of the Company's Canadian subsidiaries
acquired all of the issued and outstanding shares of capital stock of The
T. Eaton Acceptance Co. Limited ("TEAC") and National Retail Credit Services
Limited ("NRCS").  The acquisition was accounted for as a purchase.
TEAC and NRCS are headquartered in Toronto, Ontario and are primarily
engaged in purchasing sales finance contracts.  TEAC and NRCS had finance 
receivables outstanding of $305 million at the time of the acquisition.

Effective January 7, 1998, the Company, through its wholly-owned subsidiary,
Finvercon USA, Inc. acquired Finvercon S.A. Compania Financiera
("Finvercon").  The acquisition was accounted for as a purchase.  Funding 
necessary for this acquisition was provided to Finvercon USA, Inc. by the
Company.  Finvercon is engaged in consumer finance operations from its office
in Buenos Aires, Argentina and had receivables outstanding of $33 million 
at the time of acquisition.

Effective August 31, 1997, Norwest Corporation, through its wholly-owned 
subsidiary, Fidelity Acceptance Holding, Inc. ("FAHI"), acquired Fidelity
Acceptance Corporation.  The acquisition was accounted for as a purchase.
Funding necessary for this acquisition (totaling approximately $1.1
billion) was provided via a term loan to FAHI by the Company.  Effective
September 2, 1997, Norwest Corporation made a capital contribution, without
consideration, of all the issued and outstanding shares of capital stock of
FAHI to the Parent. Immediately thereafter, the Parent made a capital
contribution, without consideration, of all the issued and outstanding 
shares of capital stock of FAHI to the Company.  This capital contribution 
was accounted for as a merger of interests under common control.  The
principal business of Fidelity Acceptance Corporation and its subsidiaries
("Fidelity") is purchasing sales finance contracts directly from automobile
dealers and making loans secured by automobiles.  Fidelity operated 147
branch offices in 31 states and Guam and had approximately $1.1 billion in
finance receivables outstanding at the time of the contribution.

Effective May 4, 1995, Norwest Corporation purchased Island Finance, a group
of eight consumer finance companies headquartered in San Juan, Puerto Rico,
with 130 branch offices located in Puerto Rico, the U.S. Virgin Islands,
Netherlands Antilles, Panama, Aruba, and Costa Rica.  Island Finance's 
principal business is making direct loans to individuals. Although Island 
Finance is not included in the Company's financial results, the Company 
manages Island Finance and had term loans of $389 million at December 31,
1998 with Island Finance Puerto Rico, Inc., one of the companies in the 
Island Finance group.  In conjunction with the Island Finance acquisition, 
the Company also acquired the net assets of seven offices in Puerto Rico 
which are engaged in purchasing sales finance contracts.  The acquisition
of the net assets of those offices was accounted for as a purchase.

Effective January 1, 1995, the Parent made a capital contribution, without 
consideration, to the Company of the issued and outstanding shares of capital 
stock of Community Credit Co. and Dial National Bank.  These capital
contributions to the Company have been accounted for as a merger of interests
under common control.  Community Credit Co. and its subsidiaries ("Community 
Credit") are primarily engaged in automobile finance and had 55 branch 
offices and assets of $213.6 million at January 1, 1995.  Net earnings in 
1994 were $6.3 million.  Dial National Bank is primarily engaged in the 
credit card business and had assets of $112.2 million at January 1, 1995 and 
net earnings of $4.0 million for the year ended December 31, 1994.

The common stock of one of the Company's consumer finance subsidiaries was 
transferred by way of a non-cash dividend to the Parent on November 1, 1994.
This subsidiary had assets totaling $147.1 million and 39 branch offices at 
the time of the transfer.



<PAGE> 3
                             CONSUMER OPERATIONS

At  December 31, 1998, consumer receivables accounted for 93% of Norwest
Financial's total finance receivables outstanding.  The amount and type of
consumer receivables outstanding  are  shown below:


                    Consumer Receivables Outstanding

(In Thousands)

United States consumer finance:
    Loans secured by real estate                         $1,889,410
    Loans not secured by real estate                      1,124,381

       Total loans                                        3,013,791

    Sales finance contracts                               1,191,675
    Credit cards                                            489,131

       Total United States consumer finance               4,694,597

Canadian consumer finance:
     Loans secured by real estate                            67,425
     Loans not secured by real estate                       390,612

       Total loans                                          458,037

     Sales finance contracts                                474,924
     Credit cards                                             7,608
         
       Total Canadian consumer finance                      940,569

Automobile finance                                        1,981,816

Finvercon                                                    83,936

       Total consumer receivables                        $7,700,918


<PAGE> 4

                              Geography


At December 31, 1998, Norwest Financial had consumer finance branch offices
in 46 states, Guam, Saipan, Puerto Rico, Argentina, and the ten Canadian
provinces and automobile finance branch offices in 33 states and Puerto Rico.
The number of branch offices and percentage of receivables for consumer 
finance and for automobile finance at December 31, 1998, are shown below:


Consumer Finance Number of Branch Offices and Percent of Receivables


                      Percent of                                  Percent of
                       Consumer                                    Consumer
            Branch     Finance                        Branch        Finance
Location    Offices   Receivables   Location          Offices     Receivables

Alaska          6        .9%        Oregon               13           1.2%
Arizona        17        1.5        Pennsylvania         26           3.1
California     79        7.9        Puerto Rico           7            .6
Colorado       14        1.5        Rhode Island          4            .5
Connecticut     3         .3        Saipan                1            .1
Delaware        2         .1        South Carolina       22           2.5
Florida        42        4.6        South Dakota          3            .2
Georgia        21        2.4        Tennessee            25           2.6
Guam            3         .7        Texas                48           4.2
Hawaii         12        1.1        Utah                 13           1.3
Idaho          13        1.0        Virginia             10           1.0
Illinois       26        2.6        Washington           21           2.4
Indiana        16        1.3        West  Virginia        6            .7
Iowa           15        1.5        Wisconsin            14           1.0
Kansas          7         .7        Wyoming               4            .3
Kentucky       18        1.6
Louisiana      30        2.6          Total  U.S.       768          79.7%
Maine           2         .1
Maryland       20        3.1        Alberta              10           1.5%
Massachusetts  11        1.4        British Columbia     19           2.5
Michigan        5         .3        Manitoba              4            .7
Minnesota      12        1.2        New  Brunswick       12            .9
Mississippi    17        1.6        Newfoundland         15           1.0
Missouri       26        2.7        Nova  Scotia         17           1.6
Montana         7         .8        Ontario              43           7.0
Nebraska       10        1.0        Prince Edward Island  2            .2
Nevada         12        1.2        Quebec               21           2.8
New Jersey      8         .9        Saskatchewan          4            .5
New Mexico     20        1.6
New York       13        2.1          Total  Canada     147          18.7%
North Carolina 16        2.5
North Dakota    6         .5        Argentina             1           1.6%
Ohio           28        3.4
Oklahoma       14        1.3          Total Consumer
                                        Finance         916         100.0%

<PAGE> 5

Automobile Finance Number of Branch Offices and Percent of Receivables


                      Percent of                                  Percent of
                      Automobile                                  Automobile
             Branch     Finance                         Branch      Finance  
Location     Offices  Receivables   Location            Offices   Receivables

Alabama         6        1.8%       Mississippi            6          2.8%
Arizona         9        4.2        Missouri               8          3.3
California     31       15.4        Nebraska               2           .5
Colorado        9        2.6        Nevada                 4          1.4
Delaware        1         .6        New  Jersey            2           .7
Florida         4         2.2       New  Mexico            2           .3
Georgia        13         3.2       Ohio                  18          6.1
Hawaii          1          .5       Oklahoma               3           .9    
Idaho           1          .1       Oregon                 2           .4
Illinois       17         6.8       Pennsylvania           4           .9
Indiana         9         2.7       Puerto Rico            3         17.6
Iowa            1          .1       South Carolina         2           .5
Kansas          6         2.2       Tennessee              8          2.5
Kentucky        5         2.0       Texas                 10          3.1
Louisiana       4         1.8       Utah                   3          1.0
Michigan        1         1.1       Washington             4          1.2
Minnesota      21         5.6       Wisconsin             11          3.9

                                      Total Automobile
                                        Finance          231        100.0%

<PAGE> 6

                            Growth and Volume


United States and Canadian Consumer Finance 
The following tables present the growth and volume of United States ("U.S.") 
and Canadian consumer finance loans and sales finance contracts for the five
years ended December 31, 1998 (United States and Canadian consumer finance are
combined in the charts below since their portfolios are similar.)


     Consumer Finance Receivables and Number of Accounts Outstanding

                         Net                             Average          
         December      Receivables        Number         Balance
            31,       (in thousands)   of Accounts     per Account

           1998        $5,138,427       3,175,000        $1,618
           1997         4,783,471       2,447,000         1,955
           1996         4,770,519       2,539,000         1,879
           1995         4,562,392       2,506,000         1,821
           1994         4,153,594       2,311,000         1,797


                       Consumer Finance Volume

                                              Sales Finance
                 Loans Made      Number of      Contracts      Number of
Years Ended     and Acquired     Loans Made     Purchased      Contracts
December 31,   (in thousands)*  and Acquired  (in thousands)   Purchased

  1998           $2,936,879        872,000      $2,026,970     1,902,000
  1997            2,812,670        956,000       1,893,546     1,830,000
  1996            2,859,161      1,025,000       1,977,983     1,918,000
  1995            2,673,104      1,013,000       1,951,718     1,905,000
  1994            2,729,095      1,051,000       1,825,917     1,825,000


*  Includes balances renewed of $825,982,000; $812,052,000;
   $840,256,000; $766,552,000; and $759,775,000 for the years
   1998 through 1994, respectively.

Norwest Financial markets VISA and MasterCard credit cards to certain of 
its customers through its United States consumer finance branch offices.  
These credit cards are issued by Dial Bank, the Company's state chartered 
bank subsidiary located in Sioux Falls, South Dakota.  Dial Bank had 260,000 
accounts at December 31, 1998; credit card receivables outstanding were 
$277.6 million.

Dial National Bank is a federally-chartered bank located in Des Moines, 
Iowa.  The bank issues private label credit cards and dual-line Co-Branded 
MasterCard credit cards for several national companies.  The dual-line 
credit card serves as a private label credit card for use at any of the
Co-Branders' retail locations, as well as a traditional MasterCard credit 
card for use at locations around the world.  Dial National Bank had 191,000 
accounts at December 31, 1998; credit card receivables outstanding were 
$211.5 million.

<PAGE> 7

Automobile Finance
The following tables present the growth and volume of Norwest Financial's 
automobile finance receivables for the four years ended December 31, 1998.
(Only four years of information is shown for automobile finance.  This 
operation consists of Community Credit which was contributed by the
Parent effective January 1, 1995, Fidelity which was contributed by the 
Parent effective September 2, 1997, and Reliable which was contributed 
by the Parent effective June 30, 1998.):

    Automobile Finance Receivables and Number of Accounts Outstanding

                            Net                         Average
         December       Receivables        Number       Balance
            31,        (in thousands)    of Accounts  per Account

          1998           $1,981,816        235,000      $8,433
          1997            1,442,614        182,000       7,926
          1996              306,537         40,000       7,663
          1995              240,322         35,000       6,866


                            Automobile Finance Volume

                                 Net Receivables        Number of
               Years Ended      Made and Acquired     Accounts Made     
               December 31,      (in thousands)*      and Acquired

                  1998             $1,215,906            134,000
                  1997                553,526             60,000
                  1996                267,175             30,000
                  1995                231,630             30,000

*  Includes balances renewed of $64,061,000; $38,155,000; $33,794,000;
   and $28,244,000 for the years 1998 through 1995, respectively.

  
                                 Regulation


U.S. Consumer Finance, Canadian Consumer Finance, Automobile Finance
Norwest Financial's consumer finance and automobile finance operations in 
the United States are, for the most part, regulated by consumer finance laws
or similar legislation in each of the states or other jurisdictions where 
Norwest Financial has branch offices.  Although consumer finance laws have 
been in effect many years, amending and new legislation is frequently 
enacted.  In those states which have enacted legislation in recent years 
that affects the maximum permitted amount of loan and maximum allowable rate
of charge, the trend has been to increase such amounts and rates of charge 
or to deregulate the same altogether. With respect to the foregoing, Norwest
Financial's consumer lending operations in Canada are, for the most part,
essentially unregulated.

<PAGE> 8

Consumer finance laws generally require that each branch office be licensed 
to conduct its business.  In most jurisdictions the granting of licenses is
dependent on a finding of financial responsibility, character and fitness
of the applicant and, in some jurisdictions, public convenience and advantage. 
Each licensed branch office is subject to state or provincial regulation and
examination.  In nearly all states a report of the activities of licensed
branch offices must be made annually to the appropriate state department.  
Licenses are revocable for cause and their continuance depends upon 
compliance with the provisions of the applicable state or provincial law.
Norwest Financial has never had any of its licenses revoked.

The Federal Consumer Credit Protection Act (the "Act") requires a written 
statement showing the annual percentage rate of finance charge and other 
information to be given to borrowers when consumer credit contracts are made.  
When a closed-end loan (a loan which does not allow additional borrowings) 
with rates or fees above a certain percentage or amount is secured by the
borrower's principal dwelling, additional disclosures must be given at least 
three business days before the loan is consummated, and limits on prepayment 
penalties apply to the loan.  The Act also requires certain disclosures to
applicants concerning credit reports that are used as a basis for denying or
increasing the charge for credit.

The Real Estate Settlement Procedures Act requires creditors to provide 
consumers with estimates of closing costs and other disclosures before 
loans secured by residential real estate are made and disclosures of the 
actual closing costs at the time the loan is made.

The Federal Equal Credit Opportunity Act prohibits discrimination against 
applicants with respect to any aspect of a credit transaction on the basis 
of sex, martial status, race, color, religion, national origin, age (provided
the applicant has the capacity to contract), or because all or part of the 
applicant's income derives from any public assistance program, or because 
the applicant has in good faith exercised any right under the Federal 
Consumer Credit Protection Act.

By virtue of a Federal Trade Commission rule, sales finance contracts and 
certain loans (those made for the borrower's purchase of personal property 
from a seller having a relationship with the lender) contain a provision 
that the lender is subject to all claims and defenses which the borrower 
could assert against the seller.  However, the borrower's recovery under 
such provision cannot exceed the amount paid under the contract. 

A Federal Trade Commission trade regulation rule on creditor practices 
prohibits, among other things, the taking of a security interest (other than
a purchase money security interest) in certain of a borrower's household goods.
In Canada, there are similar laws regarding the granting of credit.


                             Business Methods

In order to make a careful selection of credit risks, Norwest Financial 
reviews credit information concerning each applicant to determine income, 
living expenses, payment obligations, indebtedness, paying habits, and 
length and stability of employment.  The information is obtained from
the applicants, the applicants' employers, creditors of the applicants 
and credit reporting agencies.  Norwest Financial believes that any risk to 
its business which may be created by unfavorable local conditions is 
minimized by the large number of customers, their broad range of occupations 
and geographical distribution.

<PAGE> 9

United States and Canadian Consumer Finance
Loans are generally repayable in monthly instalments and are made for periods 
of 180 months or less.  Sales finance contracts may be either open-end 
(revolving) or closed-end.  An open-end sales finance contract establishes 
an account that can be used from time to time for repeated purchases.  A 
closed-end sales finance contract covers only a single purchase.  At 
December 31, 1998, 73% of sales finance receivables in the consumer finance 
operations were open-end.  Open-end sales finance contracts do not have an
original maturity because the accounts created by these contracts may be 
used for repeated transactions.  The minimum monthly payment of open-end 
sales finance contracts generally ranges from 1/12 to 1/30 of the highest 
unpaid balance of the account.  Closed-end sales finance contracts are 
repayable in equal monthly instalments and generally have original maturities
of 60 months or less.

In many cases loans are secured by liens on household goods, other personal 
property or real estate.  Of the total loans made during 1998, approximately
92% of the amount and 88% of the number were secured by security agreements 
or other forms of security.  The decision to record a lien or to appraise or 
examine the title to collateral depends upon the size of loan and the type of
collateral.  As an alternative to recording liens on personal property 
securing certain loans, Norwest Financial purchases non-filing insurance, 
the cost of which is borne by the borrowers.  Generally, Norwest Financial 
initiates legal proceedings on its loans, including foreclosure on 
collateral, only when it appears that a recovery is likely which will justify
the cost of bringing suit.

Generally, Norwest Financial carries only one loan with a borrower at any one 
time.  When a borrower wishes to obtain additional money from Norwest 
Financial before the loan is fully repaid, a new loan is made sufficient 
to pay the balance on the old loan and supply the new money, provided
the borrower's credit is satisfactory.  Of the total amount of loans made 
during 1998, 62.1% represented funds lent to borrowers who requested 
additional money while still owing Norwest Financial.  In the years 1997 
through 1994, this figure was 61.7%, 64.6%, 64.6% and 63.5%, respectively.  
In 1998, of the 872,000 loans made by Norwest Financial's consumer finance 
operations, 357,000 were to borrowers who requested additional money while 
still owing a balance to Norwest Financial.  The average amount of additional
money lent to such borrowers was $2,677; the average amount of the old 
balance was $2,311.  Norwest Financial's policy is that loans are not made 
to present customers to cure a default in principal or interest.

For consumer finance branch offices, sales finance contracts are the primary
source of new customers for direct loans; of new loans made in 1998, 62.1% 
were to current or former sales finance customers.

The credit insurance operations have a close relationship with Norwest 
Financial's consumer operations.  Generally, where applicable laws permit, 
Norwest Financial makes credit life, credit disability, property, and 
involuntary unemployment insurance available to borrowers.  If the customer 
decides to purchase insurance, an additional charge is made.  Credit life 
insurance generally provides, at a minimum, for the repayment of the 
indebtedness upon the death of the insured borrower.  Credit disability 
coverage provides for the monthly payment of the indebtedness while
the borrower is disabled because of accident or illness.  Property 
insurance provides for the payment of the value or cost of repairs 
or replacement of covered property of the borrower if the property 
is damaged, destroyed or stolen.  Involuntary unemployment insurance 
provides for the monthly payment of the indebtedness while the borrower is
unemployed, if the borrower becomes unemployed due to layoff, termination, 
lockout, labor disputes or strike.  Non-filing insurance is an alternative 
to perfecting a security interest in property used as collateral.  Payment 
is provided, up to a specified limit, when there is a loss with this 
coverage which resulted from the failure to perfect a security interest.

The laws of most of the states in which Norwest Financial operates regulate 
the sale of insurance to borrowers by prescribing, among other things, the 
maximum amount and term thereof and by fixing the permissible premium rates 
or authorizing the state insurance commissioner or other state official to 
fix the maximum premium rates on such insurance.  In several states such 
rates have been reduced in recent years.

Income before income taxes from the underwriting (as principal), or the sale
(as agent), of insurance for the years 1998 through 1994, was $66,519,000; 
$77,406,000; $81,255,000; $74,071,000, and $68,616,000, respectively for
U.S. and Canadian consumer finance.

<PAGE> 10

Automobile Finance
Loans are generally repayable in monthly instalments and are made for periods
of 60 months or less.  Sales finance contracts are all closed-end.  These 
contracts are repayable in equal monthly instalments and generally have 
maturities of 60 months or less.

In most cases, receivables are secured by automobiles.  Of the total 
receivable volume in 1998, approximately 99% of the amount and 98% of the 
number were secured by security agreements or other forms of security. 
Norwest Financial initiates legal proceedings on its receivables, including
repossessions of collateral, when it appears that a recovery is likely which 
will justify the cost of bringing suit.

Credit insurance operations also have a close relationship with automobile 
finance operations, see the discussion of insurance included above.  Income 
before income taxes from the underwriting (as principal),or the sale (as 
agent), of insurance for the years 1998 through 1995, was $3,183,000;
$1,668,000; $786,000, and $694,000, respectively, for automobile finance.


                               Loss Experience

All such receivables which appear to be uncollectible or to require 
inordinate collection costs are written off.  In addition, consumer finance 
receivables in the United States are generally written off if no payment is 
applied during the three month period immediately preceding the balance
sheet date and the receivables are 90 days or more contractually delinquent. 
Automobile finance receivables are written off when the receivable is 150 
days or more contractually delinquent.  All other consumer receivables
are written off when the receivable is 180 days or more contractually 
delinquent.  The Company has an established process to determine the 
adequacy of the allowance for credit losses which assesses the risk and 
losses inherent in its portfolio.  The determination of the allowance for the
consumer portfolios is conducted at an aggregate or pooled level. The risk 
assessment process emphasizes the development of forecasting models, which 
focus on recent delinquency and loss trends in different portfolio segments
to project relevant risk metrics over an intermediate-term horizon.  
The analysis is updated to capture the most recent behavioral characteristics
of the portfolios, as well as any changes in management's loss mitigation 
strategies in order to reduce the differences between estimated and observed
losses.  An allowance that approximates one year of projected net losses is 
provided as the baseline allocation for most homogeneous portfolios, to 
which management adds certain adjustments to ensure that a prudent amount of
conservatism is present in the specific assumptions underlying the forecast.

During the fourth quarter of 1998, the Company reviewed its policies 
involving the write off of receivables that are a predetermined number of 
days delinquent.  As a result of the review, the Company made several changes
in its policies to reflect current trends and expectations.  The changes 
resulted in additional consumer write-offs of $37.4 million.

Write-offs after recoveries, as a percent of average consumer receivables, 
including the additional write-offs were 4.26% in 1998.  Excluding the 
additional write-offs, the net write-off percent was 3.72%.  The net 
write-off percentages were 3.87%, 3.55%, 2.66%, and 2.24% in 1997 through 
1994, respectively.  The increases in 1998 and 1997 were due primarily to
the addition of Fidelity.  The increases in the net write-off percentages in 
1996 and 1995 were due primarily to increased net write-offs in U.S.
consumer finance portfolio.

<PAGE> 11

Information concerning consumer loss experience and allowance for credit 
losses is shown below:
<TABLE>
<CAPTION>

(In Thousands)                          Years Ended December 31,
                           1998        1997       1996       1995       1994
<S>                      <C>         <C>        <C>        <C>        <C>
Allowance, beginning
  of year                $291,450    $162,983   $152,108   $126,802   $114,876

Write-offs:
  Loans                  (167,301)   (144,711)  (122,703)   (96,278)   (77,751)
  Sales finance          (156,111)    (90,515)   (61,184)   (37,118)   (23,920)
 Credit cards             (22,294)    (21,901)   (23,903)   (11,570)    (5,925) 
   Total write-offs      (345,706)   (257,127)  (207,790)  (144,966)  (107,596)
   
Recoveries:
  Loans                    28,912      21,257     13,370     12,058     12,257
  Sales finance            15,688       8,525      4,233      2,997      2,528
  Credit cards              3,137       2,481      1,458        852        470
    Total recoveries       47,737      32,263     19,061     15,907     15,255

Provision for credit 
  losses charged to 
  expense                 299,597     232,818    195,952    143,467    107,931
                            
Allowance related to
  receivables acquired,
  contributed or
  (transferred) - net      48,790     120,513      3,652     10,898     (3,664)
                                   
Allowance, end of year:
  Loans                   163,256     135,776     87,046     82,443     77,756
  Sales finance           155,678     136,004     62,167     54,365     40,696
  Credit cards             22,934      19,670     13,770     15,300      8,350
    Total allowance      $341,868    $291,450   $162,983   $152,108   $126,802

Ending receivables as
  a percent of total
  consumer receivables:
    Loans                      53%         59%       62%         61%        68%
    Sales finance              40          35        31          29         28
    Credit cards                7           6         7          10          4
                              100%       100%       100%        100%       100%

Allowance as a percent of
  ending receivables         4.44%      4.38%      2.99%       2.86%      2.92%

Write-offs after recoveries
  as a percent of average
  consumer receivables       4.26%      3.87%      3.55%       2.66%      2.24%

Consumer receivables
  outstanding more
  than three payments
  contractually 
  delinquent             $158,026   $127,622    $123,961   $101,693    $77,233
                                  
</TABLE>
                                  
Non-accrual automobile finance receivables were $26,197,000 at 
December 31, 1998.


<PAGE> 12

                            OTHER OPERATIONS
Other operations consist of commercial finance operations, information
services, other insurance operations and Finvercon.


                     Commercial Finance Operations

At December 31, 1998, commercial finance receivables accounted for 7% of 
Norwest Financial's total finance receivables outstanding.  The following 
table presents Norwest Financial's commercial finance receivables 
outstanding for the five years ended December 31, 1998:


Commercial Finance Receivables Outstanding

(Dollars In Thousands)

                                 Commercial             Percentage 
                                  Finance           Increase (Decrease)
               December 31,      Receivables        From Previous Year

                 1998             $569,309                  22%
                 1997              465,601                  (6)
                 1996              494,104                  (3)
                 1995              507,480                   1
                 1994              500,270                  (2)



                               Loss Experience

The allowance for losses on commercial finance receivables is based on loss 
experience in relation to commercial finance receivables outstanding.  All 
such receivables which appear to be uncollectible or to require inordinate
collection costs are written off.  In addition, receivables are generally
written off when the receivable is 180 days or more contractually delinquent.


<PAGE> 13

Information  concerning commercial loss experience and allowance for credit
losses is shown below:

                                 Years Ended December 31,
(In Thousands)           1998         1997      1996       1995       1994

Allowance, beginning
  of year               $6,350       $6,150    $6,510     $9,150    $10,250
                           
Write-offs              (4,627)      (4,313)   (4,081)    (3,967)    (3,287)

Recoveries               1,716        1,454     1,193      1,476      1,248

Provision for credit 
  losses charged 
  (credited) to expense  4,677        3,059     2,528       (149)       939

Allowance related to 
  receivables acquired, 
  contributed or
  (transferred) - net    1,000
 
Allowance, end of year  $9,116       $6,350    $6,150     $6,510     $9,150

Allowance as a percent 
  of ending commercial
  finance receivables     1.60%        1.36%     1.24%      1.28%      1.83%

Write-offs after recoveries
 as a percent of average
 commercial finance
 receivables               .57%         .61%       .59%      .50%       .43%


Non-accrual commercial receivables totaled $6,332,000; $4,121,000; $3,189,000; 
$3,299,000; and $2,606,000 at December 31, 1998 through 1994, respectively.
During 1998, the finance charges and interest that would have been  recorded 
had non-accrual receivables been current in accordance with their original
terms would have been $272,000.  The amount of finance charges and interest
actually recorded on these receivables during 1998 totaled $225,000.

Commercial receivables outstanding which were more than three payments 
contractually delinquent and which were still  accruing interest  totaled
$378,000; $771,000; $916,000; $1,025,000; and $1,202,000 at December 31, 1998
through 1994, respectively.


Norwest Financial Leasing, Inc.
Norwest Financial Leasing, Inc. ("NFLI") is headquartered in Des Moines, Iowa 
and also has business production offices in Riverside, California and 
Charlotte, North Carolina.  NFLI specializes in financing commercial 
equipment such as office copiers, telephone systems, health care equipment, 
small computers, and light industrial equipment.  The cost of this equipment
generally ranges from $2,000 to above $200,000.  Finance receivables are 
generated primarily from equipment distributors ranging from small 
independently-owned vendors to large equipment manufacturers.


<PAGE> 14

Generally, an end-user will enter into a lease or rental agreement with a 
vendor.  After approving credit, NFLI purchases the contract from the vendor 
and collects the lease payments from the end-user.  Billing is often done in
the vendor's name, as are any customer service functions that might become 
necessary in connection with the lease or rental agreement (thus providing 
the vendor with a "private label" financing service).  In some instances, 
NFLI purchases the equipment and leases it to the end-user, with billing
and other customer contacts being done in the name of NFLI.  Leases and other 
commercial finance receivables acquired by NFLI generally provide for equal 
monthly payments and normally have an initial term of 60 months or less.


Norwest Financial Business Credit, Inc.
Norwest Financial Business Credit, Inc. provides custom designed financing 
programs to target the financing and marketing needs of retailers of consumer
goods and services. These relationships are structured as a loan to the 
retailer, using accounts receivable generated as a result of retail sales as
security.  Consumer credit approvals, billing, payment processing, and 
collections of the receivables securing the loan are conducted largely in the
retailers' names to provide a private label service.


Norwest Financial Preferred Capital, Inc.
Norwest Financial Preferred Capital, Inc. provides financing via secured 
lines of credit to commercial entities which in turn provide financing to 
their customers.  The business of these commercial entities is similar in 
nature to that of Norwest Financial.  This type of lending is often referred
to as rediscounting.


                      Other Insurance Operations

One of the Company's foreign insurance subsidiaries reinsures credit life 
and disability insurance written by a non-affiliated company.  Income (loss)
before income taxes from these operations for the years 1998 through 1994 
was $16,928,000; $15,790,000; $16,311,000; $9,149,000; and ($2,000), 
respectively.  In addition, the Company has insurance subsidiaries which are
licensed to write federally insured multiple peril crop insurance throughout
the United States.  Multiple peril crop insurance is a federally regulated 
subsidized crop insurance program that insures a producer of crops with 
varying levels of protection against loss of yield from substantially all 
natural perils to growing crops.  Insurance premiums and commissions on 
multiple peril crop insurance for the years 1998 through 1994 were 
$145,138,000; $94,539,000; $41,841,000; $13,140,000; and $12,510,000,
respectively.  In addition, claim expense and underwriting expense for the 
years 1998 through 1994 were $133,445,000; $85,891,000; $36,436,000; 
$7,987,000; and $8,706,000, respectively.


                                   Finvercon

In January 1998, the Company acquired Finvercon, a consumer lender based in 
Buenos Aires, Argentina, which provided an entry into the South American
market.  Finvercon markets small loans to members of labor associations.  
Finvercon had 37,000 accounts outstanding at December 31, 1998; consumer
receivables outstanding were $83.9 million.


                         Information Services Operations

Norwest Financial Information Services Group, Inc. ("NFISG") has developed 
and installed an on-line real-time information processing and communications 
system called SWIFT, which connects, over leased telecommunication 
facilities, equipment located in branch offices to computer centers at the 
Company's principal executive offices to process loans and payments, write
checks, and perform bookkeeping functions.  The system provides information
services to consumer branch offices of Norwest Financial.  In addition, as of 
December 31, 1998, NFISG had contracts to supply information services to 21 
other finance companies.  On that date, approximately 2,500 branch offices 
were being served and 5.3 million accounts were being maintained on the 
system.

<PAGE> 15

NFISG developed an enhancement to the system called SUPREME which replaced
the paper ledger card with video display units. SUPREME provides greater
efficiencies and enhanced customer service by adding a number of new 
capabilities to the existing system.  For example, delinquency lists, daily
collection work lists,  solicitation lists, automated advertising, complete 
application processing including retrieval of credit bureau reports, and
company-wide access of account records are a few of the automated features
provided by SUPREME.  Eighteen subscribing companies were utilizing SUPREME 
at December 31, 1998.  Norwest Financial  has installed SUPREME in all of its
consumer  and automobile  finance branch offices in the United States and 
Canada.  Overall, 5.2 million accounts in approximately 2,400 locations were 
being maintained on SUPREME at December 31, 1998.

NFISG is developing a new system called SAPPHIRE which will replace all of 
NFISG's current system product offerings.  The new system design uses leading
edge technology to incorporate state-of-the-art support for virtually every 
facet of the consumer financial services industry.  Norwest Financial plans
to install SAPPHIRE in its branches beginning in 2000.  The system will be 
made available to other companies in 2000.

NFISG continues to offer such services for sale, although there can be no 
assurance of future sales, or that existing contracts will be renewed upon
expiration.  A discussion of the Year 2000 issue is included in Management's 
Discussion and Analysis of Financial Condition and Results of Operations.


                         ASSETS UNDER MANAGEMENT
                          
                          
Island Finance
Island  Finance, a group of eight consumer finance companies headquartered 
in San Juan, Puerto Rico, was acquired by Norwest Corporation in May 1995.
Norwest Financial manages  Island Finance.  Island Finance provides direct 
loans to individuals through 141 consumer finance offices located in Puerto 
Rico, the U.S. Virgin Islands, Netherlands Antilles, Panama, Aruba, and 
Costa Rica.  Receivables outstanding on December 31, 1998, totaled $890
million.

Island  Finance's financial results and receivables are not included in the
Company's statements of consolidated earnings or consolidated balance sheets,
however, Norwest Financial provides a portion of the funding for Island 
Finance.  At December 31, 1998, Norwest Financial had term loans of $389 
million with Island Finance Puerto Rico, Inc. ("IFPR"), one of the companies
in the Island Finance group.  The loans have a weighted average interest 
rate of 8.89% and mature in 2000 and 2002.  IFPR is also an issuer 
of commercial paper in the United States.  At December 31, 1998, IFPR's 
commercial paper outstanding totaled $678.4 million.  Other entities in the 
Island Finance group  obtain funding by borrowing from commercial banks and 
other affiliates.

In conjunction with the Island Finance acquisition, the Company also purchased 
seven offices in Puerto Rico which are engaged in purchasing sales finance
contracts.

<PAGE> 16
                                 SOURCES OF FUNDS
                          
Norwest Financial funds its operations through payments of principal and 
interest from finance receivables, capital funds, the  sale of debt
securities, and borrowings from banks and affiliates.  Fixed rate borrowings
with original maturities of more than one year comprise 63% of the Company's  
total indebtedness at December 31, 1998.  The remaining 37% includes 
commercial paper with maturities of nine months or less (32%) and short-term 
debt to affiliates and other short-term debt (5%).

The effective interest rate on commercial paper debt is higher that the 
stated rates due to commitment fees paid in connection with Norwest 
Financial's bank credit agreements (lines of credit and revolving credit 
agreements).  These agreements provide an alternative source of liquidity
to support the Company's commercial paper borrowings.

The weighted average annual interest cost of the total average daily 
borrowings outstanding in each of the respective years 1998 through 1994 
without commitment fees relating to bank credit agreements were  6.40%,  
6.37%, 6.44%, 6.74%, and  6.22%, respectively.  The corresponding figures 
including commitment fees were 6.41%, 6.39%, 6.46%, 6.76%, and 6.25%, 
respectively. Norwest  Financial has obtained and continues to obtain, at
prevailing rates, funds sufficient to conduct its business.

<TABLE>
<CAPTION>
                                  Years Ended December 31,
(Dollars in Thousands)          1998        1997        1996       1995          1994
<S>                          <C>         <C>         <C>         <C>         <C>                                                  
Bank credit agreements
 at December 31              $1,821,297  $1,322,413  $1,327,680  $1,456,633  $1,147,700
Number of banks participating
 in the credit agreements            32          33          33          38          34
Daily average outstanding:
 Commercial paper            $2,099,977  $1,817,534  $1,713,937  $1,523,898  $1,180,649
  Less excess funds 
  investments                    34,561      33,833      18,884      41,331      26,097
  Net average commercial
   paper outstanding         $2,065,416  $1,783,701  $1,695,053  $1,482,567  $1,154,552
Ratio of bank credit
 agreements to above                 88%         74%         78%         98%         99%

</TABLE>

See note 6 to the consolidated financial statements for a listing of the 
amounts and maturities of the Company's outstanding long-term debt at 
December 31, 1998 and 1997.


<PAGE> 17


                   RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of 
Norwest Financial for the periods indicated:

                         Years Ended December 31,

               1998      1997      1996       1995      1994

               1.72      2.00      2.11       2.13      2.26

The ratios of earnings to fixed charges have been computed by dividing
net earnings plus fixed charges and income taxes by fixed charges.
Fixed charges consist of interest and debt expense plus one-third of rentals
(which is deemed representative of the interest factor).
                           

                                COMPETITION

The business in which Norwest Financial is engaged is highly competitive.
In addition to competition from other consumer, automobile, and commercial 
finance companies, competition comes from sales finance companies, commercial 
banks, savings and loan associations, credit card companies, credit unions 
and retail establishments offering revolving credit plans.  The principal 
method of competition is service to customers, although interest rates and 
other financing charges are adjusted from time to time to reflect market
conditions.   Generally, Norwest Financial's interest rates or other 
financing charges are comparable to those of other companies engaged in
consumer finance, commercial finance and lease financing business, sales
finance companies, credit card companies and retail establishments offering
revolving credit plans.   They are usually higher than those of commercial 
banks, savings and loan associations and credit unions.  Norwest Financial 
is among the largest finance companies in the United  States, but is 
substantially smaller than the largest concerns.  Trans Canada Credit 
Corporation, one of the Company's Canadian subsidiaries, has been ranked
among the largest finance companies in Canada.

    
                            EMPLOYEE RELATIONS

As of December 31, 1998, the Company and its subsidiaries employed 
approximately 8,500 persons.  Management believes its employee relations 
are excellent.


Item 2.  Properties.

The Company owns an eleven-story building in Des Moines, Iowa, where its
principal executive offices are maintained.  One of the Company's life 
insurance subsidiaries owns a three-story building in Des Moines which is
used by the Company for administrative purposes.  Dial Bank owns a one-story
building  in  Sioux  Falls, South  Dakota, where its office is maintained.
All of Norwest Financial's other business offices (consisting of consumer 
finance and automobile finance branch  offices, commercial finance executive
and business production offices, and other administrative offices) are 
located in rented office space. Norwest Financial believes its facilities 
are suitable and adequate for its business needs.  These facilities are 
generally fully occupied and utilized, although in some instances, office 
space has been reserved for anticipated business expansion; otherwise,
additional office space or facilities are leased only when they are needed.

The equipment used in the information processing system (located at branch
offices, relay communication sites, and home office facilities) is leased
or owned by Norwest Financial.  Telecommunication lines used in the 
information processing system are leased on a monthly basis.

<PAGE> 18

Item 3.  Legal Proceedings.

Norwest Financial is a defendant in various matters of litigation generally
incidental to its business.  Although it is difficult to predict the ultimate
outcome of these cases, management believes, based on discussion with 
counsel, that any ultimate liability will not materially affect the financial
position and results of operations of the Company and its subsidiaries.

Item 4.  Submission of Matters to a Vote of Security Holders.

Omitted in accordance with General Instructions I(2) (c).

PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder 
         Matters.


All of the outstanding common stock (1,000 shares) of the Company is and was,
at all times during 1998 and 1997, owned beneficially and of record by a 
single stockholder, the Parent.


The aggregate amount of dividends paid by the Company on its common stock 
each quarter during 1998 and 1997 was as follows:


          (In Thousands)            1998      1997
          First quarter            $         $1,729
          Second quarter
          Third quarter           20,000
          Fourth quarter          30,000     60,000

Certain long-term debt instruments restrict  payment of dividends on and
acquisitions of the Company's common stock.  In addition, such debt 
instruments and the Company's bank credit agreements contain certain
requirements as to maintenance of net worth (as defined).  Approximately    
$915 million of consolidated stockholder's equity was unrestricted at 
December 31, 1998.

Item 6.  Selected Financial Data.

<TABLE>
<CAPTION>
                             Years Ended December 31,

(In Thousands)       1998        1997         1996         1995        1994
<S>              <C>          <C>          <C>          <C>          <C>
Total income     $2,005,765   $1,728,796   $1,582,993   $1,427,345   $1,183,991
Interest and 
  debt expense      485,784      401,736      372,859      359,079      259,605
Provision for 
  credit losses     304,274      235,877      198,480      143,318      108,870
Net income          238,604      269,450      276,331      267,941      223,340


                                   December 31,

(In Thousands)       1998         1997         1996        1995         1994

Total assets    $10,516,207   $9,321,924   $7,760,845   $7,539,259   $6,124,742 
Long-term debt    5,272,818    5,221,413    4,132,894    4,081,531    3,092,623

</TABLE>

<PAGE> 19

                             NORWEST FINANCIAL, INC.

Item 7.  Management's Discussion and Analysis of Financial Condition and 
         Results of Operations.

Norwest Financial's total income (revenue) increased 16% in 1998 and 9% in
1997 ($2,005.8 million in 1998 compared with $1,728.8 million in 1997 and
$1,583.0 million in 1996).  Total income increased 8% and 4% in 1998 and
1997, respectively excluding Fidelity.

Income from finance charges and interest increased 17% in 1998 and 6% in
1997 ($1,498.7 million in 1998 compared with $1,282.6 million in 1997 and
$1,208.8 million in 1996).  Income from finance charges and interest
increased 6% in 1998 and remained unchanged in 1997 excluding Fidelity.
Changes in income from finance charges and interest result primarily from
(1) changes in the amount  of finance receivables outstanding and (2)
changes in the rate of charge on those receivables.


Increase (decrease) in average
  finance receivables outstanding:       1998      1997      1996
    U.S. consumer finance                  0%       (1)%        8%
   Canadian consumer finance              36        17         11
   Automobile finance                    136       156         29
   Other                                  22        (2)         2
     Total                                20         8          9


Rate of charge on finance receivables:   1998      1997      1996
   U.S consumer finance                 19.63%    20.29%    20.54%
   Canadian consumer finance            25.13     25.79     27.22
   Automobile finance                   20.02     20.57     20.03
   Other                                14.49     13.76     14.73
     Total                              19.97     20.42     20.69

The increases in income from finance charges and interest in both 1998 and
1997 were due primarily to growth in average receivables outstanding.   
This was offset in part by the decline in the rate of charge.  Growth in
average receivables for all segments in 1998, 1997, and 1996 was due 
primarily to various acquisitions combined with regular business activity.
The majority of the increase in Canadian consumer finance average receivables
in 1998 was due to the acquisition of TEAC and NRCS, effective  April  21, 
1998.  The majority of the increase in automobile finance average receivables
in 1998 and 1997 was due to the acquisition of Fidelity, effective August 31,
1997, along with a capital contribution by the Parent to the Company, of the
issued and outstanding shares of capital stock of Reliable, effective 
June 30, 1998.  The majority of the increase in other average receivables
in 1998 was due to significant receivable growth of Norwest Financial
Preferred Capital, Inc., a subsidiary of the Company which began rediscounting
to commercial entities in 1997.  Changes in the earned rates of charge were
due to changes in prevailing market rates combined with a change in the
portfolio mix.

<PAGE> 20

Insurance premiums and commissions increased 20% in 1998 and 28% in 1997
($280.2 million in 1998 compared with $232.9 million in 1997 and $182.3
million in 1996).  The increases were due to increases in insurance premiums
and commissions on multiple peril crop insurance.  Insurance losses and loss 
expenses increased 41% in 1998 and 74% in 1997 ($177.2 million in 1998 
compared to $125.8 million in 1997 and $72.3 million in 1996.)  The increases
were due primarily to increased insurance losses and loss expenses on
multiple peril crop insurance.  Multiple peril crop insurance is a 
government-sponsored program.  The Company's profit or loss from its multiple
peril crop insurance is determined after the crop season ends on the basis
of a profit sharing formula established by law and the Risk Management 
Agency, a division of the United Stated Department of Agriculture.  The 
profit or loss on multiple peril crop  insurance is primarily recognized in 
the third and fourth quarters of the calendar year.  During the past several
years the Company has been increasing the amount of multiple peril crop
insurance premiums retained. Insurance premiums and commissions on multiple
peril crop insurance were $145.1 million in 1998, $94.5  million in  1997,
and $41.8 million in 1996.  Insurance losses and loss expenses on multiple
peril crop insurance were $133.4  million in 1998, $85.9 million in 1997, 
and $36.4 million in 1996.

Other income increased 6% in 1998 and 11% in 1997 ($226.9 million in 1998
compared with $213.3 million in 1997 and $191.9 million in 1996).  The
increase in 1998 was due primarily to increases in investment income, income
from affiliates, income generated from the origination and sale of certain
loans, and gains from the sale of branches and other assets partially offset  
by a reduction in net gains on the sale of marketable securities.  In 1997
the increase was due to increases in net gains on the sale of marketable
securities combined with increases in investment income and income from
affiliates.  Income from affiliates was $63.2 million in 1998, $58.2 million
in 1997, and $54.4  million in 1996.  The increase in income from affiliates
corresponds with the increase in average notes receivable - affiliates  
combined with increased management fees charged to affiliates.  Investment
income was $73.6 million in 1998, $65.5 million in 1997, and $52.8 million 
in 1996.  The increases were due primarily to increases in average
investments.  Net gains on the sale of marketable securities were $5.0 
million in 1998, $16.9 million in 1997, and $9.3 million in 1996.

Operating expenses increased 23% in 1998 and 7% in 1997 ($678.2 million in 
1998 compared with $551.8 million in 1997 and $514.9 million in 1996).  A
breakdown of operating expenses between salaries and benefits and all other
operating expenses is shown below:

                                     1998        1997         1996
Salaries and benefits              $390,263    $323,361     $307,234
All other operating expenses        287,934     228,468      207,656

    Total                          $678,197    $551,829     $514,890

The increase in operating expenses was due primarily to increases in 
employee compensation and benefits and  other costs resulting from
business expansion including the addition of Fidelity in 1997 and other 
acquisitions in 1998.

<PAGE> 21

Interest and debt expense increased 21% in 1998 and 8% in 1997 ($485.8 
million in 1998 compared with $401.7 million in 1997 and $372.9 million
in 1996).  Changes in interest and debt expense result primarily from 
(1) change in the amount of borrowings outstanding and (2) changes in 
the cost of those borrowings.

Increase in average debt outstanding:       1998      1997
    Short-term                               19%       10%
    Long-term                                18        10
    Total                                    19        10

Cost of funds:                 1998         1997      1996
    Short-term                 5.59%        5.30%     5.36%
    Long-term                  6.74         6.83      6.90
    Total                      6.40         6.37      6.44


Changes in average debt outstanding result primarily from the change in
average finance receivables outstanding combined with the change in notes
receivable - affiliates.  Average finance receivables and average notes
receivable - affiliates combined increased 18% in 1998 and 9% in 1997.

Provision for credit losses increased 29% in 1998 and 19% in 1997 ($304.3
million in 1998 compared with $235.9 million in 1997 and $198.5 million
in 1996).  During the fourth quarter of 1998 the Company reviewed its
policies involving the write-off of receivables that are a predetermined 
number of days delinquent.  As a result of the review, the Company made
several changes in its policies to reflect current trends and expectations.
The changes resulted in additional consumer write-offs of $37.4 million.
Excluding the additional fourth quarter write-offs, provision for credit
losses increased 13% in 1998.  Increases in average finance receivables
outstanding contributed to the increase in the provision for credit losses.
Average finance receivables increased 20% in 1998 and 8% in 1997.  Net 
write-offs as a percentage of average net receivables outstanding were 4.01%
in 1998 compared with 3.63% in 1997 and 3.30% in 1996.  Excluding the
additional fourth quarter write-offs, net write-offs as a percentage of
average net receivables were 3.51% in 1998.  At December 31, 1998, the
Company had an allowance for credit losses of $351.0 million (4.24% of
receivables) compared with $297.8 million (4.19% of receivables) at 
December 31, 1997 and $169.1 million (2.84% of receivables) at December 31,
1996.  During 1998 the provision for credit losses exceeded net write-offs
by $3.4 million.  In addition, $49.8 million in allowance for credit losses
related to receivables acquired or contributed accounted for the remainder
of the increase in the allowance for credit losses.  During 1997 the
provision for credit losses exceeded net write-offs by $8.2 million. In
addition, $120.5 million in allowance for credit losses related to receivables
acquired or contributed accounted for the remainder of the increase in the
allowance for credit losses.  There were no material changes in estimation
methods and assumptions during 1998 and 1997.  Management believes the 
allowance for credit losses at December 31, 1998, is adequate to absorb 
expected losses in the finance receivables portfolio.

Income taxes decreased 16% in 1998 and 3% in 1997.  Earnings before income
taxes decreased 13% in 1998 and 3% in 1997.  The effective tax rates were 
33.8% in 1998, 34.8%  in  1997, and  34.9% in 1996.

Borrowings constitute the largest part of Norwest Financial's capitalization.  
At December 31, 1998, 84% of the Company's capital had been obtained from
borrowings and 16% from stockholder's equity.  Sixty-three percent of Norwest
Financial's borrowings was in fixed-rate term borrowings with original 
maturities of more than one year.  The remaining 37% includes commercial
paper with maturities of nine months or less (32%) and short-term debt to
affiliates and other short-term debt (5%).  At December 31, 1997, short-term
borrowings comprised 30% of total borrowings.  This consisted of commercial
paper with maturities of nine months or less (22%) and short-term debt to
affiliates and other short-term debt (8%).  Short-term borrowings as a 
percent of total borrowings averaged 30% in 1998 and 1997.

<PAGE> 22

The Company  maintains bank lines of credit and revolving credit agreements
to provide an alternative source of liquidity to support the Company's 
commercial paper borrowings.  At December 31, 1998, lines of credit and
revolving credit agreements totaling $1,821 million were being maintained at
32 domestic and international banks; the entire amount was available on that
date.  Additionally, the Company's bank subsidiaries, Dial Bank and Dial 
National Bank, have access to federal funds borrowings.  At December 31,
1998, federal funds availability at the two banks was $400 million.

The Company and a Canadian subsidiary obtain long-term debt capital primarily
from the issuance of debt securities to the public through underwriters on a
firm-commitment basis and the issuance of debt securities to institutional
investors.  The Company and a Canadian subsidiary also obtain long-term debt
from the issuance of medium-term notes (which have maturities ranging from
nine months to 30 years) through underwriters (acting as agent or principal).

The Company anticipates the continued availability of borrowed funds, at 
prevailing interest rates, to provide for Norwest Financial's growth in the
foreseeable future.  Funds are also generated internally from payments of
principal and interest on Norwest Financial's finance receivables.

During 1998, Norwest Financial continued with its company-wide project to
prepare Norwest Financial's systems for Year  2000 compliance.  The Year
2000 issue relates to computer systems that use two digits rather than four
to define the applicable year and whether such systems will properly process
information when the year changes to 2000.  "Systems" include all hardware,
networks, system and application software, and commercial "off the  shelf"
software, and embedded technology such as properties/date impacted processors
in automated systems such as elevators, telephone systems, security, heating
and cooling systems and others.  Priority is given to "mission critical"
systems.  A system is considered "mission critical" if it is vital to the
successful continuation of a core business activity.

The implementation of Norwest Financial's Year 2000 readiness project is
divided into four principal phases:  Phase I requires a comprehensive
assessment and inventory of all applicable software, system hardware devices,  
data and voice communication devices and other embedded technology to 
determine Year 2000 vulnerability and risk; Phase II requires date detection
on systems intended to determine which systems must be remediated and which 
systems are compliant and require testing only, determination of the 
resources and costs, and the development of schedules and high level testing
plans and schedules for the repair, replacement and/or retirement of systems
that are determined not to be compliant.  Phase III requires repair, 
replacement and/or retirement of systems that are determined not to be Year
2000 compliant, and planning the integration testing for  those systems that
have interfaces with other systems both internal and external to Norwest
Financial, such as customers/suppliers; and Phase IV requires integration
testing on applicable systems to validate that interfaces are Year 2000
compliant and contingency planning.

<PAGE> 23

Norwest Financial may be affected by the Year 2000 compliance issues of 
governmental agencies, business and other entities who provide data to, or
receive data from, Norwest Financial, and by entities, such as borrowers,
vendors, customers and business partners, whose financial condition or
operational capability is significant to Norwest Financial.  Norwest 
Financial's Year 2000 project also includes assessing the Year 2000 readiness
of certain customers, borrowers, vendors, business partners, counterparties
and governmental entities and the testing of major external interfaces with
third parties which Norwest Financial has determined are critical.  Norwest 
Financial is primarily engaged in the consumer and automobile finance
business.  The average balance outstanding with any individual customer is
not significant.  As a result Norwest Financial does not plan to test the
Year 2000 compliance of any borrowers.  Norwest Financial has tested 
mainframe software packages included in the company's systems.  It does not
plan to directly test the Year 2000 compliance of its other major vendors.
Instead, Norwest Financial is obtaining representations and warranties of the
Year 2000 compliance of its major vendors.  In addition to assessing the
readiness of these external parties, Norwest Financial is developing 
contingency plans which will include recovery plans and alternatives to 
mitigate the effects of counterparties whose own failure to properly address
Year  2000 issues may adversely impact Norwest Financial's ability to perform
mission critical functions.  These contingency plans are currently being 
developed and are expected to be substantially completed by June 30, 1999.
The Company has not used any independent verification and validation 
processes in determining its Year 2000 compliance.

Norwest Financial has substantially completed Phases I, II, and III of its
Year 2000 project.  Phase IV for all mission critical systems is anticipated
to be completed by June  30, 1999.  In the area of embedded technology, or
non-information technology systems,  Norwest  Financial has completed 
Phases I, II and III of the Year 2000 project.  The Company believes all
mission critical embedded technology is Year 2000 compliant.

Through December 31, 1998, Norwest Financial has incurred charges of $4.3
million related to its Year 2000 project.  This represents less than 10% of
its information technology  budget.  Charges include $3.1 million related to
the cost of internal staff redeployed to the Year 2000 project, as well as
$.5 million for external consulting costs and $.7  million for costs of
accelerated replacement of hardware and software due to Year 2000 issues.
Norwest Financial currently estimates that its total cost for the Year 2000
project will be $5.4 million.  The redeployment of internal staff has not
delayed other information technology projects, and thus will not have an
impact on the financial condition or results of operations.

The foregoing paragraphs contain a number of forward-looking statements. 
These statements reflect management's best current estimates, which were
based on numerous assumptions about future events, including the continued
availability of certain resources, representations received from third party
service providers and other third parties, and additional factors.  There can
be no guarantee that these estimates, including Year 2000 costs, will be
achieved, and actual results could differ materially from those estimates.

A number of important factors could cause management's  estimates and the
impact of the Year 2000 issue to differ materially from what is described
in the forward-looking statements contained in the above paragraphs.  Those
factors include, but are not limited to,  uncertainties in the costs of 
hardware and software, the availability and cost of programmers and other
systems personnel, inaccurate or incomplete execution of the phases,
ineffective remediation of computer code and the ability of Norwest 
Financial's customers, vendors, competitors and counterparties to effectively 
address the Year 2000 issue.

If Year 2000 issues are not adequately addressed by Norwest Financial and
significant third parties,  Norwest Financial's business, results of 
operations and financial position could be materially adversely affected.
Failure of certain vendors to be Year 2000 compliant could result in 
disruption of important services upon which Norwest Financial depends,
including, but not limited to, such services as telecommunications,  
electrical power and data processing.  The failure of loan customers to
properly prepare for the Year 2000 could also result in increases in
problem loans and credit losses in future years.  Notwithstanding Norwest 
Financial's  efforts, there can be no assurance that Norwest Financial or
significant third party vendors or other significant third parties will 
adequately address their Year 2000 issues.  Norwest Financial is continuing 
to assess the Year 2000 readiness of third parties but does not know at this
time whether the failure of third parties to be Year 2000  compliant will 
have a material effect on results of operations, liquidity and financial
condition.

<PAGE> 24

The forward-looking statements made in the foregoing Year 2000 discussion
speak only as of the date on which such statements are made, and  Norwest
Financial undertakes no obligation to update any forward-looking statement
to reflect events or circumstances after the date on which such statement
is made to reflect the occurrence of unanticipated events.

The Company adopted on January 1, 1998, Statement of Financial Accounting
Standards ("FAS") No. 130, "Reporting Comprehensive Income".  This Statement  
sets standards for reporting and displaying comprehensive income and its
components in the financial  statements.  It requires that a company 
classify items of other comprehensive income, as defined by accounting
standards, by their nature in the financial statements.  Other comprehensive
income, as defined, is net of income taxes.  Accumulated other comprehensive
income is displayed separately in the equity section of the balance sheet
and the consolidated statement of changes in stockholder's equity.  For
comparative purposes financial statements for earlier periods provided have 
been reclassified.

The Company adopted on December 31, 1998, FAS 131, "Disclosures about
Segments of an Enterprise and Related Information".  The Statement requires 
that a public business enterprise report financial and descriptive
information about its reportable operating segments on the basis that is used
internally for evaluating segment performance and deciding how to allocate
resources to segments.

The Company adopted on December 31, 1998, FAS 132, "Employer's Disclosures
about Pensions and Other Postretirement Benefits".  The Statement only 
addresses disclosure issues; it does not address measurement and recognition
of pensions and other postretirement benefits.  This Statement requires the
reconciliation of changes in benefit obligations and plan assets for both
pensions and other postretirement benefits, showing the effects of the
major components separately for each reconciliation.

In June 1998, the Financial Accounting Standards Board issued FAS 133,
"Accounting for Derivative Instruments and Hedging Activities", which will
be effective for the Company's financial statements for periods beginning
January 1, 2000.  This Statement requires companies to record derivatives
on the balance sheet, measured at fair value.  Changes in the fair values
of those derivatives would be accounted for depending on the use of the
derivative and whether it qualifies for hedge accounting.  The key criterion
for hedge accounting is that the hedging relationship must be highly
effective in achieving offsetting changes in fair value or cash flows. 
The Company has not yet determined when it will implement FAS 133 nor has it
completed the analysis required to determine the impact on the financial
statements.

<PAGE> 25

Item 7A.   Quantitative and Qualitative Disclosure About Market Risk

Interest Sensitivity Risk

Interest sensitivity risk is the risk that future changes in interest
rates will reduce net interest income or the market value of the balance 
sheet.

Norwest Financial is subject to the risk of fluctuating interest rates in
the normal course of business primarily in finance receivables, securities
available for-sale, and both short-term and long-term debt.  Each of these
balance sheet categories will be discussed individually.

Finance Receivables:

The interest rates on receivables outstanding at December 31, 1998 and 1997,
are consistent with the current rates at which similar loans would be made
to borrowers with similar credit ratings and for the same remaining 
maturities.  As a result, the carrying value is a reasonable estimate of 
fair value.  Expected maturities presented below differ from contractual  
maturities since it is the Company's experience that a substantial portion
of the consumer receivable portfolio is renewed or repaid before contractual 
maturity dates.

<TABLE>
<CAPTION>

December 31, 1998:
                      1999     2000    2001    2002    2003   Thereafter   Total   Fair Value
(In Millions)
<S>                   <C>      <C>     <C>     <C>     <C>      <C>         <C>      <C>                   <C>     <C>
Finance receivables   $4,123   $1,403  $931    $682    $329     $802        $8,270   $8,270

Average earned rate   19.15%   19.88%  19.85%  20.28%  20.31%   21.68%      19.74%


December 31, 1997:
                      1998     1999    2000    2001    2002    Thereafter   Total    Fair Value
(In Millions)

Finance receivables   $3,610   $1,143  $791    $553    $267     $750        $7,114   $7,114
Average earned rate   19.51%   21.48%  21.22%  22.10%  22.34%   22.51%      20.64%

</TABLE>

Securities Available-for-Sale:

Norwest Financial does not use derivative financial instruments in its
investment portfolio.  Norwest Financial's investment policy only allows
for purchases in investment grade securities.  In addition, the investment
policy also limits the amount of credit exposure to any one issue, issuer 
and type of investment.  Norwest Financial does not expect any material loss
with respect to its investment portfolio.  Maturities for securities 
available for-sale shown below are at amortized cost and are based on 
contractual maturities for all debt securities except for mortgage backed
federal agencies and collateralized mortgage obligations, which are based
on expected maturities.

<PAGE> 26

<TABLE>
<CAPTION>

(In Millions)

December 31, 1998:
                       1999    2000   2001    2002   2003  Thereafter  Total  Fair Value
<S>                    <C>     <C>    <C>     <C>    <C>   <C>         <C>    <C>
U.S. Treasury and
 Federal Agencies      $15     $12     $8     $17    $16      $60       $128      $133
Average Yield          7.05%   6.90%   6.94%  7.15%  6.95%    7.23%     7.12%
States and Political
 Subdivisions           $5     $26     $33    $23    $21      $177      $285      $299
Average Yield          4.36%   4.73%   4.57%  4.66%  4.45%    4.60%     4.59%
Mortgage Backed
 Federal Agencies      $41     $35     $34    $39    $42      $61       $252      $255
Average Yield          7.34%   6.95%   6.95%  6.95%  6.95%    6.73%     6.99%

Collateralized Mortgage
 Obligations            $1      $1      $0     $0     $1       $2         $5      $5
Average Yield          9.26%   8.75%   8.75%  8.75%  8.75%    6.95%     7.99%

Equity Securities                                              $89       $89      $93
Average Yield                                                 2.94%     2.94%

All Other Securities   $60     $73     $46    $44    $80      $107      $410      $419
Average Yield          6.91%   6.61%   6.74%  6.86%  6.49%    6.73%     6.71%
December 31, 1997:
                       1998    1999    2000   2001   2002   Thereafter  Total   Fair Value
U.S. Treasury and
 Federal Agencies      $33     $10     $12    $12     $8      $89       $164      $169
Average Yield          6.59%   6.99%   6.86%  7.24%  6.82%    7.34%     7.06%

States and Political
 Subdivisions          $10     $3      $25    $29    $15      $136      $218         $225
Average Yield          5.05%   6.40%   4.81%  4.68%  4.91%    5.32%     4.81%

Mortgage Backed
 Federal Agencies      $48     $46     $45    $43    $41      $52       $275         $278
Average Yield          7.32%   6.97%   6.97%  6.97%  6.97%    7.17%     7.06%

Collateralized Mortgage
 Obligations           $1      $1      $1     $1     $1       $3        $8           $8
Average Yield          8.44%   8.69%   8.69%  8.69%   8.69%   7.32%     8.17%

Equity Securities                                             $93       $93          $96
Average Yield                                                 3.71%     3.71%

All Other Securities   $46     $35     $48    $33    $40      $79       $281         $288
Average Yield          7.11%   7.60%   7.40%  7.11%  6.76%    7.50%     7.27%

</TABLE>

<PAGE> 27

Short-Term and Long-Term Debt:

The table below provides information about Norwest Financial's debt
instruments.  All long-term debt is fixed rate.  The table shows principal
cash flows and related weighted average interest rates by expected maturity
dates.  The information is presented in U.S. dollars which is the Company's
reporting currency.  The instruments' actual cash flows are denominated in
U.S. dollars, Canadian dollars, and Argentine pesos.

<TABLE>
<CAPTION>

(In Millions
of U.S. Dollars)

December 31, 1998:
                            1999    2000   2001  2002  2003  Thereafter  Total   Fair Value
<S>                        <C>     <C>   <C>    <C>   <C>    <C>         <C>     <C>   
Short-Term Debt - U.S:
 Debt Outstanding          $2,660                                        $2,660   $2,660
 Average Interest Rate       5.48%                                         5.48%

Short-Term Debt - Canada:
 Debt Outstanding           $384                                           $384     $384
 Average Interest Rate      5.06%                                          5.06%

Short-Term Debt - Argentina:
 Debt Outstanding            $50                                            $50      $50
 Average Interest Rate      9.88%                                          9.88%

Long-Term Debt - U.S.:
 Debt Outstanding           $835    $754   $404   $654   $653  $1,400    $4,700   $4,857
 Average Interest Rate      6.33%   6.75%  6.68%  6.93%  6.16%   6.76%    6.62%

Long-Term Debt- Canada:
 Debt Outstanding           $107    $131   $98    $46    $94     $98      $573     $580
 Average Interest Rate      7.75%   6.49%  5.83%  5.50%  5.53%   5.76%    6.25%
December 31, 1997:
                             1998   1999   2000   2001   2002 Thereafter  Total Fair Value
Short-Term Debt - U.S:
 Debt Outstanding          $1,957                                         $1,957  $1,957
 Average Interest Rate      5.75%                                          5.75%

Short-Term Debt - Canada:
 Debt Outstanding           $270                                           $270     $270
 Average Interest Rate      4.05%                                           4.05%

Long-Term Debt - U.S.:
 Debt Outstanding           $414    $835   $754   $404   $654    $1,853    $4,914   $4,992
 Average Interest Rate      6.57%   6.33%  6.75%  6.68%  6.93%     6.70%     6.66%
Long-Term Debt- Canada:
 Debt Outstanding            $73     $80    $84     $35    $35      $307            $310
 Average Interest Rate      6.36%   7.21%  5.77%   6.05%  5.50%     6.29%

</TABLE>

<PAGE> 28

Foreign Currency Exchange Rate Risk

The amount invested in subsidiaries and translated into U.S. dollars using
the year-end exchange rate was $93 and $117 million at December 31, 1998
and 1997, respectively.  All investments in subsidiaries were denominated
in either Canadian dollars or Argentine pesos.  The potential loss in fair
value resulting from a hypothetical 10% adverse change in quoted foreign
currency exchange rates amounts to $9 and $12 million at December 31, 1998
and 1997, respectively.  Actual results may differ.  Canadian operations
are funded with borrowings in Canadian dollars and Argentine operations 
are funded primarily with borrowings in Argentine pesos.


<PAGE> 29

Item 8.  Financial Statements and Supplementary Data.

Deloitte & Touche LLP

(logo                   Two Prudential Plaza          Telephone:(312) 946-3000
                        180 North Stetson Avenue      Facsimile:(312) 946-2600
                        Chicago, Illinois  60601-6779




INDEPENDENT AUDITORS' REPORT

Norwest Financial, Inc.:

We have audited the accompanying consolidated balance sheets of Norwest
Financial, Inc. (a wholly-owned subsidiary of Norwest Financial Services,
Inc. which is a wholly-owned subsidiary of Wells Fargo & Company) and
subsidiaries as of December 31, 1998 and 1997, and the related consolidated
statements of income, comprehensive income, cash flows and stockholder's
equity for each of the three years in the period ended December 31, 1998.
These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial 
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free
of material misstatement.   An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a 
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Norwest Financial, Inc. and
subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles.





January 18, 1999
Chicago, Illinois



Deloitte Touche
Tohmatsu



<PAGE> 30

                     NORWEST FINANCIAL, INC.

                   Consolidated Balance Sheets

                     (Thousands of Dollars)

                     

                     

<TABLE>     
<CAPTION>
                                             December 31,
                                          1998            1997
<S>                                    <C>            <C>
Assets

Cash and cash equivalents              $  139,184     $   94,600

Securities available-for-sale           1,203,500      1,063,600

Finance receivables:

 Consumer:
  Loans                                 4,088,502      3,893,550
  Sales finance contracts               3,111,800      2,332,535
  Credit cards                            500,616        422,435
   Commercial                             569,309        465,601
                         
     Total finance receivables          8,270,227      7,114,121
                         
   Less allowance for credit losses       350,984        297,800
                          
     Finance receivables - net          7,919,243      6,816,321


Notes receivable - affiliates             499,123        646,832

Property and equipment (at cost, less
 accumulated depreciation of $135,105
 for 1998 and $107,435 for 1997)          187,695        102,537

Deferred income taxes                      60,717         64,420

Other assets                              506,745        533,614

     Total assets                     $10,516,207     $9,321,924

</TABLE>







See accompanying notes to consolidated financial statements. 

<PAGE> 31

                       NORWEST FINANCIAL, INC.
                     
                         
                     Consolidated Balance Sheets
                         
                       (Thousands of Dollars)
                                           
<TABLE>
<CAPTION>               
                                                    December 31,
                                              1998               1997
<S>                                          <C>                <C>                                    
Liabilities and
Stockholder's Equity

Loans payable - short-term:
 Commercial paper                             $2,662,321        $1,664,796
 Affiliates                                      194,453           392,165
 Other                                           237,467           170,000
Unearned insurance premiums and commissions      132,793           143,478
Insurance claims and policy reserves              29,750            30,566
Accrued interest payable                          96,482            93,344
Other payables to affiliates                      44,173            13,815
Other liabilities                                280,737           228,557
Long-term debt                                 5,272,818         5,221,413

     Total liabilities                         8,950,994         7,958,134
 
Commitments and contingencies (notes 6 and 10)

Stockholder's equity:
 Common stock without par value 
 (authorized 1,000 shares, issued 
 and outstanding 1,000 shares)                     3,855             3,855

 Additional paid in capital                      189,438           185,410
                         
   Retained earnings                           1,362,370         1,167,418
                         
 Accumulated other comprehensive 
  income, net of income taxes,                     9,550             7,107

     Total stockholder's equity                1,565,213         1,363,790

     Total liabilities and
     stockholder's equity                    $10,516,207        $9,321,924


</TABLE>

See accompanying notes to consolidated financial statements. 

<PAGE> 32

                        NORWEST FINANCIAL, INC.
 
                    Consolidated Statements of Income

                         (Thousands of Dollars)

<TABLE>
<CAPTION>                          

                                           Years Ended December 31,
                                       1998           1997        1996

<S>                                 <C>            <C>            <C>

Income:
 Finance charges and interest       $1,498,692     $1,282,576     $1,208,794
 Insurance premiums and commissions    280,207        232,890        182,259
Other income                           226,866        213,330        191,940

     Total income                    2,005,765      1,728,796      1,582,993
Expenses:
 Operating expenses                    678,197        551,829        514,890
 Interest and debt expense             485,784        401,736        372,859
 Provision for credit losses           304,274        235,877        198,480
 Insurance losses and loss expenses    177,238        125,822         72,337
                           
     Total expenses                  1,645,493      1,315,264      1,158,566

     Net income before income taxes    360,272        413,532        424,427

Income taxes                           121,668        144,082        148,096

     Net income                     $  238,604     $  269,450     $  276,331




</TABLE>



See accompanying notes to consolidated financial statements. 

<PAGE> 33

                      NORWEST FINANCIAL INC.
  
            Consolidated Statements of Comprehensive Income 

                      (Thousands of Dollars)
                      

                        
<TABLE>
<CAPTION>
                                       Years Ended December 31,
     
                                      1998        1997        1996
<S>                                 <C>         <C>         <C>
Net income                          $238,604    $269,450    $276,331

Other comprehensive income,
 before income taxes:
 Unrealized gains (losses) on
   securities available-for-sale:
   Unrealized gains arising during 
   the period                         15,838      26,305         962
   Less:  reclassification  
    adjustment for net gains 
    included in net income             4,963      16,873       9,276

                                      10,875       9,432      (8,314)

Foreign currency translation 
 adjustment                           (4,773)     (2,766)       (598)

Other comprehensive income 
 (loss) before income taxes            6,102       6,666      (8,912)
                          
Income tax expense (benefit)
 related to unrealized gains 
 (losses) on securities
 available-for-sale                    3,659       3,273       (3,016)

Other comprehensive income 
 (loss), net of income taxes           2,443       3,393       (5,896)
                           
Comprehensive income                $241,047    $272,843     $270,435



</TABLE>

See accompanying notes to consolidated financial statements. 


<PAGE> 34
                           NORWEST FINANCIAL, INC.
         
                    Consolidated Statements of Cash Flows
         
                            (Thousands of Dollars)

<TABLE>
<CAPTION>                                      
                                                Years Ended December 31,
                                               1998       1997       1996
<S>                                        <C>        <C>         <C>
Cash flows from operating activities:
Net income                                    $238,604   $269,450   $276,331
 Adjustments to reconcile net income to
  net cash flows from operating activities,
  net of effect of contributed subsidiaries:
  Provision for credit losses                  304,274    235,877    198,480
  Depreciation and amortization                 47,768     34,906     27,613
  Deferred income taxes                          7,549     25,104      8,632
  Other receivables from affiliate                                    31,643
  Other assets                                   7,649    (41,308)    30,925
  Unearned insurance premiums and commissions  (10,685)     6,076     (3,456)
  Insurance claims and policy reserves            (816)   (18,689)     1,210
  Accrued interest payable                       3,138     15,578     (1,151)
  Other payables to affiliates                  28,601      8,250      5,565
  Other liabilities                             39,704      3,604      6,002

Net cash flows from operating activities       665,786    538,848    581,794

Cash flows used for investing activities:
 Finance receivables:
  Principal collected                        6,689,362  5,665,098  5,587,314
  Receivables originated or purchased       (7,808,023)(5,955,306)(5,889,870)
 Proceeds from sales of securities             146,510    136,041    145,791
 Proceeds from maturities of securities        155,602     82,523     65,296
 Purchase of securities                       (431,137)  (419,456)  (279,090)
 Net additions to property and equipment       (98,522)   (39,240)   (25,626)
 Net increase in notes receivable - affiliates,
  net of effect of contributed subsidiaries   (122,910)(1,172,888)   (22,339)
 Cash and cash equivalents of contributed
  subsidiaries received                            503      3,258
    Other                                      (47,810)   (82,507)   (37,763)
                               
Net cash flows used for 
  investing activities                      (1,516,425)(1,782,477)  (456,287)
Cash flows from financing activities:
  Net increase in loans payable - short-term   867,280    126,860    141,618
  Proceeds from long-term debt - senior        583,271  1,805,279    525,000
 Repayments of long-term debt:
  Senior                                      (503,328)  (735,873)  (308,424)
  Subordinated                                  (2,000)   (50,000)  (165,000)
 Additional paid in capital                               112,000
    Dividends paid                             (50,000)   (61,729)  (250,000)
                               
Net cash flows from (used for) 
  financing activities                         895,223  1,196,537    (56,806)

Net increase (decrease) in cash 
  and cash equivalents                          44,584    (47,092)    68,701

Cash and cash equivalents beginning of year     94,600    141,692     72,991

Cash and cash equivalents end of year       $  139,184    $94,600  $ 141,692

</TABLE>
See accompanying notes to consolidated financial statements.
        

<PAGE> 35
                          NORWEST FINANCIAL, INC.

              Consolidated Statements of Stockholder's Equity

                          (Thousands of Dollars)
<TABLE>
<CAPTION>
                                                             Accumulated Other
                                                           Comprehensive Income
                                                                   Unrealized Gains
                                    Additional             Foreign   on Securities
                              Common  Paid In   Retained   Currency  Available
                              Stock   Capital   Earnings Translation for-Sale     Total
<S>                           <C>     <C>        <C>       <C>        <C>       <C> 

Balance, December 31, 1995    $3,855  $ 90,766   $933,366   $(5,393)  $15,003   $1,037,597

Comprehensive income:
 Net income                                       276,331                          276,331
Other                                                          (598)   (5,298)      (5,896)
                               
Dividends                                        (250,000)                        (250,000)

Balance, December 31, 1996     3,855    90,766    959,697     (5,991)   9,705    1,058,032

Comprehensive income:
 Net income                                       269,450                          269,450
 Other                                                       (2,766)   6,159         3,393
                               
Paid in capital                        112,000                                     112,000

Contributed subsidiary                 (17,356)                                    (17,356)

Dividends                                        (61,729)                          (61,729)

Balance, December 31, 1997     3,855   185,410  1,167,418     (8,757)  15,864    1,363,790

Comprehensive income:
 Net income                                       238,604                          238,604
 Other                                                        (4,773)   7,216        2,443
                               
Contributed subsidiary                   4,028      6,348                           10,376

Dividends                                         (50,000)                         (50,000)

Balance, December 31, 1998    $3,855  $189,438 $1,362,370  $(13,530) $23,080    $1,565,213


</TABLE>

See accompanying notes to consolidated financial statements.<


<PAGE> 36



                     NORWEST FINANCIAL, INC.

           Notes to Consolidated Financial Statements


1. Significant Accounting Policies.

Principles of Consolidation.  The consolidated financial statements include
the accounts of Norwest Financial, Inc. (the "Company") and subsidiaries
(collectively, "Norwest Financial"). Intercompany accounts and transactions
are eliminated.  The Company is a wholly-owned subsidiary of Norwest Financial
Services, Inc. (the "Parent").  On November 2, 1998, Norwest Corporation,
the parent of Norwest Financial Services, Inc., changed its name to Wells
Fargo & Company ("Wells Fargo") upon the merger of the former Wells Fargo &
Company into a wholly-owned subsidiary of Norwest Corporation.  The parent
is now a wholly-owned subsidiary of Wells Fargo.

In October 1998, two of the Company's automobile finance subsidiaries,
Community Credit Co. and Fidelity Acceptance Corporation, acquired $320 
million in automobile sales finance contracts from Sunstar Acceptance 
Corporation, a division of NationsBank.

Effective June 30, 1998, the Parent made a capital contribution, without
consideration, to the Company of the issued and outstanding shares of capital
stock of Reliable Financial Services, Inc. ("Reliable").  This capital
contribution was accounted for as a merger of interests under common control.
Reliable's headquarters are in San Juan, Puerto Rico and its principal 
business is automobile finance.  Reliable had finance receivables outstanding
of $293 million at the time of the contribution.

Effective April 21, 1998, one of the Company's Canadian subsidiaries acquired
all of the issued and outstanding shares of capital stock of The T. Eaton
Acceptance Co. Limited ("TEAC") and National Retail Credit Services Limited
("NRCS"). The acquisition was accounted for as a purchase.  TEAC and NRCS are
headquartered in Toronto, Ontario and are primarily engaged in purchasing
sales finance contracts.  TEAC and NRCS had finance receivables outstanding
of $305 million at the time of the acquisition.

Effective January 7, 1998, the Company, through its wholly-owned subsidiary,
Finvercon USA, Inc., acquired Finvercon S.A.  Compania Financiera
("Finvercon").  The acquisition was accounted for as a purchase.  Funding
necessary for this acquisition was provided to Finvercon USA, Inc. by the
Company.  Finvercon is engaged in consumer finance from its office in 
Buenos Aires, Argentina and had receivables outstanding of $33 million at
the time of acquisition.

Effective August 31, 1997, Norwest Corporation, through its wholly-owned
subsidiary, Fidelity Acceptance Holding, Inc. ("FAHI"), acquired Fidelity
Acceptance Corporation.  The acquisition was accounted for as a purchase.
Funding necessary for this acquisition (totaling approximately $1.1 billion)
was provided via a term loan to FAHI by the  Company.  Effective September 2,
1997, Norwest Corporation made a capital contribution, without consideration,
of all the issued and outstanding shares of capital stock of FAHI to the
Parent.  Immediately thereafter, the Parent made a capital contribution,
without consideration, of all the issued and outstanding shares of capital
stock of FAHI to the Company.  This capital contribution was accounted for
as a merger of interests under common control and resulted in a reduction in
additional paid in capital of approximately $17.4 million.

Securities Available-for-Sale.  Debt and equity securities are classified
as available-for-sale.  Debt and equity securities classified as 
available-for-sale are reported at fair value with net unrealized gains and
losses, net of deferred income taxes, excluded from earnings and recorded as
a component of accumulated other comprehensive income until realized. If a
decline in the security's fair value is deemed to be other than temporary,
the amount of the write-down is recognized as a reduction in earnings.

<PAGE> 37
                     NORWEST FINANCIAL, INC.

      Notes to Consolidated Financial Statements, Continued


1. Significant Accounting Policies, Continued.

Finance Charges and Interest.  Finance charges and interest are earned
primarily using the interest method on an accrual basis.  Automobile finance
and commercial receivables that are past due for 90 days or more are placed
on non-accrual status.  When the receivable is placed on non-accrual status,
accrued and unpaid interest is charged against finance charges and interest.
All other finance receivables continue to accrue interest until the 
receivable is collected or written off.  When a receivable is written off,
accrued and unpaid interest is charged against finance charges and interest.

Loan Origination Fees and Costs.  Fees received and certain direct costs
incurred for the origination of receivables are deferred and amortized to
interest income over the contractual lives of the receivables using the 
interest method.

Unamortized amounts are recognized at the time receivables are paid in full.
Material discounts and premiums on purchased receivables are recognized over
the contractual life of the purchased receivable using a method that 
approximates the interest method.

Allowance for Credit Losses.  The allowance for credit losses is based on
loss experience in relation to finance receivables outstanding and is
established through a provision for  credit losses charged to expense.
The allowance is an amount that management believes will be adequate to 
absorb probable losses on existing receivables that may become uncollectible
based on evaluations of collectibility of receivables and prior credit
loss experience.

Finance receivables are written off when evaluated as uncollectible.  In
addition, consumer finance receivables in the United States are generally 
written off if no payment is applied during the three-month period 
immediately preceding the balance sheet date and the receivable is 90 days
or more contractually delinquent.  Automobile finance receivables are written
off when the receivable is 150 days or more contractually delinquent.  All
other receivables are generally written off when the receivable is 180 days 
or more contractually delinquent.

Property and Equipment.  Depreciation is provided for property and equipment
on a straight-line basis over their estimated useful lives, which are: 19 
to 39 years for buildings, 5 to 39 years for building equipment and 
improvements, and 3 to 8 years for furniture, fixtures and equipment.
Generally, leasehold improvements are amortized over five years or the
life of the lease whichever is shorter.  Maintenance and repairs of building
and office equipment (not significant in the aggregate) are charged to 
expense.   At the time assets are disposed of or are retired, the related
asset and accumulated depreciation or amortization are removed from the
respective accounts.  Gains and losses on dispositions are included in 
earnings.

Deferred Income Taxes.  Deferred income taxes reflect the impact of 
temporary differences between the amounts of assets and liabilities recorded
for financial reporting from the basis used for income tax purposes 
(note 10).  A valuation allowance is recognized if, based on the weight of
available evidence, it is more likely than not that some portion or all of
the deferred assets will not be realized.

Retirement Plans.  Retirement plans cover substantially all employees who
meet certain age and service requirements.  Norwest Financial's  funding
policy is to contribute no more than the maximum amount that can be deducted 
for federal income  tax purposes (note 11).

<PAGE> 38

                     NORWEST FINANCIAL, INC.
      Notes to Consolidated Financial Statements, Continued

1. Significant Accounting Policies, Continued.

Insurance Income and Expense.  Insurance premiums are recognized as income
over the terms of the policies. Premiums for credit life insurance are
recognized as revenue using a method that approximates the interest method.
Premiums for credit disability insurance, involuntary unemployment insurance,
and multiple peril crop insurance are recognized as revenue in relationship 
to anticipated claims.  Premiums and commissions from property insurance and  
non-filing insurance are recognized as revenue on a pro-rata basis.  Policy
acquisition expenses (principally ceding commissions) are deferred and
charged to expense over the terms of the related policies in proportion
to premium income recognition.

Foreign Currency Translation.  Assets and liabilities of the foreign 
operations are translated at the exchange rate as of the balance sheet date.
Foreign operating results are translated at the average exchange rates for
the period covered by the income statement.  The resulting translation
adjustments are recorded as a separate component of accumulated other 
comprehensive income.

Goodwill and Other Intangibles.  Goodwill represents the unamortized cost
of acquiring subsidiaries and other net assets in excess of the appraised
value of such net assets at the date of acquisition.  Goodwill is amortized
over a maximum 15-year period using the straight-line method.  Other
identifiable intangibles are amortized either on an accelerated basis or
straight-line, over various periods which do not exceed 15 years.

Use of Estimates.  The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those 
estimates.

Reclassifications.  Certain amounts in the 1997 and 1996 financial
statements have been reclassified to conform to the presentation used in 
the 1998 financial statements.

New Standards.  The Company adopted on January 1, 1998,  Statement of  
Financial Accounting Standards ("FAS") No. 130, "Reporting Comprehensive  
Income".  This Statement sets standards for reporting and displaying
comprehensive income and its components in the financial statements.
It requires that a company  classify items of other comprehensive income,
as defined by accounting standards, by their nature in the financial
statements.   Other comprehensive income, as defined, is net of income
taxes.  Accumulated other comprehensive income is displayed separately in
the equity section of the balance sheet and the consolidated statement of 
changes in stockholder's equity.  For comparative purposes, financial  
statements for earlier periods provided have been reclassified.

The Company adopted on December 31, 1998, FAS 131, "Disclosures about
Segments of an Enterprise and Related Information".  The Statement requires
that a public business enterprise report financial and descriptive
information about its reportable operating segments on the basis that is 
used internally for evaluating segment performance and deciding how to
allocate resources to segments.

The Company adopted on December 31, 1998, FAS 132, "Employer's Disclosures
about Pensions and Other Postretirement Benefits".  The Statement only
addresses disclosure issues; it does not address measurement and recognition
of pensions and other postretirement benefits.  This Statement requires
the reconciliation of changes in benefit obligations and plan assets for
both pensions and other postretirement  benefits, showing the effects of
the major components separately for each reconciliation.


<PAGE> 39

                     NORWEST FINANCIAL, INC.

      Notes to Consolidated Financial Statements, Continued


1. Significant Accounting Policies, Continued.

In June 1998, the Financial Accounting Standards Board issued FAS 133, 
"Accounting for Derivative Instruments and Hedging Activities", which 
will be effective for the Company's financial statements for periods
beginning January 1, 2000.  This Statement requires companies to record
derivatives on the balance sheet, measured at fair value.  Changes in the
fair values of those derivatives would be accounted for depending on the
use of the derivative and whether it qualifies for hedge accounting.
The key criterion for hedge accounting is that the hedging relationship
must be highly effective in achieving offsetting changes in fair value or
cash flows.  The Company has not yet determined when it will implement FAS 
133 nor has it completed the analysis required to determine the impact on
the financial statements.


2.    Securities Available-for-Sale.

The amortized cost and fair value of securities available-for-sale were:

                            December 31, 1998         December 31, 1997
                            Amortized     Fair        Amortized     Fair
(In Thousands)               Cost         Value         Cost       Value

U.S. Treasury and 
  federal agencies       $   127,882     $132,867      $164,239   $168,601
States and political 
  subdivisions               284,724      298,617       218,115    225,040
Mortgage-backed securities:
 Federal agencies            252,333      254,668       274,438    278,355
 Collateralized mortgage
   obligations                 4,800        4,916         8,267      8,453
                                   
 Total mortgage-backed 
   securities                257,133      259,584       282,705    286,808
Other (corporate bonds 
 and stocks)                 498,687      512,432       374,342    383,151

   Total                  $1,168,426   $1,203,500    $1,039,401 $1,063,600


The gross unrealized gains and losses of securities available-for-sale were:

                              December 31, 1998          December 31, 1997
                               Gross Unrealized           Gross Unrealized
(In Thousands)                 Gains     Losses          Gains       Losses

U.S. Treasury and 
 federal agencies           $ 4,999        $  14         $4,563     $  201
States and political 
 subdivisions                13,962           69          7,028        103
Mortgage-backed securities:
 Federal agencies             2,587          252          4,144        227
Collateralized mortgage 
 obligations                    118            2            192          6
                                
 Total mortgage-backed 
   securities                 2,705          254          4,336        233
Other (corporate bonds 
 and stocks)                 25,756       12,011         12,103      3,294
  
   Total                    $47,422      $12,348        $28,030     $3,831


<PAGE> 40
                           NORWEST FINANCIAL, INC.
             
              Notes to Consolidated Financial Statements, Continued


2.   Securities Available-for-Sale, Continued.

The amortized cost and fair values of securities available-for-sale by
maturity were:

                                       December 31, 1998
                                      Amortized      Fair
(In Thousands)                           Cost        Value

In one year or less                  $  120,781   $  122,177
After one year through five years       551,896      562,134 
After five years through ten years      260,652      268,223
After ten years                         235,097      250,966

   Total                             $1,168,426   $1,203,500


Norwest Financial computes realized gains and losses using the specific
identification method.  Total gross realized gains and losses from the
sale of securities were $7,749,000 and $2,786,000, respectively, in 1998;
$18,394,000 and $1,521,000, respectively, in 1997; and $10,057,000 and
$781,000, respectively, in 1996.  The carrying amounts of securities on
deposit under statutory or other requirements at December 31, 1998 and 
1997, were $11,616,000 and $11,672,000 respectively.

Income from securities available-for-sale and cash equivalents was as follows:

                                           Years Ended December 31,
(In Thousands)                           1998          1997      1996
Taxable interest                        $55,701      $51,334   $45,127
Tax-exempt interest                      13,032        9,135     4,383
Dividends                                 4,903        5,078     3,281
 
  Total income                          $73,636      $65,547   $52,791


3.   Finance Receivables.

Loans are generally repayable in monthly instalments over a period of 180
months or less.  Sales finance contracts can be either open-end (revolving)
or closed-end.  Open-end sales finance contracts do not have an original
maturity because the accounts created by these contracts can be  used for
repeated transactions.  The minimum monthly payment of open-end sales 
finance contracts generally ranges from 1/12 to 1/30 of the highest unpaid
balance of the account.  Closed-end sales finance contracts purchased are
repayable in equal monthly instalments and generally have original 
maturities of 60 months or less.

The amounts of cash payments applied to consumer receivables during the years
ended December 31, 1998, 1997, and 1996 approximated $6,346,421,000,  
$5,342,833,000, and $4,510,330,000, respectively.  These amounts exceeded
the amount contractually due because a substantial portion of such
receivables are renewed, converted, or paid in full prior to maturity. 
Unearned insurance premiums and insurance claims and policy  reserves  
which pertain to Norwest Financial's consumer receivables were approximately 
$147,227,000 and $152,584,000 at December 31, 1998 and 1997, respectively.
                     

<PAGE> 41


                        NORWEST FINANCIAL, INC.
    
         Notes to Consolidated Financial Statements, Continued


3.    Finance Receivables, Continued.

At December 31, 1998, contractual maturities of commercial receivables
were as follows:  $206,264,000 were due in one year or less; $345,501,000 
were due after one year through five years; and $17,544,000 were due after
five years.  Substantially all commercial receivables have fixed interest
rates.  Contractual maturities are not presented for the consumer receivables
as it is the Company's experience that a substantial portion of the consumer
receivable portfolio is renewed or repaid before contractual maturity dates.

Consumer receivables include Canadian receivables of $940,569,000 and
$617,828,000 at December 31, 1998 and 1997, respectively, and Argentina
receivables of $83,936,000 at December 31, 1998.  Commercial receivables at
December 31, 1998 include Canadian and Argentina receivables of $3,586,000 
and $8,167,000, respectively.

Non-accrual commercial receivables totaled $6,332,000 and $4,121,000 at
December 31, 1998 and  1997, respectively.  The allowance for losses related
to these commercial loans was $831,000 and $41,000 at December 31, 1998 and 
1997, respectively.

The average amount of non-accrual commercial receivables for the years 
ended December 31, 1998, 1997 and 1996 were $5,300,000, $3,481,000, and 
$3,527,000, respectively.

The effect of non-accrual commercial receivables on finance charges and 
interest are:

                                         Years Ended December 31,
(In Thousands)                           1998      1997     1996
Finance charges and interest:
 As originally contracted                $272      $391     $377
 As recognized using the cash basis       225       299      279

4.    Allowance for Credit Losses.

The analysis of the allowance for credit losses is as follows:

                                     Years Ended December 31,

(In Thousands)                   1998           1997        1996

Allowance for credit losses 
  beginning of year           $297,800        $169,133    $  158,618
Provision for credit losses 
  charged to expense           304,274         235,877       198,480
Write-offs                    (350,333)       (261,440)     (211,871)
Recoveries                      49,453          33,717        20,254
Allowance related to 
  receivables contributed 
  or acquired                   49,790         120,513         3,652

Allowance for credit losses 
  end of year                 $350,984        $297,800      $169,133



<PAGE> 42

                     NORWEST FINANCIAL, INC.

      Notes to Consolidated Financial Statements, Continued




5.    Loans Payable - Short-term.

Commitment fees are paid to support bank credit agreements (lines of
credit and revolving credit agreements).  The bank credit agreements
amounted to $1,821,297,000 at December 31, 1998; the entire amount 
was available at that date.  Unused bank credit agreements are available 
to support outstanding commercial paper. If all credit agreements in effect
at December 31, 1998 were to remain in effect and unused throughout 1999, 
the Company would pay approximately $1,246,000 in commitment fees.


Weighted average annual interest rates and average debt outstanding for        
commercial paper and other short-term debt excluding short-term debt 
from affiliates are shown below:

(Dollars in Thousands)
                                       1998         1997           1996
Weighted average annual interest
rate on commercial paper and
other short-term debt:

At December 31,                        5.50%         5.68%         5.20%

For the year                           5.60          5.30           5.36

For the year after considering
the effect of commitment fees          5.64          5.35           5.42

Average daily amount of commercial
paper and other short-term debt
outstanding during the year      $2,262,680     $1,894,706    $1,719,136

Maximum amount of commercial paper
and other short-term debt
outstanding at any month-end
during the year                  $3,094,241     $2,381,650    $2,100,101


The weighted average annual interest rate for the year was computed by 
dividing total interest expense on commercial paper and other short-term
debt by the average daily amount of such debt outstanding.  The weighted
average annual interest rate on short-term debt from affiliates for the 
years 1998, 1997, and 1996 was 5.37%, 5.43%, and 5.30% respectively.


<PAGE> 43
                     NORWEST FINANCIAL, INC.

      Notes to Consolidated Financial Statements, Continued

6.  Long-term Debt.
Long-term debt outstanding:
                                                December 31,
(In Thousands)
                                              1998               1997
Senior - United States:

    5-1/2% due 1998                       $                  $  150,000
    6.23 % due 1998                                             150,000
    7.34 % due 1998                                               2,000
    8-1/2% due 1998                                             100,000
    6    % due 1999                          150,000            150,000
    6.20 % due 1999                           75,000             75,000
    6-1/4% due 1999                          150,000            150,000
    6-7/8% due 1999                          100,000            100,000
    6.99 % due 1999                            2,200              4,600
    9.50 % due 1999                            3,400              6,700
    5-1/8% due 2000                          150,000            150,000
    6.10 % due 2000                          150,000            150,000
    6-7/8% due 2000                          150,000            150,000
    7-1/4% due 2000                          150,000            150,000
    8-3/8% due 2000                          150,000            150,000
    6-3/8% due 2001                          150,000            150,000
    7-3/4% due 2001                          100,000            100,000
    6-1/4% due 2002                          200,000            200,000
    6-3/8% due 2002                          200,000            200,000
    7-7/8% due 2002                          150,000            150,000
    7.95 % due 2002                          100,000            100,000
    8.56 % due 1999-2002                       6,667              8,333
    5-3/8% due 2003                          200,000
    6-1/8% due 2003                          150,000            150,000
    6-3/8% due 2003                          150,000            150,000
    6.93 % due 1999-2003                      12,500             15,000
    7    % due 2003                          150,000            150,000
    6    % due 2004                          150,000            150,000
    6-5/8% due 2004                          250,000            250,000
    7.20 % due 2004                          100,000            100,000
    6-3/4% due 2005                          150,000            150,000
    7-1/2% due 2005                          150,000            150,000
    6-1/4% due 2007                          100,000            100,000
    6-3/8% due 2007                          100,000            100,000
    7.20 % due 2007                          150,000            150,000
    6.85 % due 2009                          250,000            250,000
    Medium-term notes, 6.05% to 6.68%,
     due 1999 to 2001                        500,000            500,000

        Total senior - United States       4,699,767          4,911,633



<PAGE> 44
                        NORWEST FINANCIAL, INC.

           Notes to Consolidated Financial Statements, Continued

6.  Long-term Debt, Continued.

Long-term debt outstanding, continued

(In Thousands)                                    December 31,
    
                                              1998           1997
Senior - Canada:

    6.25 % due 1998                        $            $   69,950
    8.65 % due 1998                                          3,497
    8.50 % due 1999                           48,758        52,463
    9.00 % due 1999                           32,505
    7.55 % due 2000                           52,966
    7.80 % due 2000                            6,501         6,995
    Medium-term notes, 4.79% to 6.15%,
     due 1999 to 2008                        432,321       174,875

       Total senior - Canada                 573,051       307,780

       Total senior                        5,272,818     5,219,413

Senior subordinated - United States:

    7.34 % due 1998                                          2,000


Total long-term debt outstanding          $5,272,818    $5,221,413




Contractual maturities of long-term debt for the years 1999 through 2003
and thereafter are $942,034,000; $885,146,000; $501,683,000; $699,673,000;
$746,766,000; and $1,497,516,000, respectively.

Certain long-term debt instruments restrict payment of dividends on and 
acquisitions of the Company's common stock.  In addition, such debt 
instruments and the Company's bank credit agreements contain certain 
requirements as to maintenance of net worth (as defined).  Apprroximately 
$915 million of consolidated stockholder's equity was unrestricted at 
December 31, 1998.

<PAGE> 45
                     NORWEST FINANCIAL, INC.

  Notes to Consolidated Financial Statements, Continued
                            
                            
7.  Interest and Debt Expense.

Interest and debt expense is summarized as follows:
 
                                      Years Ended December 31,

(In Thousands)                     1998         1997          1996

Short-term - affiliates          $  8,799      $    916     $     83
Short-term - commercial paper 
  and other                       122,014        96,569       92,352
Long-term                         348,590       298,293      274,586
Amortization of debt expense        6,381         5,958        5,838

Total interest and debt expense  $485,784      $401,736     $372,859


8.  Insurance Premiums and Claims.

Insurance premiums earned by the Company's insurance subsidiaries are 
as follows:

                                        Years Ended December 31,
(In Thousands)                       1998         1997        1996

Direct premiums earned            $342,006      $298,795    $239,023
Assumed premiums earned            148,349       131,681     173,215
Ceded premiums earned             (220,677)     (219,024)   (255,895)

Net premiums earned               $269,678      $211,452    $156,343


Included in assumed premiums earned in 1998, 1997 and 1996 is $13.7
million, $22.6 million and $10.9 million of MPCI profit share.

The following table presents an analysis of the Company's insurance
claims and policy reserves, reconciling beginning and ending balances.

                                      Years Ended December 31,

(In Thousands)                     1998         1997        1996

Insurance claims and policy
  reserves at beginning of year  $ 30,566    $  35,893    $ 34,683
Provision for insurance losses
  and loss expenses               211,449      154,873     102,739
Insurance losses and loss 
  expense paid                   (212,265)    (160,200)   (101,529)
Insurance claims and policy  
  reserves at end of year        $ 29,750    $  30,566    $ 35,893

<PAGE> 46

                     NORWEST FINANCIAL, INC.

      Notes to Consolidated Financial Statements, Continued


8.  Insurance Premiums and Claims, Continued.

Insurance loss and loss expenses have been reduced by recoveries recognized
under reinsurance contracts of $281.7 million, $130.5 million and $264.2
million for the years ended December 31, 1998, 1997, and 1996 respectively.


9.  Leased Assets and Lease Commitments.

Lease terms are generally for three to seven years. Commitments at
December 31, 1998, under operating leases having initial or remaining
lease terms in excess of one year are approximately $46 million.

10. Income Taxes.

The Company and its subsidiaries are included in the consolidated
federal income tax return of Wells Fargo.  Federal income taxes are
allocated to the Company and its subsidiaries at the approximate amount
which would have been computed on a separate return basis.  Current
income taxes payable of $44.2 million was included in other payables to
affiliates at December 31, 1998.  The Company's foreign subsidiaries file 
separate federal and provincial returns in the local country.

At December  31, 1998, no federal income taxes had been provided on
approximately $44 million of one of the United States life insurance 
subsidiary's retained earnings since such taxes become payable only to
the extent such retained earnings are distributed as dividends or to the
extent prescribed by tax laws.   The life insurance subsidiary does not
contemplate distributing dividends from these retained earnings.  The 
amount of unrecognized deferred tax liability at December 31, 1998, was 
$15.4 million.

Income taxes for the years 1998, 1997, and 1996 are composed of the 
following elements:

                                   Years Ended December 31,
(In Thousands)                1998           1997           1996
Current:
 Federal                     $84,949        $90,276       $110,569
   State                       1,906          4,526          2,529
   Foreign                    27,264         24,176         26,300
Deferred:
 Federal and state            18,075         26,982         10,776
  Foreign                    (10,526)        (1,878)        (2,078)
                           
Total income taxes          $121,668       $144,082       $148,096


Income before taxes from operations outside the United States was $39.4 
million, $61.7 million, and $65.8 million for the years ended December 31, 
1998, 1997, and 1996, respectively.

Deferred income taxes are primarily due to leasing and lease financing,
the allowance for credit losses, accrued employee benefits and the net
unrealized holding gain (loss) on securities available-for-sale.
                     
<PAGE> 47

                     NORWEST FINANCIAL, INC.

      Notes to Consolidated Financial Statements, Continued


11. Employee Benefits.

The Company has a defined benefit pension plan which covers United
States employees who meet certain age and service requirements.  Pension
benefits provided are based on the employee's highest compensation in
three consecutive years during the last ten calendar years of employment.  
Benefits accrue under this plan at a rate of 1-1/4% for each year of
service.  The plan holds single premium annuity contracts issued by one of
the Company's life insurance subsidiaries.  Annual benefits paid to retirees
covered by the contracts were approximately $1.7 million and $1.8 million 
in 1998 and 1997, respectively.

The Company's Canadian subsidiary, Trans Canada Credit Corporation ("TCC"),
has a non-contributory defined benefit pension plan which covers employees
who meet certain service requirements.  Pension benefits under the plan are
based on the employee's highest compensation in five consecutive calendar
years during the last ten calendar years of employment.  Benefits generally
accrue under the plan at a rate of 1% of such highest average compensation 
up to the average Canada/Quebec Pension Plan Earnings Ceiling (an amount
based on the maximum amount of the annual compensation used to calculate
the employee's Canada/Quebec Pension Plan benefits) plus 1.5%  of such
highest average compensation in excess of the average Canada/Quebec Pension 
Plan Earnings Ceiling for each year of service (not to exceed 35 years of 
service).

The Company also provides certain health care and life benefits for
substantially all of its retired United States employees.  In accordance
with SFAS 106, the Company has elected to recognize the transition
obligation of approximately $22.2 million over a period of twenty years.
TCC also provides certain health and life insurance benefits to its retirees.

<PAGE> 48

                     NORWEST FINANCIAL, INC.
      Notes to Consolidated Financial Statements, Continued


11.  Employee Benefits, Continued.

The following table shows the changes in the benefit obligation and the fair 
value of plan assets during 1998 and 1997 and the amounts included in the
Company's balance sheet as of December 31, 1998 and 1997 for the Company's
defined benefit pension and other postretirement benefit plans:

<TABLE>
<CAPTION>

                                December 31, 1998       December 31, 1997
                                 Pension    Other      Pension       Other
(In Thousands)                  benefits   benefits    benefits     benefits
<S>                             <C>        <C>         <C>          <C>
Change in benefit obligation:
Benefit obligation at 
  beginning of year             $104,594   $54,270     $ 89,290      $39,586
Service cost                       5,785     4,437        3,941        3,174
Interest cost                      7,671     3,903        6,654        3,372
Plan participants'contributions                 76                        72
Amendments                         1,176
Actuarial loss                    14,191     3,687       10,181        8,964
Acquisitions                       5,758
Benefits paid                     (5,927)   (1,120)      (4,772)        (804)
Translation adjustment            (1,293)     (185)        (700)         (94)

Benefit obligation at 
  end of year                   $131,955   $65,068     $104,594      $54,270

Change in plan assets:
Fair value of plan assets
  at beginning of year*         $118,992  $ 14,999      $103,066     $10,100
Actual return on plan assets      11,636       719        15,662         618
Acquisitions                       4,117
Employer contributions             8,233     4,421         5,626       5,013
Plan participants' contributions                76                        72
Benefits paid                     (5,927)   (1,120)       (4,772)       (804)
Translation adjustment            (1,031)                   (590)

Fair value of plan assets 
  at end of year*               $136,020   $19,095       $118,992    $14,999

Funded status                      4,065   (45,973)        14,398    (39,271)
Unrecognized net actuarial loss   15,235    10,293          4,705      7,502
Unrecognized net transition  
  obligation  (asset)               (993)   15,555         (1,245)    16,667
Unrecognized prior service 
  cost (credit)                      694       671           (628)       715

Prepaid (accrued) benefit cost  $ 19,001  $(19,454)      $ 17,230   $(14,387)

</TABLE>

* Consists primarily of marketable bonds and debentures and obligations of the
  United States government and its agencies and includes $3,482,000 invested
  in the Norwest Short-Term Investment Fund at December 31, 1997.


<PAGE> 49

                     NORWEST FINANCIAL, INC.
      Notes to Consolidated Financial Statements, Continued


11.   Employee Benefits, Continued.

The following table sets forth the components of net periodic benefit cost:

<TABLE>
<CAPTION>
                                               Years Ended December 31,
                                       1998                1997              1996
                                 Pension   Other    Pension    Other   Pension   Other
(In Thousands)                   benefits benefits  benefits  benefits benefits benefits
<S>                               <C>      <C>       <C>      <C>      <C>      <C> 
Service cost                      $5,785   $4,437    $3,941   $3,174   $4,204   $3,361
Interest cost                      7,671    3,903     6,654    3,372    6,045    3,116
Expected return on plan assets    (9,879)    (797)   (8,861)    (546)  (7,148)
Recognized net actuarial
  (gain) loss (1)                  2,804      850      (822)     616    1,393    1,189
Amortization of prior service
 cost (credit)                      (146)      44      (146)      43     (146)      43
Amortization of unrecognized
  transition obligation (asset)     (193)   1,112      (199)   1,112     (200)   1,112

  Net period benefit cost         $6,042   $9,549    $  567   $7,771   $4,148   $8,821

</TABLE>

(1) Net gains and losses are amortized over five years.

The weighted-average assumptions used in calculating the amounts above for
the United States plans were, as of December 31, 1998 and 1997:

                                December 31, 1998       December 31, 1997
                                Pension     Other       Pension      Other
(In Thousands)                  benefits   benefits     benefits    benefits

Discount rate                     6.5%        6.5%        7.0%        7.0%
Expected return on plan assets    9.0         5.0         9.0         5.0
Rate of compensation increase     5.0                     5.0

The weighted-average assumptions used in calculating the amounts above for
the Canadian plans were, as of December 31, 1998 and 1997:

                                December 31, 1998       December 31, 1997
                                Pension     Other       Pension      Other
(In Thousands)                  benefits   benefits     benefits    benefits

Discount rate                     6.3%        6.3%        6.5%        6.5%
Expected return on plan assets    8.0                     8.0
Rate of compensation increase     5.6                     6.5

<PAGE> 50


                  NORWEST FINANCIAL, INC.

      Notes to Consolidated Financial Statements, Continued


11.  Employee Benefits, Continued.

The assumed health care cost trend rate used in measuring the United States
plan's accumulated postretirement benefit obligation as of December 31  1998
was 10% for 1999 decreasing until it reaches 8% in 2000  after which it
remains constant.  The Canadian plan assumed a 1999 health care trend of 12%
decreasing each successive year until it reaches 6% in 2006.  Increasing
the assumed health care trend by one percentage point in each year would
increase the combined accumulated postretirement benefit obligation as of
December 31, 1998 by $14.8 million and the aggregate of the combined interest
cost and service cost components of the net periodic benefit cost for 1998 
by $2.2 million.  Decreasing the assumed health care trend by one percentage
point in each year would decrease the combined accumulated postretirement
benefit obligation as of December 31, 1998 by $11.2  million and the 
aggregate of the combined interest cost and service cost components of
the net benefit periodic cost for 1998 by $1.6 million.

The Company also has a defined contribution thrift and profit sharing plan
whereby each eligible United States employee may make basic contributions
up to 6% of his or her compensation and supplemental contributions up to an
additional 4%.  The Company makes a matching contribution of $.25 for every
dollar of the basic employee contribution made during the year and not 
withdrawn.   The Company may also make a profit sharing contribution
on the basic employee contribution with the amount determined by the
percentage return on consolidated equity (as defined) of Norwest Financial
Services, Inc. and its subsidiaries.  Contribution expense for the Company
was $17,178,000, $15,051,000, and $13,694,000 for the years ended December 31,
1998, 1997, and 1996, respectively.

12. Statements of Consolidated Cash Flows.

The Company and its subsidiaries consider highly liquid debt instruments
purchased with an original maturity of three months or less to be cash
equivalents.  Supplemental disclosure of certain cash flow information is 
presented below:

                                   Years Ended December 31,

(In Thousands)                1998           1997           1996

Cash paid for:
    Interest                $477,117       $375,376       $370,144
    Income taxes              95,955        109,391        110,026


13. Concentrations of Credit Risk.

The Company and its subsidiaries are primarily engaged in the consumer and
automobile finance business.  The average balance outstanding with any 
individual customer is not significant.  At December 31, 1998, the Company
had 1,147 consumer and automobile finance offices in 46 states, Guam, Saipan,
Puerto Rico, Argentina, and all ten Canadian provinces compared with 1,236 
consumer and automobile finance offices in 47 states, Guam, Puerto Rico,
and ten Canadian provinces at December 31, 1997.  Credit cards are issued
by Dial Bank to customers located nationwide.  Dial National Bank issues
private label and dual-line Co-Branded credit cards nationwide.

<PAGE> 51

                     NORWEST FINANCIAL, INC.

      Notes to Consolidated Financial Statements, Continued


13. Concentrations of Credit Risk, Continued.

A subsidiary of the Company also provides accounts receivable financing
primarily to high quality furniture stores across the country.  A different
subsidiary provides financing via secured lines of credit to commercial
entities who in turn provide financing to their customers.  In addition,
another subsidiary of the Company provides lease financing and other
leasing services nationwide for a variety of commercial equipment with
an emphasis on health care equipment.

14. Segment Information.

The Company has three reportable segments: U.S. consumer finance, Canadian
consumer finance, and automobile finance.  The Company's operating segments
are determined by product type and geography.  U.S. consumer finance 
operations make loans to individuals and purchase sales finance contracts
through 768 consumer finance branches in 46 states, Guam, Saipan, and  
Puerto Rico.  The U.S. consumer finance segment also issues credit cards
through two banking subsidiaries.  Canadian consumer finance operations make
loans to individuals and purchase sales finance contracts through 147
consumer finance branches in the 10 provinces.  Automobile finance operations
specialize in purchasing sales finance contracts directly from automobile
dealers and making loans secured  by automobiles through 231 branches in 33
states and Puerto Rico.   Results from insurance operations are included in
the appropriate segment.

The accounting policies of the segments are the same as those described in
the summary of significant accounting policies (see note 1).  The Company
accounts for intersegment sales and transfers as if the sales or transfer  
were to third parties, that is, at current market prices.

Selected financial information for each segment is shown below:
<TABLE>
<CAPTION>

(In Thousands)          U.S.     Canadian
                      Consumer   Consumer   Automobile
                      Finance    Finance     Finance     Other*  Eliminations     Total
<S>                 <C>         <C>         <C>          <C>         <C>        <C>  
1998:
Finance charges 
  and interest      $  898,426  $  201,163  $  327,623   $ 71,480    $          $ 1,498,692
Interest expense       318,023      46,072      90,825     30,864                   485,784
Intersegment income                                        49,384     (49,384)
Total income         1,157,508     221,419     343,004    333,218     (49,384)    2,005,765
Income tax expense      74,917       9,360       8,776     28,615                   121,668
Net income             158,641      17,409      12,430     50,124                   238,604
Total assets         6,484,291   1,042,515   2,182,446    806,955                10,516,207

1997:
Finance charges 
  and interest         931,952     152,315     142,672     55,637                1,282,576
Interest expense       314,113      25,843      38,442     23,338                  401,736
Intersegment income                                        49,488     (49,488)
Total income         1,186,980     172,450     149,940    268,914     (49,488)   1,728,796
Income tax expense      90,105      15,677       7,692     30,608                  144,082
Net income             170,569      29,115      13,389     56,377                  269,450
Total assets         6,529,125     655,874   1,598,442    538,483                9,321,924

</TABLE>

<PAGE> 52
                          NORWEST FINANCIAL, INC.

           Notes to Consolidated Financial Statements, Continued


14.  Segment Information, Continued.
<TABLE>
<CAPTION>
                       U.S.    Canadian
                    Consumer   Consumer    Automobile
                     Finance    Finance     Finance     Other*  Eliminations   Total
<S>                 <C>         <C>        <C>        <C>        <C>         <C>
1996:
Finance charges 
  and interest     $  949,373   $137,525   $ 54,269   $  67,627  $           $1,208,794
Interest expense      308,799     24,638     15,603      23,819                 372,859
Intersegment income                                      45,977   (45,977)
Total income        1,187,923    155,620     59,707     225,720   (45,977)    1,582,993
Income tax expense     96,728     17,190      4,717      29,461                 148,096
Net income            167,845     31,925     10,145      66,416                 276,331
Total assets        6,322,077    591,892    339,539     507,337               7,760,845
   
</TABLE>

*  Information from other segments below the quantitative threshold are  
   attributable to commercial finance operations, information services
   operations, several miscellaneous insurance companies and operations 
   in Argentina.


The following information is shown by geographic area:

(In Thousands)
                                                     All Other
                         United States   Canada      Countries      Total
1998:
Total income             $1,746,038   $  221,419    $  38,308     $ 2,005,765
Total net income            212,770       17,409        8,425         238,604
Total long-lived assets     178,432        7,914        1,349         187,695
Total assets              9,304,860    1,042,515      168,832      10,516,207

1997:
Total income              1,535,941      172,450       20,405       1,728,796
Total net income            228,527       29,115       11,808         269,450
Total long-lived assets      96,346        6,191                      102,537
Total assets              8,615,794      655,874       50,256       9,321,924

1996:
Total income              1,407,480      155,620       19,893       1,582,993
Total net income            232,957       31,925       11,449         276,331
Total long-lived assets      69,203        5,865                       75,068
Total assets              7,129,143      591,892       39,810       7,760,845

<PAGE> 53

                     NORWEST FINANCIAL, INC.

      Notes to Consolidated Financial Statements, Continued


15. Fair Value of Financial Instruments.

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to 
estimate that value:

Cash and Cash Equivalents. Due to the relatively short period of time 
between the origination of these instruments and their expected realization, 
the carrying value of cash equivalents is a reasonable estimate of fair value.

Securities   Available-for-Sale.  Fair values of these financial instruments 
were estimated using quoted market prices, when available.  If quoted market 
prices were not available, fair value was estimated using quoted market 
prices for similar securities (note 2).

Finance Receivables and Notes Receivable - Affiliates.  The interest rates
on the receivables outstanding at December 31, 1998 and 1997, are consistent
with the current rates at which similar loans would be made to borrowers 
with similar credit  ratings and for the same remaining maturities.  As a 
result, the carrying value is a reasonable estimate of fair value.

Loans Payable - Short-term and Accrued Interest Payable. Carrying value is
a reasonable estimate of fair value.  The carrying amount approximates fair
value due to the short maturity of these instruments.

Other Payables to Affiliates.  Due to the relatively short period of time
between the origination of these instruments and the expected realization,   
the carrying value of other payables to affiliates is a reasonable estimate 
of fair value.

Long-term Debt.  Based on quoted market rates for the same or similar issues 
of debt or on current rates offered to the Company for similar debt of the  
same remaining maturities, the fair value of long-term debt is 
$5,436,650,000 as of December 31, 1998 and $5,301,982,000 as of December 31,
1997.

16. Selected Quarterly Financial Data (Unaudited).

Selected quarterly financial data for 1998 and 1997 were as follows:

                                     Interest   Provision            
                          Total      and Debt   for Credit      Net
(In Thousands)            Income     Expense      Losses       Income

March 31, 1997           $408,836   $ 92,879     $ 54,749     $62,777
June 30, 1997             391,047     92,934       44,627      68,309
September 30, 1997        471,614    102,042       57,819      67,640
December 31, 1997         457,299    113,881       78,682      70,724

March 31, 1998            447,151    114,350       67,176      58,690
June 30, 1998             457,823    119,703       63,304      64,306
September 30, 1998        612,203    123,787       68,935      65,534
December 31, 1998         488,588    127,944      104,859      50,074

<PAGE> 54
  
                        NORWEST FINANCIAL, INC.
     
        Notes to Consolidated Financial Statements, Concluded


17. Related Parties.

Notes receivable - affiliates were $499,123,000 and $646,832,000 at
December 31, 1998 and 1997, respectively.  Notes receivable affiliates
include a combination of short-term and long-term notes receivable.  At
December 31, 1998,  Norwest Financial, Inc. had term loans totaling $389
million to an affiliate, Island Finance Puerto Rico, Inc.  The loans have
a weighted average interest rate of 8.89% and mature in 2000 and 2002. 
The remainder of notes outstanding at December 31, 1998 and 1997, earn
interest at rates that approximate the cost of borrowings of the Company.

Income from affiliates was $63,228,000; $58,200,000; and $54,443,000 for
the years ended December 31, 1998, 1997, and 1996, respectively.

Management fees paid to Norwest Corporation were $7,143,000; $5,724,000;  
and $5,230,000 for the years ended December 31, 1998, 1997, and 1996, 
respectively.

18. Business Combination (Unaudited).

The following unaudited summary, prepared on a proforma basis, combines
the consolidated results of operations of the Company for the years ended
December 31, 1998 and 1997, with Reliable, TEAC, NRCS, Finvercon,
and Fidelity as if the acquisitions had occurred at the beginning of each
respective year presented:

(In Thousands)                                  1998            1997

Total income                                   $2,040,133    $1,947,903
Net income                                        240,061       289,458


<PAGE> 55

Item 9.  Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure.
                              
On March 5, 1999, upon the recommendation of the management of Wells Fargo,
the Board of Directors of the Company dismissed the Company's auditors, 
Deloitte & Touche LLP ("Deloitte"), subject to completion of the Company's
and related entities' audits for the year ended December 31, 1998, and 
approved the selection of KPMG Peat Marwick LLP ("Peat"), as the Company's
independent accountants for the year ending December 31, 1999.

Deloitte served as the Company's independent accountants for the years 
ended  December 31, 1996, 1997 and 1998.  Deloitte issued an unqualified 
opinion on the Company's consolidated financial statements as of and for 
the years ended December 31, 1996, 1997 and 1998.  Prior to the
November 2,  1998 merger of the former Wells Fargo & Company into a 
wholly-owned subsidiary of Norwest Corporation, Peat audited the financial 
statements of both Norwest Corporation and the former Wells Fargo & Company
and since consummation of the merger has been the auditor of Wells Fargo. 
For additional information on the Company's changes in auditors, please see 
the Company's Current Report on Form 8-K dated March 9, 1999.

PART III

Item 10.  Directors and Executive Officers of the Registrant.

Omitted in accordance with General Instruction I (2) (c).

Item 11.  Executive Compensation.

Omitted in accordance with General Instruction I (2) (c).

Item 12.  Security Ownership of Certain Beneficial Owners and Management.
       
Omitted in accordance with General Instruction I (2) (c).

Item 13.  Certain Relationships and Related Transactions.

Omitted in accordance with General Instruction I (2) (c).

PART IV

Item 14.  Exhibits, Financial  Statement Schedules, and Reports on Form 8-K.
      
(a)       The following documents are filed as part of this report:

(1)       Financial Statements:

          a.  Consolidated balance sheets as of December 31, 1998 and 1997.
      
          b.  Statements of consolidated income for the years ended 
              December 31, 1998, 1997, and 1996.
                              
          c.  Statements of consolidated comprehensive income for the 
              years ended December 31, 1998,  1997, and 1996.
      
          d.  Statements of consolidated cash flows for the years ended 
              December 31, 1998, 1997, and 1996.
      
          e.  Statements of consolidated stockholder's equity for the years 
              ended December 31, 1998,  1997 and 1996.
      
(2)       Financial Statement Schedules:

          All schedules are omitted because they are not applicable or the
          information is given in consolidated financial statements  or 
          notes thereto.

<PAGE> 56

(3)   Exhibits:

        3(a)  Articles of Incorporation of the Company (Exhibit 3(a) of
              the Company's Form 10-K Annual Report for 1983, which is
              hereby incorporated by reference).
        
        3(b)  By-laws of the Company (Exhibit 3(b) of the Company's Form
              10-K Annual Report for 1983, which is hereby incorporated
              by reference).
        
        4(a)  Conformed copy of Indenture dated as of May 1, 1986, between
              the Company and The Chase Manhattan Bank (National
              Association), Trustee (Exhibit 4(o) of the Company's Form
              10-K Annual Report for 1986, which is hereby incorporated
              by reference).

        4(b)  Conformed copy of Indenture dated as of May 1, 1986, between
              the Company and Harris Trust and Savings Bank, Trustee  
              (Exhibit 4(p) of the Company's Form 10-K Annual Report for
              1986, which is hereby incorporated by reference).
        
        4(c)  Copy of Norwest Financial, Inc. Standard Multiple-Series
              Indenture Provisions dated May 1, 1986, (Exhibit 4(q) of
              the Company's Form 10-K Annual Report for 1986,  which is
              hereby incorporated by reference).

        4(d)  Conformed copy of First Supplemental Indenture dated as of
              February 15, 1991, between the Company and The Chase
              Manhattan Bank (National Association), Trustee (Exhibit 4.3
              of the Company's Form 8-K Current Report dated February 25,
              1991, which is hereby incorporated by reference).

        4(e)  Conformed copy of First Supplemental Indenture dated as of 
              February 15, 1991, between the Company and Harris Trust and
              Savings Bank Trustee (Exhibit 4.4 of the Company's Form 8-K
              Current Report dated February 25, 1991, which is hereby
              incorporated by reference).

        4(f)  Conformed copy of Indenture dated as of November 1, 1991,
              between the Company and The First National Bank of Chicago, 
              Trustee (Exhibit 2(a) of the Company's Form 8-A Registration
              Statement dated May 24, 1993, which is hereby incorporated 
              by reference).

        *(12) Computation of ratios of earnings to fixed charges for the
              years ended December 31, 1998, 1997, 1996, 1995, and 1994.
        
        *(23) Consent of Deloitte & Touche LLP.

Certain instruments with respect to long-term debt publicly issued, privately
placed or borrowed from banks are not filed herewith as exhibits as the total
amount of securities or indebtedness authorized under any of such instruments
does not exceed 10% of the total assets of the Company and its subsidiaries  
on a consolidated basis. In accordance with subsection (4)(iii) of paragraph
(b) of Item 601 of Regulation S-K, the Company hereby agrees to furnish copy
of any such instrument to the Securities and Exchange Commission upon 
request.  The list of subsidiaries exhibit required by Item 601 of Regulation
S-K has been omitted in accordance with General Instruction I(2)(b).

(b)  Reports on Form 8-K.

     No reports on Form 8-K were filed by the Company during the last 
     quarter of the period covered by this report.


<PAGE> 57

                           SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, 
on the 19th day of March 1999.


                                   NORWEST FINANCIAL, INC.
                                  
                                   By  \S\ Dennis E. Young
                                   Executive Vice President and
                                   Chief Financial Officer


                                      
                                      
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons, on behalf
of the registrant and in the capacities indicated, on the 19th day of 
March 1999.


\S\ David C. Wood
David C. Wood
Chairman of the Board and
President (Principal
Executive Officer)


\S\ Patricia J. McFarland
Patricia J. McFarland
Senior Vice President,
General Counsel,
Secretary, and Director
   
   
   
Stanley S. Stroup
Director


\S\ Dennis E. Young
Dennis E. Young
Executive Vice President and
Chief Financial Officer, and
Director
(Principal Financial Officer)


\S\ Eric Torkelson
Eric Torkelson
Senior Vice President
and Controller
(Principal Accounting Officer)