<PAGE> 1
                            PART I
  
  Item 1.  Business.
  
                         THE COMPANY
  
  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"). 
  The Parent is a wholly-owned subsidiary of Norwest Corporation ("Norwest"),
  an $80.2 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 primarily engaged in the consumer finance business. 
  Consumer finance receivables consist of loans made to individuals and sales
  finance contracts arising from the sale of goods and services (including the
  sale of new and used automobiles).  Norwest Financial also has credit card
  receivables and insurance premium finance receivables in its consumer
  portfolio.  At December 31, 1996, the Company and its consumer finance
  subsidiaries had 1,073 branch offices in 47 states, Guam, Puerto Rico, and
  the ten Canadian provinces.  For a summary of total income, earnings before
  income taxes and total assets by country, see note 8 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 finance business and the consumer finance business of certain
  affiliates. Credit property, involuntary unemployment and non-filing
  insurance are provided as part of Norwest Financial's consumer finance
  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.  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.
  
  <PAGE> 2
  
  Effective January 1, 1995, the Parent made a capital contribution, without
  consideration, to the Company of the outstanding common stock of Community
  Credit Co. and Dial National Bank (the "Contributed Subsidiaries").  These
  capital contributions to the Company have been accounted for as a merger of
  interests under common control.  Community Credit Co. is primarily engaged
  in consumer finance including loans secured by real estate and not secured
  by real estate and sales finance contracts arising from the sale of
  automobiles.  Community Credit Co. had 55 branch offices and assets of
  $213.6 million at January 1, 1995.  Net earnings in 1994 were $6.3 million. 
  Unless otherwise noted, Community Credit Co. is included when discussing the
  consumer finance operations of the Company.  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.
  
  Effective May 4, 1995, Norwest purchased Island Finance, a group of eight
  consumer finance companies headquartered in San Juan, Puerto Rico which
  currently has 131 branch offices located in Puerto Rico, Panama, the
  Netherlands  Antilles, the U.S. Virgin Islands, 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 provided approximately $500 million
  of its funding at December 31, 1996.  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.
  
  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
  (said subsidiary being hereinafter called the "Transferred Subsidiary"). 
  The Transferred Subsidiary had assets totaling $147.1 million and 39 branch
  offices at the time of the transfer.
  
  Effective November 17, 1992, the Company expanded its consumer finance
  operations into Canada with the purchase of the consumer finance business
  of Trans Canada Credit Corporation Limited.  This acquisition was accounted
  for as a purchase and, accordingly, Norwest Financial's financial statements
  were not restated to reflect the accounts and operations of the business
  prior to acquisition.  Canadian financial information in this document is
  shown in United States dollars unless otherwise indicated.  Assets and
  liabilities in Canadian dollars are translated at the exchange rate as of
  the balance sheet date.  Canadian operating results are translated at the
  average exchange rates for the period covered by the income statement.
  
  <PAGE> 3
                     CONSUMER OPERATIONS
  
  
  
  At December 31, 1996, consumer receivables accounted for 92% of Norwest
  Financial's total finance receivables outstanding.  The amount and type of
  consumer receivables outstanding in the United States and Canada is shown
  below:
  
  
  
  
               Consumer Receivables Outstanding
  
  (In Thousands)
  
                                   United States       Canada         
  Total  
  
  Loans:
    Secured by real estate           $1,519,556       $ 59,214      $1,578,770
    Not secured by real estate        1,365,311        380,574       1,745,885
  
      Total loans                     2,884,867        439,788       3,324,655
  
  Sales finance contracts             1,577,785        105,870       1,683,655
  
      Total consumer finance          4,462,652        545,658       5,008,310
  
  Other consumer receivables            447,021                        447,021
  
      Total consumer receivables     $4,909,673       $545,658      $5,455,331
  
  
  Loans had an average balance per account of $3,431.  Sales finance contracts
  had an average balance per account of $1,104.  Other consumer receivables
  include credit card receivables and insurance premium finance receivables.
  
  
  <PAGE> 4
  
  Geography
  
  At December 31, 1996, Norwest Financial had consumer finance branch offices
  in 47 states, Guam, Puerto Rico, and the ten Canadian provinces.  The number
  of consumer finance branch offices and percentage of consumer finance
  receivables in the United States or Canada at December 31, 1996, is shown
  below.  Community Credit Co. branch offices are shown separately from the
  rest of the United States finance business.
  
  <TABLE>
<CAPTION>
            Number of Branch Offices and Percent of Receivables

United States Consumer Finance
                                                                   
                             Percent of                                        Percent of
                              Consumer                                          Consumer
                   Branch      Finance                               Branch      Finance
  Location         Offices   Receivables           Location          Offices   Receivables 
<S>                <C>       <C>               <C>                   <C>       <C>
Alaska                 6         1.0%           Nebraska                10         1.1%
Arizona               17         1.8            Nevada                  15         1.5  
California           103        11.2            New Hampshire            1          .1
Colorado              15         1.7            New Jersey              11         1.1
Connecticut            3          .3            New Mexico              20         2.0
Delaware               2          .2            New York                14         3.4
Florida               46         5.5            North Carolina          19         3.0
Georgia               22         2.8            North Dakota             5          .7
Guam                   2          .3            Ohio                    29         4.0
Hawaii                17         1.5            Oklahoma                18         2.0
Idaho                 13         1.3            Oregon                  13         1.4
Illinois              28         4.1            Pennsylvania            28         3.4
Indiana               16         1.6            Puerto Rico              7          .9 
Iowa                  15         1.9            Rhode Island             4          .6
Kansas                 8          .8            South Carolina          25         2.8
Kentucky              25         2.5            South Dakota             4          .3
Louisiana             41         3.6            Tennessee               29         2.9
Maine                  1          .1            Texas                   54         5.6 
Maryland              21         3.9            Utah                    13         1.6
Massachusetts         12         1.6            Virginia                11          .9
Michigan               2          .2            Washington              23         2.9
Minnesota             12         1.7            West Virginia            7          .7
Mississippi           24         1.8            Wisconsin               14         1.0
Missouri              27         3.3            Wyoming                  4          .3
Montana                7         1.1
                                                                       863       100.0%
</TABLE>
<PAGE> 5
       Number of Branch Offices and Percent of Receivables, continued

<TABLE>
<CAPTION>
Canadian Consumer Finance
                                                                              
                             Percent of                                         Percent of
                              Consumer                                          Consumer
                   Branch      Finance                               Branch      Finance
Location           Offices   Receivables        Location             Offices   Receivables 
<S>                <C>       <C>                <C>                  <C>       <C>
Alberta                9         5.7%           Nova Scotia             16        12.7%
British Columbia      19        12.3            Ontario                 41        32.0
Manitoba               4         3.0            Prince Edward Island     2         1.4
New Brunswick         12         7.7            Quebec                  21        13.7
Newfoundland          12         8.0            Saskatchewan             4         3.5 

                                                                       140       100.0%

</TABLE>

<TABLE>
<CAPTION>
Community Credit Co.        
                                                                              
                             Percent of                                         Percent of
                              Consumer                                          Consumer
                   Branch      Finance                               Branch      Finance
Location           Offices   Receivables        Location             Offices   Receivables 
<S>                <C>       <C>                <C>                  <C>       <C>
Arizona                5         8.4%           Nebraska                 1          .8%
California             1          .5            Nevada                   1          .7
Colorado               4         7.6            Ohio                     2         3.1
Illinois              10        18.3            Oregon                   1         1.1
Indiana                3         2.7            Pennsylvania             2         1.9
Minnesota             21        31.0            Washington               1          .5
Missouri               2         2.6            Wisconsin               16        20.8

                                                                        70       100.0%
</TABLE>

<PAGE> 6

  Growth and Volume of Consumer Finance Receivables
  
  The following tables present the growth and volume of Norwest Financial's
  loans and sales finance contracts for the five years ended December 31,
  1996:
  
  <TABLE>
  <CAPTION>
                     Consumer Finance Receivables
                  and Number of Accounts Outstanding

                           Percentage                Percentage    Average  Number
   At        Consumer       Increase                  Increase     Balance    of
December      Finance     From Previous  Number of  From Previous    Per    Branch
   31,      Receivables        Year      Accounts        Year      Account  Offices
<S>       <C>             <C>            <C>        <C>            <C>      <C>
  1996    $5,008,310,000        6%       2,494,000        2%       $2,008    1,073
  1995     4,740,524,000       16        2,443,000       11         1,940    1,029
  1994     4,080,360,000        9        2,193,000        6         1,861      942
  1993     3,746,230,000       12        2,066,000        8         1,813      942
  1992     3,356,832,000       21        1,906,000       15         1,761      882

</TABLE>                           
     Loans Made and Acquired and Sales Finance Contracts Purchased
<TABLE>
<CAPTION>
                           Number of    Average      Sales                 Average
                           Loans Made  Size Loan    Finance     Number of    Size
 Year Ended   Loans Made      and      Made and    Contracts    Contracts  Contract
December 31, and Acquired*  Acquired   Acquired    Purchased    Purchased  Purchased
<S>         <C>            <C>         <C>      <C>             <C>        <C>
   1996     $2,731,413,000   910,000    $3,002  $2,129,043,000  1,931,000    $1,103
   1995      2,534,194,000   873,000     2,903   2,073,026,000  1,916,000     1,082
   1994      2,460,522,000   877,000     2,806   1,825,917,000  1,825,000     1,001
   1993      2,169,132,000   775,000     2,799   1,553,022,000  1,591,000       976
   1992      1,944,225,000   733,000     2,652   1,257,919,000  1,350,000       932

</TABLE>
*Includes balances renewed of $874,050,000, $794,796,000, $759,775,000,
 $680,357,000, and $480,030,000 for the years 1996 through 1992, respectively.

                                                                 
  
  Regulation
  
  Norwest Financial's consumer finance lending operations in the United States
  are, for the most part, regulated by consumer finance laws or similar
  legislation in each of the states 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 the 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
  deregulated.
  
  <PAGE>7
  
  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, marital 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.
  
  Regulation of the Company's insurance subsidiaries is described under
  "Insurance Operations."
  
  <PAGE> 8
  
  Business Methods
  
  Loans are generally repayable in monthly installments 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, 1996, open-end sales finance contracts accounted
  for 55% of Norwest Financial's total sales finance receivables outstanding. 
  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 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.
  
  In many cases the loans are secured by liens on household goods,
  automobiles, other personal property or real estate.  Of the total loans
  made during 1996, approximately 90% of the amount and 75% 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 institutes 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
  1996, 63.8% represented funds lent to borrowers who requested additional
  money while still owing Norwest Financial.  In the years 1995 through 1992,
  this figure was 63.6%, 63.5%, 64.1%, and 64.4%, respectively.  In 1996, of
  the 910,000 loans made by Norwest Financial, 421,000 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 $2,065;
  the average amount of the old balance was $2,078.  Norwest Financial's
  policy is that loans are not made to present customers to cure a default in
  principal or interest.
  
  
  <PAGE> 9
  
  Through its network of branch offices, the Company buys sales finance
  contracts from retail merchants across the United States, Canada, and Puerto
  Rico.  The contracts may finance a consumer's purchase of new furniture,
  appliances, personal computers or, in the case of contracts bought by
  Community Credit Co., an automobile.  Credit approvals are made by the
  branch office before the contracts are purchased.
  
  For consumer finance offices other than Community Credit Co., sales finance
  contracts are the primary source of new customers for direct loans; of new
  loans made in 1996, 72% were to current or former sales finance customers.
  
  Norwest Financial began marketing VISA and MasterCard credit cards to
  certain of its customers through its United States branch offices in 1987. 
  These credit cards are issued by Dial Bank, the Company's state chartered
  bank subsidiary located in Sioux Falls, South Dakota.  Dial Bank had 247,000
  VISA or MasterCard accounts at December 31, 1996; credit card receivables
  outstanding were $255.1 million.
  
  Dial Bank entered the insurance premium financing business through the
  purchase of the receivables of Coast Program, Inc. in February 1991.  Dial
  Bank finances liability and material damage auto insurance in California and
  Texas.  In addition, Norwest Financial Coast, Inc. provides insurance
  premium financing in Arizona and 10 states located throughout the
  southeastern section of the United States.  Business is generated through
  over 2,200 independent insurance agents.  At December 31, 1996,
  approximately 85,000 accounts totaling $68.7 million were outstanding; $40.4
  million of these receivables were owned by Dial Bank.
  
  Effective January 1, 1995, the Parent contributed Dial National Bank to the
  Company.  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 84,000
  accounts at December 31, 1996; credit card receivables were $123.2 million.
  
  Norwest Financial's average earned rates of charge on the average amount of
  consumer receivables outstanding during each of years 1996 through 1992 were 
   21.22%, 21.56%, 21.76%, 22.55%, and 22.49%, respectively.
  
  Loss Experience
  
  The allowance for losses on consumer receivables is based on loss experience
  in relation to consumer receivables outstanding.  All such receivables which
  appear to be uncollectible or to require inordinate collection costs are
  written off.  Consumer receivables, other than finance receivables in
  Canada, those owned by Community Credit Co., and other consumer receivables,
  comprise 74% of outstanding consumer receivables.  These receivables, other
  than loans secured by real estate over $25,000, are written off for
  financial reporting if no payment is applied during the three-month period
  immediately preceding the balance sheet date and the receivable is three or
  more payments contractually delinquent. The remaining 26% of consumer
  receivables are written off for financial reporting when certain delinquency
  criteria are met.
  
  <PAGE> 10
  
  Information concerning consumer loss experience and allowance for losses is
  shown below:
  <TABLE>
  <CAPTION>
                                             Years Ended December 31,              

(In Thousands)                 1996       1995       1994       1993       1992  
<S>                          <C>        <C>        <C>        <C>        <C> 
Allowance, beginning
  of period                  $152,108   $126,802   $114,876   $106,024    $77,562

Write-offs:
  Loans                      (120,443)   (93,549)   (75,124)   (74,835)   (57,582)
  Sales finance               (61,184)   (37,118)   (23,920)   (21,221)   (17,684)
  Other                       (26,163)   (14,299)    (8,552)    (5,491)    (6,496)
      Total write-offs       (207,790)  (144,966)  (107,596)  (101,547)   (81,762)

Recoveries:
  Loans                        13,089     11,598     11,877     11,226      8,153
  Sales finance                 4,233      2,997      2,528      2,224      2,438
  Other                         1,739      1,312        850        501        737
      Total recoveries         19,061     15,907     15,255     13,951     11,328

Provision for credit losses
  charged to expense          195,952    143,467    107,931     96,448     78,591
 
Allowance related to
  receivables acquired,
  contributed or
  (transferred) - net           3,652     10,898     (3,664)               20,305

Allowance, end of period:
  Loans                        85,646     81,193     76,256     71,809     68,212
  Sales finance                62,167     54,365     40,696     35,417     28,912
  Other                        15,170     16,550      9,850      7,650      8,900
      Total allowance        $162,983   $152,108   $126,802   $114,876   $106,024

Ending receivables as
  a percent of total
  consumer receivables:
    Loans                          61%        60%        66%        67%        70%
    Sales finance                  31         29         28         28         26
    Other                           8         11          6          5          4
                                  100%       100%       100%       100%       100%


Allowance as a percent of
  ending receivables             2.99%      2.86%      2.92%      2.90%      3.02%

Write-offs after recoveries
  as a percent of average
  consumer receivables           3.55%      2.66%      2.24%      2.41%      2.37%

Consumer receivables
  outstanding more
  than three payments 
  contractually delinquent   $123,961   $101,693   $ 77,233   $ 73,541   $ 70,938
</TABLE>
<PAGE> 11

  Insurance Operations
  
  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 Company's insurance subsidiaries provide, directly or through
  reinsurance arrangements, credit life, credit disability, property, and
  involuntary unemployment insurance as a part of Norwest Financial's consumer
  finance business and the consumer finance business of certain affiliates. 
  The Company also offers involuntary unemployment insurance and non-filing
  insurance on an agency basis in certain states.  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
  subsidiary 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 (i) is
  directly related to an extension of credit by Norwest or any of its
  subsidiaries, and (ii) 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 Norwest or any of its
  subsidiaries.  In addition, the Company's foreign insurance subsidiary also
  reinsures credit life or disability insurance written by non-affiliated
  companies.
  
  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.
  
  <PAGE> 12
  
  Insurance premiums, claim and underwriting expenses and income from
  underwriting for life and disability insurance underwritten by the Company's
  insurance subsidiaries are summarized for the periods indicated below:
  <TABLE>
  <CAPTION>
  
                                         Years Ended December 31,             

(In Thousands)               1996       1995       1994       1993       1992
<S>                        <C>        <C>        <C>        <C>        <C>
Premiums earned:
  Life                     $43,725    $39,174    $28,414    $26,141    $26,806
  Disability                48,170     47,732     37,060     34,932     31,724

Claim expense:
  Life                      13,964     13,528     10,074     10,381      8,903
  Disability                15,458     16,715     13,773     14,048     11,785

Underwriting expense:
  Life                       2,729      2,994      1,853      1,961      3,564
  Disability                 3,770      4,462      2,998      3,618      4,594

Income before income
taxes from underwriting:
  Life                      27,032     22,652     16,487     13,799     14,339
  Disability                28,942     26,555     20,289     17,266     15,345

</TABLE>
  Income before income taxes from the underwriting (as principal), or the sale
  (as agent), of property insurance, involuntary unemployment insurance and
  non-filing insurance for the years 1996 through 1992 was $42,378,000,
  $34,707,000; $31,838,000; $24,949,000; and $22,204,000, respectively.
  
  <PAGE> 13
  
                COMMERCIAL FINANCE OPERATIONS
  
  
  
  At December 31, 1996, commercial finance receivables accounted for 8% 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, 1996:
  
  
            Commercial Finance Receivables Outstanding
  
                          (In Thousands)
  
  
                                             Total 
          At                  Accounts     Commercial      Percentage
       December    Leasing   Receivable     Finance    Increase (Decrease)
          31,     and Other   Financing   Receivables   From Previous Year
  
         1996     $419,062    $ 75,042      $494,104           (3)%
         1995      409,882      97,598       507,480            1
         1994      407,513      92,757       500,270           (2) 
         1993      381,129     130,983       512,112          (13)
         1992      442,331     147,570       589,901           (7) 
  
  
  
  Norwest Financial's average earned rates of charge on the average amount of
  commercial finance receivables outstanding during each of the years 1996
  through 1992 were 14.97%, 14.69%, 14.58%, 13.46%, and 14.06%, respectively.
  
  
  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, such receivables are
  automatically written off for financial reporting when certain delinquency
  criteria are met.
  
  <PAGE> 14
  
  Information concerning commercial loss experience and allowance for losses is
  shown below:
  <TABLE>
<CAPTION>  
                                           Years Ended December 31,            

(In Thousands)                  1996       1995       1994       1993       1992  
<S>                           <C>         <C>       <C>        <C>        <C>
Allowance, beginning
  of period                    $6,510     $9,150    $10,250    $11,550    $11,100

Write-offs:
  Leasing and other            (2,761)    (2,706)    (1,790)    (3,726)    (3,750)
  Accounts receivable 
    financing                  (1,320)    (1,261)    (1,497)    (1,870)    (2,522)
      Total write-offs         (4,081)    (3,967)    (3,287)    (5,596)    (6,272)

Recoveries:
  Leasing and other               528        851        547        757      1,416
  Accounts receivable
    financing                     665        625        701        807        634
      Total recoveries          1,193      1,476      1,248      1,564      2,050

Provision for credit losses
  charged (credited) to expense 2,528       (149)       939      2,732      4,672
    
Allowance, end of period:
  Leasing and other             5,150      5,050      7,850      8,350      9,550
  Accounts receivable 
    financing                   1,000      1,460      1,300      1,900      2,000
      Total allowance          $6,150     $6,510    $ 9,150    $10,250    $11,550

Ending receivables as
  a percent of total
  commercial receivables:
    Leasing and other              85%        81%        81%        74%        75%
    Accounts receivable
      financing                    15         19         19         26         25
                                  100%       100%       100%       100%       100%

Allowance as a percent of
  ending receivables             1.24%      1.28%      1.83%      2.00%      1.96%

Write-offs after recoveries
  as a percent of average
  commercial finance 
  receivables                     .59%       .50%       .43%       .73%       .71%

</TABLE>


<PAGE> 15

  Non-accrual commercial receivables totaled $3,189,000, $3,299,000;
  $2,606,000; $5,349,000; and $6,864,000 at December 31, 1996 through 1992,
  respectively.  During 1996, 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 $377,000.  The amount of finance
  charges and interest actually recorded on these receivables during 1996
  totaled $279,000.
  
  Commercial receivables outstanding which were more than three payments
  contractually delinquent and which were still accruing interest totaled
  $916,000; $1,025,000; $1,202,000; $1,443,000; and $2,586,000 at
  December 31, 1996 through 1992, respectively.
  
  Lease Financing and Other
  
  Norwest Financial Leasing, Inc. ("NFLI") operates under two separate
  divisions.  Each division provides a different type of financing and focuses
  on a different market.  Receivables are generated from business production
  offices and a sales force that operates nationwide.
  
  NFLI - Division I is headquartered in Des Moines, Iowa and also has business
  production offices in Riverside, California and Charlotte, North Carolina. 
  Division I specializes in financing commercial equipment such as office
  copiers, telephone systems, small computers, and light industrial equipment. 
  The cost of this equipment ranges from $2,000 to $50,000.  Finance
  receivables are generated primarily from equipment distributors ranging from
  small independently-owned vendors to large equipment manufacturers.
  
  Generally, an end-user will enter into a lease or rental agreement with a
  vendor; after approving credit, Division I 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, Division I 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 Division I
  generally provide for equal monthly payments and normally have an initial
  term of 60 months or less.
  
  NFLI - Division II is headquartered in St. Louis, Missouri.  This division
  leases a variety of health care equipment from blood chemistry analyzers,
  sterilizers, and fluoroscopes to ultrasound equipment.  Cost of the
  equipment can range from $10,000 to above $200,000.  Marketing efforts are
  directed primarily toward manufacturers and distributors of such equipment.
  
  NFLI also holds a portfolio of loans generally secured by commercial real
  estate.  At December 31, 1996, these loans totaled $34.6 million, a decrease
  of $4.1 million for the year.
  
  <PAGE> 16
  
  Accounts Receivable Financing
  
  Norwest Financial Business Credit, Inc. ("NFBC") is engaged in the accounts
  receivable financing business from its headquarters in Des Moines, Iowa. 
  NFBC provides customized financial services for retailers and manufacturers
  of consumer products across the country.  Over 400 high-quality furniture
  stores, a nationally-known manufacturer of household heating and cooling
  systems, and several consumer product suppliers utilize NFBC's services. 
  Generally, NFBC extends credit to a retailer which is secured by the
  retailer's accounts receivable.  NFBC provides credit approval for the
  retailer's accounts, collects payments on these accounts and applies the
  amounts collected toward the repayment of the loan to the retailer. 
  Customer contacts, including billing, collection and customer inquiries, are
  generally done in the retailer's name, thereby providing a "private label"
  revolving credit program.
   
  <PAGE> 17
  
               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 the computer center in
  Norwest Financial's home office.  Branch employees use the computer to
  process loans and payments, to write checks, and to perform bookkeeping
  functions.  The system provides information services to consumer finance
  branch offices of Norwest Financial.  In addition, as of December 31, 1996,
  NFISG had contracts to supply information services to 28 other finance
  companies.  On that date, approximately 3,000 branch offices were being
  served and 6.4 million accounts were being maintained on the system.  
  
  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. Twenty-five subscribing companies were utilizing
  SUPREME at December 31, 1996.  Norwest Financial has installed SUPREME in
  all of its consumer finance branch offices in the United States and Canada. 
  Overall, 6.3 million accounts in over 2,800 locations were being maintained
  on SUPREME at December 31, 1996.  
  
  NFISG has also developed an on-line real-time information system designed
  to meet the processing demands of a broad range of leasing products
  including true leases, rentals, conditional sales contracts, and third-party
  leases.  Named  SUCCESS, this system processes such variables as property,
  sales, use and transit taxes; depreciation; vendor fees; residuals; and
  participation.  NFLI and  one non-affiliate subscriber were utilizing
  SUCCESS at December 31, 1996.
  
  In March 1994, the Company acquired Allied Business Systems, Inc., a
  computer software company headquartered in Macon, Georgia.  Since 1979,
  Allied Business Systems has been providing computer systems and services to
  the consumer finance industry and currently serves over 1,300 locations for
  over 325 companies.
  
  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.  
  
    <PAGE> 18<PAGE>
                  ASSETS UNDER MANAGEMENT
                                
  
  Island Finance, a group of eight consumer finance companies headquartered
  in San Juan, Puerto Rico, was acquired by Norwest in May 1995.  Norwest
  Financial manages Island Finance.  Island Finance provides direct loans to
  individuals through 131 consumer finance offices located in Puerto Rico,
  Panama, the Netherlands Antilles, the U.S. Virgin Islands, Aruba, and Costa
  Rica.  Receivables outstanding on December 31, 1996, totaled $1.3 billion.
  
  Island Finance's financial results and receivables are not included in the
  Company's 1996 or 1995 statements of consolidated earnings or consolidated
  balance sheets, however,  Norwest Financial provides a portion of the
  funding for Island Finance.  At December 31, 1996, Norwest Financial had
  term loans totaling $500 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 8.80% and mature in 2000.   IFPR is also
  a direct issuer of commercial paper in the United States.  At December 31,
  1996, IFPR's commercial paper outstanding totaled $693.9 million.  Other
  entities in the Island Finance group obtain funding by borrowing from
  commercial banks and other affiliates.
  
  
  The number of consumer finance offices and percent of consumer finance
  receivables are shown below:
                                                  Percent of
                                                   Consumer 
                               Branch              Finance 
  Location                     Offices            Receivables
  
  Aruba                           3                   1.9%
  Costa Rica                      3                    .1
  Netherlands Antilles            8                   4.1
  Panama                         15                   2.7
  Puerto Rico                    94                  86.7
  U.S. Virgin Islands             8                   4.5
  
                                131                 100.0%
  
  
  
  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> 19
  
                       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 66% of the Company's
  total indebtedness at December 31, 1996.  The remaining 34% includes
  commercial paper with maturities of nine months or less (28%), and short-term
  debt to affiliates and other short-term debt (6%).
  
  The effective interest rate on commercial paper debt is higher than 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 1996 through 1992
  without giving effect to commitment fees relating to bank credit agreements
  were  6.44%, 6.74%, 6.22%, 6.41%, and 7.29%, respectively.  The
  corresponding figures after giving effect to commitment fees were 6.46%,
  6.76%, 6.25%, 6.45%, and 7.33%, respectively.  Norwest Financial has
  obtained and continues to obtain, at prevailing rates, funds sufficient to
  conduct its business.
  
  The following table contains certain information regarding short-term
  borrowings (except short-term borrowings from affiliates) during the periods
  indicated:
  
<TABLE>
                                               Years Ended December 31,                 

(Dollars in Thousands)             1996       1995         1994        1993       1992
<S>                           <C>          <C>          <C>         <C>         <C>
Bank credit agreements
  at December 31              $1,327,680   $1,456,633   $1,147,700  $1,007,690  $737,500
Number of credit agreements           33           38           34          35        34
Daily average outstanding:
  Commercial paper            $1,713,937   $1,523,898   $1,180,649  $1,065,491  $862,620
  Other loans                      5,199        6,211        4,962      87,761     1,368
    Less excess funds
      investments                 18,884       41,331       26,097      15,436    10,181
    Net average short-term
      borrowings              $1,700,252   $1,488,778   $1,159,514  $1,137,816  $853,807
Ratio of bank credit
  agreements to above                 78%          98%          99%         89%       86%

</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, 1996, and 1995.
  
  <PAGE> 20
  
             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,        
  
                       1996     1995     1994     1993     1992
  
                       2.11     2.13     2.26     2.22     2.02
  
  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 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 the
  consumer finance, commercial finance or 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 ranked among the 25 largest finance companies in the United States in
  terms of total capital funds, but is substantially smaller than the largest
  concerns.  Trans Canada Credit Corporation has been ranked among the largest
  finance companies in Canada.
  
  
                      EMPLOYEE RELATIONS
  
  As of December 31, 1996, the Company and its subsidiaries employed
  approximately  6,900 persons.  Norwest Financial believes its employee
  relations are excellent.
  
  
  <PAGE> 21
  
  Item 2.  Properties.
  
  The Company owns an eleven-story building in Des Moines, Iowa, where its
  principal executive offices are maintained.  The Company also owns an
  adjacent five-story building where other facilities of the Company are
  maintained.  The Company's life insurance subsidiary 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 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.
  
  Item 3.  Legal Proceedings.
  
  Norwest Financial is a defendant in various matters of litigation generally
  incidental to their business.  Although it is difficult to predict the
  ultimate outcome of these cases, management believes, based on discussions
  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 J(2)(c).
  
  <PAGE> 22
  
                           PART II
  
  
  Item 5.  Market for Registrant's Common Equity and Related Stockholder
  Matters.
  
  All of the outstanding common stock of the Company is and was, at all times
  during 1996 and 1995, owned beneficially and of record by a single
  stockholder, the Parent.
  
  The aggregate amount of dividends paid by the Company on its common stock
  (1,000 shares) each quarter during 1996 and 1995 was as follows:
  
  
              (In Thousands)                    1996            1995
  
              First quarter                   $75,000         $50,000
              Second quarter                   75,000          35,000
              Third quarter                    50,000          45,000
              Fourth quarter                   50,000          15,000
  
  
  Certain long-term debt instruments restrict payment of dividends on and
  acquisitions of the Company's common stock.  In addition, such debt
  instruments and many of the Company's bank credit agreements contain certain
  requirements as to maintenance of net worth (as defined).  Approximately
  $408 million of consolidated retained earnings was unrestricted at December
  31, 1996.
  
  Item 6.  Selected Financial Data.
  <TABLE>
  <CAPTION>
                                           Years Ended December 31,                 
  
  
  (In Thousands)          1996          1995        1994         1993         1992
  <S>                 <C>           <C>          <C>          <C>            <C>
  Operating revenues  $1,546,557    $1,419,358   $1,175,285   $1,079,719     $924,348
  
  Net earnings           276,331       267,941      223,340      203,297      164,204 
  
  
  
                                              December 31,                          
  
  
  (In Thousands)          1996         1995         1994         1993         1992
  
  Total assets        $7,760,845    $7,539,259   $6,124,742   $5,261,599   $4,804,062
  
  Long-term debt       4,132,894     4,081,531    3,092,623    2,741,692    2,406,186
  
  </TABLE>
  
  <PAGE> 23
  
  Item 7.  Management's Discussion and Analysis of Financial Condition and
  Results of Operations.
  
  Effective January 1, 1995, the Parent made a capital contribution, without
  consideration, to the Company of the outstanding common stock of Community
  Credit Co. and Dial National Bank (the "Contributed Subsidiaries").  These
  capital contributions to the Company have been accounted for as a merger of
  interests under common control. Community Credit Co. is primarily engaged
  in consumer finance including loans secured by real estate and not secured
  by real estate and sales finance contracts arising from the sale of
  automobiles.  Community Credit Co. 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 (the
  "Transferred Subsidiary") was transferred by way of a non-cash dividend to
  the Parent on November 1, 1994.  The Transferred Subsidiary had assets
  totaling $147.1 million and 39 branch offices at the time of the transfer.
  The transfer did not have a significant impact on the results of operations.
  
  Norwest Financial's total income (revenue) increased 9% in 1996 and 21% in
  1995  ($1,546.6 million in 1996 compared with $1,419.4 million in 1995 and
  $1,175.3 million in 1994).  Total income increased 15% in 1995 excluding the
  Contributed Subsidiaries.
  
  Income from finance charges and interest increased 8% in 1996 and 16% in
  1995 ($1,208.8 million in 1996 compared with $1,118.3 million in 1995 and
  $965.4 million in 1994). Income from finance charges and interest increased
  9% in 1995 excluding the Contributed Subsidiaries. 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:           1996        1995
  
     Consumer                                   10%         18%
     Commercial                                 (1)          6 
     Total                                       9          16 
  
  Rate of charge on finance receivables:       1996       1995        1994
  
     Consumer                                 21.22%     21.56%      21.76%
     Commercial                               14.97      14.69       14.58
     Total                                    20.69      20.92       21.02
  
  <PAGE> 24
  
  Increases in income from finance charges and interest in both 1996 and 1995
  were due primarily to growth in average consumer receivables outstanding. 
  This was offset in part by the decline in the consumer rate of charge. 
  Average consumer receivables outstanding comprise 92% of total average
  finance receivables outstanding.  Growth in average consumer receivables in
  1996 and 1995 was due to regular business activity combined with the
  increase due to the Contributed Subsidiaries.  Excluding the Contributed
  Subsidiaries, average consumer finance receivables increased 10% in 1995.
  
  Changes in the earned rates of charge were due to changes in prevailing
  market rates combined with a change in the portfolio mix.
  
  Insurance premiums and commissions increased 10% in 1996 and 21% in 1995
  ($140.4 million in 1996 compared with $128.1 million in 1995 and $105.7
  million in 1994).  Changes in insurance premiums and commissions are
  generally expected to correspond to changes in average consumer finance
  loans outstanding (those secured by real estate and not secured by real
  estate).  Average consumer finance loans outstanding increased 5% in 1996
  and 11% in 1995. In addition,  one of the Company's insurance subsidiaries
  began providing credit insurance as part of the consumer finance business
  of several affiliates in the second quarter of 1995 and a non-related
  company in the fourth quarter of 1995.  Insurance premiums and commissions
  on this business were $18.6 million and $10.4 million in 1996 and 1995,
  respectively.  Insurance losses and loss expenses decreased 9% in 1996 and
  increased 22% in 1995 ($35.9 million in 1996 compared with $39.2 million in
  1995 and $32.2 million in 1994).  The 1996 decrease was primarily due to
  lower insurance losses incurred on Canadian business.  The increase in 1995
  was related to the increase in insurance premiums and commissions.  The
  Contributed Subsidiaries did not have a significant effect on insurance
  premiums and commissions and insurance losses and loss expenses.
  
  Other income increased 14% in 1996 and 66% in 1995 ($197.3 million in 1996
  compared with $173.0 million in 1995 and $104.3 million in 1994).  In 1995,
  other income would have increased 62% excluding the Contributed
  Subsidiaries.  Income from affiliates combined with an increase in
  investment income accounted for the majority of the increases.  Income from
  affiliates was $54.4 million in 1996 compared to $43.3 million in 1995 and
  $2.1 million in 1994.  The increases in income from affiliates corresponds
  with the increase in notes receivable - affiliates combined with increased
  management fees charged to affiliates.  Average investments held increased
  11% in 1996 and 29% in 1995.
  
  Operating expenses increased 11% in 1996 and 6% in 1995  ($514.9 million in
  1996 compared with $461.9 million in 1995 and $434.4 million in 1994). 
  Operating expenses increased 2% excluding the Contributed Subsidiaries in
  1995.  The increase in 1996 is primarily due to increases in employee
  compensation and benefits and other costs resulting from business expansion. 
  Norwest Financial was operating 1,073 consumer finance branches at December
  31, 1996 compared with 1,029 and 942 at December 31, 1995, and 1994,
  respectively.     
  
  <PAGE> 25
  
  Interest and debt expense increased 4% in 1996 and 38% in 1995 ($372.9
  million in 1996 compared with $359.1 million in 1995 and $259.6 million in
  1994).  Changes in interest and debt expense result primarily from (1)
  changes in the amount of borrowings outstanding and (2) changes in the cost
  of those borrowings.
  
  
  Increase in average debt outstanding:        1996        1995
  
     Short-term                                  12%         26%
     Long-term                                    8          27
     Total                                        9          26
  
  Cost of funds:                               1996        1995        1994
  
     Short-term                                5.36%       6.12%       4.65%
     Long-term                                 6.90        7.00        6.87
     Total                                     6.44        6.74        6.22
  
  
  Changes in average debt outstanding result primarily from the change in
  average finance receivables outstanding combined with the change in average
  notes receivable - affiliates.  Average finance receivables and average
  notes receivable - affiliates, combined, increased by 10% in 1996 and 22%
  in 1995.
  
  Provision for credit losses increased 38% in 1996 and 32% in 1995 ($198.5
  million in 1996 compared with $143.3 million in 1995 and $108.9 million in
  1994).  Provision for credit losses increased 26% in 1995 excluding the
  Contributed Subsidiaries. Increases in average finance receivables
  outstanding contributed to the increase in the provision for credit losses. 
  Average finance receivables increased 9% in 1996 and 16% in 1995.  During
  the past two years Norwest Financial, along with the consumer finance
  industry, has experienced an increase in net write-offs.  Net write-offs as
  a percentage of average net receivables outstanding were 3.30% in 1996
  compared with 2.46% in 1995 and 2.06% in 1994.  Management believes the
  allowance for credit losses at December 31, 1996 and 1995, is adequate to
  absorb expected losses in the finance receivables portfolio.
  
  Income taxes remained unchanged in 1996 and increased 26% in 1995.  Earnings
  before income taxes increased 2% in 1996 and 22% in 1995.  The effective tax
  rates were 34.9% in 1996, 35.6% in 1995, and 34.4% in 1994.
  
  <PAGE> 26
  
  Borrowings constitute the largest part of Norwest Financial's
  capitalization.  At December 31, 1996, 85% of the Company's capital had been
  obtained from borrowings and 15% from stockholder's equity.  Sixty-six
  percent of Norwest Financial's borrowings was in fixed-rate term borrowings
  with original maturities of more than one year.  The remaining 34% includes
  commercial paper with maturities of nine months or less (28%), and other
  short-term debt (6%).  At December 31, 1995, short-term borrowings comprised
  32% of total borrowings.  This consisted of commercial paper with maturities
  of nine months or less (29%) and short-term debt to affiliates and other
  short-term debt (3%).  Short-term borrowings as a percent of total
  borrowings averaged 30% in 1996 and 29% in 1995. 
  
  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, 1996, lines of credit and
  revolving credit agreements totaling $1,328 million were being maintained
  at 33 unaffiliated banks; the entire amount was available on that date.
  
  The Company and a Canadian subsidiary obtain its long-term debt capital
  primarily from (i) the issuance of debt securities to the public through
  underwriters on a firm-commitment basis, (ii) the issuance of debt
  securities to institutional investors, and (iii) term borrowings from
  commercial banks.  The Company also obtains long-term debt from the issuance
  of medium term notes (which may 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.
  
  <PAGE> 27
  
  Item 8.  Financial Statements and Supplementary Data.
  
  
  
  
  
  
  
  
  
  
  
  
  
                   NORWEST FINANCIAL, INC.
  
              Consolidated Financial Statements
  
  
  
  
  
  
  
  
  
  
  <PAGE> 28
  
  
  
  
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                                <PAGE> 29
  
  
  
  
  
  
  
  
          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 Norwest Corporation) and
  subsidiaries as of December 31, 1996 and 1995, and the related
  consolidated statements of earnings and retained earnings and of cash
  flows for each of the three years in the period ended December 31, 1996. 
  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, 1996 and 1995, and the results of
  their operations and their cash flows for each of the three years in the
  period ended December 31, 1996, in conformity with generally accepted
  accounting principles.
  
  
  
  \s\Deloitte & Touche LLP
  
  January 14, 1997
  
  
  
  
  
  
  
                 
  Deloitte Touche
  Tohmatsu
  International
                 
  
  <PAGE> 30
                   NORWEST FINANCIAL, INC.
  
                 Consolidated Balance Sheets
  
                    (Thousands of Dollars)
  
  

<TABLE>
<CAPTION>
                                                            December 31,        

           Assets                                       1996              1995
<S>                                                 <C>               <C>
Cash and cash equivalents                           $  141,692        $   72,991
Available-for-sale securities (note 2)                 816,980           757,291 


Finance receivables (note 3):
  Consumer:         
    Loans                                            3,324,655         3,172,895
    Sales finance contracts                          1,683,655         1,567,629
    Other                                              447,021           586,840
  Commercial                                           494,104           507,480

           Total finance receivables                 5,949,435         5,834,844

  Less allowance for credit losses (note 4)            169,133           158,618

           Finance receivables - net                 5,780,302         5,676,226


Notes receivable - affiliates (note 19)                574,344           552,005


Property and equipment (at cost, less
  accumulated depreciation of $89,373 for
  1996 and $94,334 for 1995)                            75,068            63,888

Deferred income taxes (note 11)                         34,456            40,072

Other receivables from affiliate (note 11)                                31,643

Other assets                                           338,003           345,143



           Total assets                             $7,760,845        $7,539,259


</TABLE>




See accompanying notes to consolidated financial statements.

<PAGE> 31

                       NORWEST FINANCIAL, INC.

                     Consolidated Balance Sheets

                        (Thousands of Dollars)

<TABLE>
<CAPTION>

                                                             December 31,        

           Liabilities and
        Stockholder's Equity                            1996              1995
<S>                                                  <C>               <C>
Loans payable - short-term (note 5):
  Commercial paper                                   $1,732,095        $1,739,683
  Other                                                 195,000           218,800
  Affiliates                                            173,006                  
Unearned insurance premiums and commissions (note 3)    136,564           140,020
Insurance claims and policy reserves (note 3)            35,893            34,683
Accrued interest payable                                 75,765            76,916
Other payables to affiliates (note 11)                    5,565                  
Other liabilities                                       216,031           210,029
Long-term debt (note 6)                               4,132,894         4,081,531

           Total liabilities                          6,702,813         6,501,662


Commitments and contingencies
  (notes 9 and 11)

Stockholder's equity:
  Common stock without par value
    (authorized 1,000 shares,
     issued 1,000 shares)                                 3,855             3,855
  Additional paid in capital                             90,766            90,766
  Retained earnings (notes 10 and 11)                   959,697           933,366
  Foreign currency translation adjustment                (5,991)           (5,393)
  Net unrealized holding gain on
    available-for-sale securities,
    net of income taxes (note 2)                          9,705            15,003 

           Total stockholder's equity                 1,058,032         1,037,597


           Total liabilities and 
             stockholder's equity                    $7,760,845        $7,539,259


</TABLE>




See accompanying notes to consolidated financial statements.

<PAGE> 32

                          NORWEST FINANCIAL, INC.

         Statements of Consolidated Earnings and Retained Earnings

                          (Thousands of Dollars)


<TABLE>
<CAPTION>
                                                      Years Ended December 31,      

                                                  1996         1995           1994
<S>                                           <C>           <C>           <C>
Income:
  Finance charges and interest                $1,208,794    $1,118,265    $  965,355
  Insurance premiums and commissions             140,418       128,093       105,672
  Other income (note 2)                          197,345       173,000       104,258

     Total income                              1,546,557     1,419,358     1,175,285


Expenses:
  Operating expenses (note 14)                   514,890       461,910       434,383
  Interest and debt expense (note 7)             372,859       359,079       259,605
  Provision for credit losses (note 4)           198,480       143,318       108,870
  Insurance losses and loss expenses              35,901        39,237        32,187

     Total expenses                            1,122,130     1,003,544       835,045


     Earnings before income taxes                424,427       415,814       340,240

Income taxes (note 11)                           148,096       147,873       116,900

     Net earnings                                276,331       267,941       223,340


Retained earnings - January 1                    933,366       764,295       634,626
 
                                               1,209,697     1,032,236       857,966

Dividends                                       (250,000)     (145,000)      (93,671)

Contributed Subsidiaries (note 1)                               46,130               



Retained earnings - December 31               $  959,697    $  933,366    $  764,295

</TABLE>


See accompanying notes to consolidated financial statements.

<PAGE> 33
                          NORWEST FINANCIAL, INC.
                   Statements of Consolidated Cash Flows
             Increase (Decrease) in Cash and Cash Equivalents
                          (Thousands of Dollars)
<TABLE>
<CAPTION>
                                                            Years Ended December 31,      
                                                          1996         1995        1994
<S>                                                   <C>          <C>          <C>
Cash flows from operating activities:
  Net earnings                                        $  276,331   $  267,941   $  223,340 
  Adjustments to reconcile net earnings to
    net cash flows from operating activities:
    Provision for credit losses                          198,480      143,318      108,870
    Depreciation and amortization                         27,613       25,404       27,339
    Deferred income taxes                                  8,632       10,882      (38,843)
    Other receivables from affiliate                      31,643      (31,643)
    Other assets                                          30,925      (51,263)     (30,942)
    Unearned insurance premiums and commissions           (3,456)       9,655       18,899 
    Insurance claims and policy reserves                   1,210        1,479        3,438 
    Accrued interest payable                              (1,151)      22,380       10,185 
    Other payables to affiliates                           5,565       (7,170)      (1,663)
    Other liabilities                                      6,002       (3,946)      70,284 

Net cash flows from operating activities                 581,794      387,037      390,907

Cash flows used for investing activities:   
  Finance receivables:
    Principal collected                                5,587,314    4,897,983    4,650,536
    Receivables originated or purchased               (5,889,870)  (5,728,651)  (5,116,657)
  Proceeds from sales of securities                      145,791       99,959       81,945
  Proceeds from maturities of securities                  65,296       60,216       69,005
  Purchase of securities                                (279,090)    (269,315)    (270,864)
  Net additions to property and equipment                (25,626)     (18,013)     (14,399)
  Net increase in notes receivable - affiliates          (22,339)    (356,325)    (343,011)
  Cash and cash equivalents of contributed 
    subsidiaries received                                               2,477
  Other                                                  (37,763)      (7,689)     (22,728)

Net cash flows used for investing activities            (456,287)  (1,319,358)    (966,173)

Cash flows from financing activities:
  Net increase in loans payable -
    short-term                                           141,618      171,493      281,740 
  Proceeds from long-term debt:
    Senior                                               525,000    1,229,411      955,961
    Subordinated                                                                    45,000 
  Repayments of long-term debt:                                         
    Senior                                              (308,424)    (233,438)    (637,530)
    Subordinated                                        (165,000)     (80,650)     (12,500)
  Additional paid in capital                                                        19,000
  Dividends paid                                        (250,000)    (145,000)     (93,671)

Net cash flows from (used for) financing activities      (56,806)     941,816      558,000 

Net increase (decrease) in cash and cash equivalents      68,701        9,495      (17,266)

Cash and cash equivalents beginning of period             72,991       63,496       80,762

Cash and cash equivalents end of period               $  141,692   $   72,991   $   63,496
</TABLE>
See accompanying notes to consolidated financial statements.

<PAGE> 34
                     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"), which is a wholly-owned subsidiary
  of Norwest Corporation.  Effective January 1, 1995, the Parent made a
  capital contribution, without consideration, to the Company of the
  outstanding common stock of Community Credit Co. and Dial National Bank (the
  "Contributed Subsidiaries").  These capital contributions to the Company
  have been accounted for as a merger of interests under common control.  The
  common stock of one of the Company's consumer finance subsidiaries, (the
  "Transferred Subsidiary"), was transferred by way of a non-cash dividend to
  the Parent on November 1, 1994. 
  
  Available-for-sale Securities.  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
  separate component of stockholder's equity 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.
  
  Finance Charges and Interest:
  
    Consumer.  Finance charges and interest are earned primarily using the
      interest method.
  
    Commercial:
  
         Accounts Receivable Financing.  Dealer discounts are deferred at
           the time receivables are recorded and taken into income as
           payments are received.  Finance charges are recognized on the
           interest method as accounts are billed.  When a loan is delinquent
           and in management's opinion the collectibility of interest is
           doubtful, interest income is no longer accrued for financial
           purposes.
  
         Leasing and Other.  Finance charges and interest are earned using
           the interest method.  No income is accrued on receivables which
           are more than three payments contractually delinquent.
  
  
  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.
  
  <PAGE> 35
  
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Continued
  
  
  1.     Significant Accounting Policies, Continued:
  
  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
  possible losses on existing receivables that may become uncollectible based
  on evaluations of collectibility of receivables and prior credit loss
  experience.
  
  Finance receivables which appear to be uncollectible or to require
  inordinate collection costs are written off. Consumer receivables, other
  than finance receivables in Canada, those owned by Community Credit Co., and
  other consumer receivables comprise 74% of outstanding consumer receivables. 
  These receivables, other than loans secured by real estate over $25,000, are
  written off for financial reporting if no payment is applied during the
  three-month period immediately preceding the balance sheet date and the
  receivable is three or more payments contractually delinquent.  The
  remaining 26% of consumer receivables and commercial finance receivables are
  written off for financial reporting when certain delinquency criteria are
  met.
  
  Derivative Instruments.  The company does not use derivative instruments as
  a means of asset and liability managment.
   
  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. 
  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
  11).
  
  Retirement Plan.  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 12).
  
  <PAGE> 36
  
                   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 and involuntary unemployment
  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 agents' 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 Canadian
  operations are translated at the exchange rate as of the balance sheet date. 
  Canadian 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 stockholder's equity.
  
  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, 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.
  
  <PAGE> 37
  
  
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Continued
  <TABLE>
  <CAPTION>
  
  2.     Available-for-sale Securities
  
  The amortized cost and market value of available-for-sale securities were:
  
                                        December 31, 1996     December 31, 1995 
                                     Amortized   Market    Amortized   Market
(In Thousands)                          Cost      Value       Cost      Value 
<S>                                  <C>        <C>        <C>        <C>
U.S. Treasury and federal agencies    $397,754  $401,343    $337,193  $344,368
States and political subdivisions       84,926    85,717     102,374   103,704
Other (corporate bonds, stocks,       
  and collateralized mortgage
  obligations)                         319,531   329,920     294,642   309,219

      Total                           $802,211  $816,980    $734,209  $757,291

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

                                       December 31, 1996     December 31, 1995
                                        Gross Unrealized      Gross Unrealized
(In Thousands)                          Gains      Losses     Gains     Losses

U.S. Treasury and federal agencies     $ 5,276     $1,687     $ 7,548   $  373
States and political subdivisions          864         73       1,371       41
Other (corporate bonds, stocks,       
  and collateralized mortgage
  obligations)                          13,218      2,829      16,282    1,705

      Total                            $19,358     $4,589     $25,201   $2,119

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

                                      December 31, 1996     December 31, 1995 
                                     Amortized   Market    Amortized   Market
(In Thousands)                          Cost      Value       Cost      Value 

In one year or less                   $ 92,943  $ 93,641    $ 85,855  $ 87,674
After one year through five years      408,079   413,762     396,102   407,092
After five years through ten years     174,950   177,134     180,556   185,048
After ten years                        126,239   132,443      71,696    77,477

      Total                           $802,211  $816,980    $734,209  $757,291
</TABLE>

  Norwest Financial computes realized gains and losses using the specific
  identification method.  Total gross realized gains and losses from the sale
  of marketable securities were $10,057,000 and $781,000, respectively, in
  1996; $8,057,000 and $1,260,000, respectively, in 1995; $4,032,000 and
  $2,036,000, respectively, in 1994.
  
  The carrying amounts of securities on deposit under statutory or other
  requirements at December 31, 1996 and 1995, were $9,654,000 and $7,664,000,
  respectively.
  
  <PAGE> 38
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Continued
  
  
  2.     Available-for-sale Securities, Continued:
  
  Interest and dividends from available-for-sale securities and cash
  equivalents were $52,791,000, $49,613,000, and $38,298,000 for the years
  ended December 31, 1996, 1995 and 1994, respectively.
  
  3.     Finance Receivables.
  
  Loans are generally repayable in monthly installments 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 this 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 finance receivables during
  the years ended December 31, 1996, 1995 and 1994, approximated
  $4,510,330,000,  $4,130,253,000, and $3,959,755,000, 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 finance receivables
  were approximately $146,313,000 and $150,292,000 at December 31, 1996, and
  1995, respectively.
  
  At December 31, 1996, contractual maturities of commercial receivables were
  as follows: $215,025,000 were due in one year or less; $259,500,000 were due
  after one year through five years, and $19,579,000 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 finance receivables include Canadian receivables of $545,658,000
  and $489,220,000 at December 31, 1996, and 1995, respectively.
  
  <PAGE> 39
  
  
  
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Continued
  
  
  4.     Allowance for Credit Losses.
  
  The analysis of the allowance for credit losses is as follows:
  <TABLE>
  <CAPTION>
                                                     Years Ended December 31,  
  
  (In Thousands)                                     1996      1995      1994
  <S>                                              <C>       <C>       <C>
  Allowance for credit losses beginning of year    $158,618  $135,952  $125,126
  Provision for credit losses charged to expense    198,480   143,318   108,870
  Write-offs:  United States                       (187,274) (127,689)  (93,089)
               Canada                               (24,597)  (21,244)  (17,794)
  Recoveries:  United States                         16,451    13,860    12,968
               Canada                                 3,803     3,523     3,535
  Allowance related to receivables contributed,
    acquired, or transferred                          3,652    10,898    (3,664)
  
  Allowance for credit losses end of year          $169,133  $158,618  $135,952
  </TABLE>
  
  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
  $1,327,680,000 at December 31, 1996; 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, 1996,
  were to remain in effect and unused throughout 1997, the Company would pay
  approximately $956,000 in commitment fees.
  
  <PAGE> 40
  
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Continued
  
  
  5.     Loans Payable - Short-term, Continued:
  
  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:
  <TABLE>
  <CAPTION>
                                              1996             1995             1994
  <S>                             <C>                <C>              <C>
  Weighted average annual interest
  rate on commercial paper and
  other short-term debt:
  
  During December                             5.15%            5.87%            5.86%
  
  During December after considering
    the effect of commitment fees             5.21             5.93             5.94
  
  For the year                                5.36             6.10             4.53
  
  For the year after considering
    the effect of commitment fees             5.42             6.16             4.64
  
  Average daily amount of commercial
  paper and other short-term debt
  outstanding during the year       $1,719,136,000   $1,530,109,000   $1,185,611,000
  
  Maximum amount of commercial paper
  and other short-term debt
  outstanding at any month-end
  during the year                   $2,100,101,000   $1,958,483,000   $1,751,044,000
  
  </TABLE>
  The weighted average annual interest rate 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 1996, 1995,
  and 1994 was  5.30%, 8.91%, and 4.95%, respectively. 
  
  <PAGE> 41                    
  
                    NORWEST FINANCIAL, INC.
  
     Notes to Consolidated Financial Statements, Continued
  
  6.     Long-term Debt.
  
  Long-term debt outstanding:
  <TABLE>
  <CAPTION>
                                                          December 31,        
  
  (In Thousands)                                      1996              1995
  
  <S>                                             <C>               <C>
  Senior - United States:
     7.10 % due 1996                              $                 $  150,000
     8.60 % due 1996                                                     1,400
     8.85 % due 1996                                                     2,000
     8-7/8% due 1996                                                   100,000
     6    % due 1997                                 150,000           150,000
     6-1/4% due 1997                                 150,000           150,000
     6-1/2% due 1997                                 150,000           150,000
     6-1/2% due 1997                                 150,000           150,000
     8.95 % due 1997                                   1,000             2,200
     9.00 % due 1997                                   2,000             4,000
     10.13% due 1997                                     550             1,100
     5-1/2% due 1998                                 150,000           150,000
     6.23 % due 1998                                 150,000           150,000
     7.34 % due 1998                                   2,000             2,000
     8-1/2% due 1998                                 100,000           100,000
     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 1997-99                                7,000            10,200
     9.50 % due 1997-99                               10,000            10,000
     5-1/8% 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
     7-3/4% due 2001                                 100,000           100,000
     6-1/4% 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 1997-2002                             10,000            10,000
     6-1/8% due 2003                                 150,000           150,000
     6-3/8% due 2003                                 150,000
     6.93 % due 1998-2003                             15,000            15,000
     7    % due 2003                                 150,000           150,000
     6    % due 2004                                 150,000           150,000
     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
     Medium-term notes*                              225,000                  
  
              Total senior - United States         3,897,550         3,632,900
  </TABLE>
  *  Senior medium term notes have maturities ranging from 1999 to 2001 and   
      interest rates from 6.375% to 6.68%.
  
  <PAGE> 42
                    NORWEST FINANCIAL, INC.
                                 
     Notes to Consolidated Financial Statements, Continued
  
  6.     Long-term Debt, Continued:
  
  Long-term debt outstanding, continued 
  <TABLE>
  <CAPTION>
                                                         December 31,         
  
  (In Thousands)                                      1996              1995
  <S>                                             <C>               <C>
  Senior - Canada:
     5.40 % due 1996                              $                 $    7,332
     5.96 % due 1996                                                    21,995
     8.26 % due 1996                                                    14,663
     8.38 % due 1997                                  21,888            21,995
     6.25 % due 1998                                  72,960            73,316
     8.65 % due 1998                                   3,648             3,666
     8.50 % due 1999                                  54,720            54,987
     7.80 % due 2000                                   7,296             7,332
  
              Total senior - Canada                  160,512           205,286
  
              Total senior                         4,058,062         3,838,186
  
  
  Senior subordinated - United States:
     8.375% due 1996                                                    25,000
     7.34 % due 1998                                   2,000             2,000
     Medium-term notes*                               50,000           190,000
  
           Total senior subordinated                  52,000           217,000
  
  
  Other                                               22,832            26,345
  
  Total long-term debt outstanding                $4,132,894        $4,081,531
  </TABLE>
  
  * Senior subordinated medium-term notes outstanding mature in 1997 and have
      interest rates from 5.20% to 7.875%.
  
  Other debt represents senior debt secured by lease receivables and related
  equipment under lease.  At December 31, 1996, other debt had a weighted
  average rate of 9.0% and a final contractual maturity in 1998.
  
  Contractual maturities of long-term debt for the years 1997 through 2001 are
  $683,963,000; $512,149,000; $589,487,000; $611,463,000; and $279,167,000,
  respectively.
  
  
  <PAGE> 43
  
                    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)                              1996         1995         1994
  
  Short-term - affiliates                   $     83     $  1,142     $    626
  Short-term - commercial paper & other       92,352       93,780       54,027
  Long-term                                  274,586      258,376      200,245
  Amortization of debt expense                 5,838        5,781        4,707
  
  Total interest and debt expense           $372,859     $359,079     $259,605
  
  
  8. Operations by Country.
  
  The following is a summary of total income, earnings before income taxes, and
  total assets by country:  (Results for Puerto Rico sales finance branches and
  Guam are included in United States amounts.)
  
  (In Thousands)                         1996          1995          1994    
  
  Total income:
    United States                     $1,371,044    $1,265,937    $1,050,069
    Canada                               175,513       153,421       125,216
      Total                           $1,546,557    $1,419,358    $1,175,285
  
  Earnings before income taxes:
    United States                     $  358,667    $  362,581    $  303,817
    Canada                                65,760        53,233        36,423
      Total                           $  424,427    $  415,814    $  340,240
  
  Total assets at December 31:
    United States                     $7,128,734    $6,982,254    $5,655,594
    Canada                               632,111       557,005       469,148
      Total                           $7,760,845    $7,539,259    $6,124,742
  
  9. Leased Assets and Lease Commitments.
  
  Lease terms are generally for three to seven years.  Commitments at
  December 31, 1996, under operating leases having initial or remaining lease
  terms in excess of one year are estimated to approximate $50 million.
  
  10. Dividend Restrictions.
  
  Certain long-term debt instruments restrict payment of dividends on and
  acquisitions of the Company's common stock.  In addition, such debt instru-
  ments and many of the Company's bank credit agreements contain certain
  requirements as to maintenance of net worth (as defined).  Approximately
  $408 million of consolidated retained earnings was unrestricted at December
  31, 1996.
  <PAGE> 44
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Continued
  
  
  11.  Income Taxes.
  
  The Company and its subsidiaries are included in the consolidated federal
  income tax return of Norwest Corporation.  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 $5.6 million was included in other payables to affiliates
  at December 31, 1996. Current income taxes receivable of $31.6 million was
  included in other receivables from affiliate at December 31, 1995.  The
  Company's Canadian subsidiaries file separate federal and provincial returns
  in Canada.
  
  At December 31, 1996, 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.  This life insurance subsidiary does not contemplate
  distributing dividends from these retained earnings.  The amount of
  unrecognized deferred tax liability at December 31, 1996, was $15.4 million.
  
  
  Income taxes for the years, 1996, 1995, and 1994 are composed of the
  following elements:
  
                                              Years Ended December 31,      
  
  
  (In Thousands)                       1996            1995            1994
  
  Current:
    Federal                          $110,569       $113,452       $113,168
    State                               2,529          2,043          2,625
    Foreign                            26,300         21,915         11,601
  Deferred:
    Federal and state                  10,776         13,239        (13,572)
    Foreign                            (2,078)        (2,776)         3,078
  
  Total income taxes                 $148,096       $147,873       $116,900
  
  
  Income before taxes from operations outside the United States was $65.8
  million, $53.2 million,  and $33.4 million for years ended December 31,
  1996, 1995, and 1994, 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 available-for-sale securities.
  
  <PAGE> 45
  
  
  
  
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Continued
  
  
  12.  Retirement Plans.
  
  The Company has a defined benefit pension plan which covers United States
  employees who meet certain age and service requirements (the "NFI Plan"). 
  Pension benefits provided are based on the employee's highest compensation
  in three consecutive calendar 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 Company's Canadian subsidiary, Trans Canada Credit Corporation ("TCC"),
  has a non-contributory defined benefit pension plan (the "TCC Plan") which
  covers employees who meet certain service requirements.  Pension benefits
  under the TCC 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 TCC 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
  Canadian/Quebec Pension Plan Earnings Ceiling for each year of service (not
  to exceed 35 years of service).
  
  <PAGE> 46
  
  
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Continued
  
  
  12.  Retirement Plans, Continued:
  
  The funded status and reconciliation to the balance sheet of the NFI Plan
  and the TCC Plan, combined, for the years ended December 31, 1996 and
  December 31, 1995 are presented below:
  <TABLE>
<CAPTION>
                                                     Years Ended December 31,

(In Thousands)                                         1996            1995
<S>                                                 <C>              <C>
Actuarial present value of benefit obligations:
  Accumulated benefit obligation, including 
    vested benefits of $54,800 and $49,518 at
    December 31, 1996, and 1995, respectively        $(64,468)       $(58,500)

  Projected benefit obligation for service
    rendered to-date                                 $(89,290)       $(87,244)
Plan assets at fair value*                            103,066          84,574
Plan assets greater (less) than projected     
  benefit obligation                                   13,776          (2,670)
Unrecognized net assets being
  amortized through 2000                               (1,485)         (1,690)
Unrecognized prior service costs                         (773)           (920)
Unrecognized net loss from past experience
  different from that assumed and effects
  of changes in assumptions                               635           6,042 

Prepaid pension cost at December 31                  $ 12,153        $    762 
</TABLE>

  *  Consists primarily of marketable bonds and debentures and obligations
       of the United States Government and its agencies and includes
       $3,057,000 invested in the Norwest Short Term Investment Fund at
       December 31, 1996.
  
  Assumptions used in the accounting for the NFI Plan were:
  
                                                            As of December 31,
                                                            1996          1995
  
  Weighted average discount rate                            7.0%          7.0%
  Expected long-term rate of return on assets               8.0           6.0
  Rate of increase in future compensation levels            5.0           6.0
  
  Assumptions used in the accounting for the TCC Plan were:
  
  
                                                            As of December 31,
                                                            1996          1995
  
  Weighted average discount rate                          8.0%         8.0%
  Expected long-term rate of return on assets             8.0          8.0
  Rate of increase in future compensation levels          6.5          6.5
  
  <PAGE> 47
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Continued
  
  
  12. Retirement Plans, Continued:
  
  The components of net pension expense for the NFI Plan and TCC Plan,
  combined, for 1996 and 1995 and for the NFI Plan for 1994 are presented
  below:
  <TABLE>
  <CAPTION>
                                                     Years Ended December 31, 
  
  (In Thousands)                                    1996       1995      1994
  <S>                                             <C>        <C>       <C>
  Service cost - benefits earned during the year  $ 4,204    $ 4,605   $ 3,216
  Interest cost on projected benefit obligation     6,045      5,944     4,168
  Actual return on plan assets                     (9,645)   (12,474)   (1,912)
  Net amortization and deferral*                    3,544     10,292     1,602 
  
  Net periodic pension expense                    $ 4,148    $ 8,367   $ 7,074
  
  
  *  Consists of the net effects of delayed recognition of certain events
       (for  example, unanticipated investment performance) arising during the
       current  period and amortization (recognition) of the net unrecognized
       effects of past similar events over a five year period.
  
  The NFI 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 $1.8 million and $1.9 million
  in 1996 and 1995, respectively.
  
  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 
  $13,694,000, $10,842,000, and $11,500,000 for the years ended December 31,
  1996, 1995, and 1994, respectively.
  
  <PAGE> 48
  
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Continued
  
  13. Postretirement Benefits.
  
  The Company provides certain health care and life benefits for substantially
  all of its retired United States employees (the "NFI Plan"). 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. 
  The Company's Canadian subsidiary, Trans Canada Credit Corporation ("TCC")
  provides certain health and life insurance benefits to its retirees (the
  "TCC Plan").
  
  The accumulated postretirement benefit obligation, funded status, and
  reconciliation to the balance sheet for the NFI Plan and the TCC Plan,
  combined, are presented below:
  
  (In Thousands)                                    Years ended December 31,
                                                       1996           1995
   
        Retirees                                   $(11,150)      $ (8,798)
        Fully eligible plan participants               (243)           (57)
        Other active plan participants              (35,695)       (28,063)
        Accumulated post-retirement benefit
        obligation                                  (47,088)       (36,918)
              
        Plan assets at fair value                    10,100                
        Accumulated post-retirement benefit 
        obligation in excess of plan assets         (36,988)       (36,918)
        
        Unrecognized transition obligation           17,790         18,901
        Unrecognized net loss                         5,634          2,483
        Unrecognized prior service cost                 759            802
  
        Accrued postretirement benefit liability   $(12,805)      $(14,732)
  
  The Company began funding the accumulated postretirement benefit obligation
  of the NFI Plan during 1996.  Plan assets consist primarily of obligations
  of state and local governments and mutual funds invested in obligations of
  state and local governments.
  
  Net postretirement benefit expense for the NFI Plan and the TCC Plan,
  combined, consisted of the following components:
  
</TABLE>
<TABLE>
  <CAPTION>
  (In Thousands)                                      Years ended December 31, 
                                                  1996       1995       1994
<S>                                             <C>         <C>        <C>
      Service cost - benefits earned
        during the year                          $3,361     $2,733     $2,085
      Interest cost on accumulated 
        postretirement benefit obligation         3,116      2,439      2,018
      Amortization of transition obligation       1,112      1,112      1,112
      Amortization of unrecognized net loss       1,189        545        383
      Amortization of unrecognized prior 
        service cost                                 43         44           
      Net periodic postretirement 
        benefit expense                          $8,821     $6,873     $5,598
</TABLE>
<PAGE> 49
  
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Continued
  
  
  13. Postretirement Benefits, Continued:
  
  
  The assumed health care cost trend rate used in measuring the NFI Plan's
  accumulated postretirement benefit obligation as of December 31, 1996 was
  10% for 1997 decreasing each successive year until it reaches 8% in 2000,
  after which it remains constant.  The TCC Plan assumed a 1997 health care
  trend of 14% decreasing each sucessive year until it reaches 6% in 2006. 
  A one percent increase in the assumed health care cost trend rate for each
  year would increase the combined accumulated postretirement benefit
  obligation as of December 31, 1996 by approximately $9.9 million and
  combined net postretirement benefit expense by $1.7 million for the year. 
  The assumed discount rate used in determining the accumulated postretirement
  benefit obligation was 7% at both December 31, 1996, and December 31, 1995.
  
  
  14. Summary of Operating Expenses.
  
  Following is a summary of operating expenses for the years 1996, 1995, and
  1994:
  
<TABLE>
<CAPTION>
                                               Years Ended December 31,      
<S>                                    <C>            <C>            <C>
(In Thousands)                           1996           1995           1994

Salaries                               $250,788       $226,165       $195,903
Other employee benefits                  32,390         25,773         37,649
Depreciation and amortization            27,613         25,404         27,339
Rent - real estate leases                26,599         24,691         22,686
Payroll taxes                            19,908         17,680         16,360
Data and voice communication             16,390         16,118         15,884
Collection and credit information        16,147         14,487         14,343
Postage                                  14,593         13,770         11,912
Advertising                              14,271         13,404         12,731
Travel                                   11,030          8,825          8,646
Stationery and supplies                   9,263          7,497          7,319
Taxes other than income taxes             6,663          7,785          6,656
Rent - data processing
  equipment leases                        5,644          5,636          6,556
Management fees paid to Norwest 
  Corporation                             5,230          3,835          2,321
Equipment repairs and maintenance         4,815          4,835          4,929
Retirement plan                           4,148          8,367          8,434
Other                                    49,398         37,638         34,715

Total operating expenses               $514,890       $461,910       $434,383

</TABLE>
  
                   NORWEST FINANCIAL, INC.
                                
    Notes to Consolidated Financial Statements, Continued
  
  
  
  15. Statements of Consolidated Cash Flows.
  
  The Company and its subsidiaries consider highly liquid debt instruments
  purchased with a 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)                        1996            1995           1994
  
  Cash paid for:
       Interest                        $370,144        $328,255       $242,386
       Income taxes                     110,026         181,022        118,907
  
  
  
  16. Concentrations of Credit Risk.
  
  The Company and its subsidiaries are primarily engaged in the consumer
  finance business.  The average balance outstanding with any individual
  customer is not significant.  At December 31, 1996, the Company had 1,073
  consumer finance offices in 47 states, Guam, Puerto Rico, and all ten
  Canadian provinces compared with 1,029 consumer finance offices in 46
  states, Guam, Puerto Rico, and ten Canadian provinces at December 31, 1995. 
  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.   Insurance premium financing is provided for liability and
  material damage auto insurance in California, Arizona, Texas, and 10 states
  located throughout the southeastern United States.
  
  A subsidiary of the Company also provides accounts receivable financing
  primarily to high quality furniture stores across the country.  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.
  <PAGE 51>
  
                   NORWEST FINANCIAL, INC.
                                
    Notes to Consolidated Financial Statements, Continued
  
  
  
  17. Selected Quarterly Financial Data (Unaudited).
  
  Selected quarterly financial data for 1996 and 1995 were as follows:
  <TABLE>
  <CAPTION>
  (In Thousands)                       Interest     Provision
                           Total       and Debt     for Credit
  Quarter Ended            Income      Expense        Losses       Net
  Earnings
  <S>                     <C>          <C>          <C>            <C>
  March 31, 1995          $322,275      $79,431       $30,314         $56,977
  
  June 30, 1995            353,991       92,545        31,497          68,756
  
  September 30, 1995       361,940       92,165        39,680          64,286
  
  December 31, 1995        381,152       94,938        41,827          77,922
  
  March 31, 1996           374,328       94,704        45,952          61,999
  
  June 30, 1996            378,110       92,703        43,884          66,998
  
  September 30, 1996       383,332       92,557        49,295          67,557
  
  December 31, 1996        410,787       92,895        59,349          79,777
  
  </TABLE>
  
  18. 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 and cash equivalents is a reasonable estimate of
  fair value.
  
  Available-for-sale Securities.  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 assets (note 2).
  
  Finance Receivables and Notes Receivable - Affiliates.  The interest rates
  on the receivables outstanding at December 31, 1996, and 1995, 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.
  <PAGE> 52
  
                   NORWEST FINANCIAL, INC.
  
    Notes to Consolidated Financial Statements, Concluded
  
  
  18. Fair Value of Financial Instruments, Continued:
  
  Other Receivables from Affiliate and 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
  receivables from affiliate and 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
  or on current rates offered to the Company for similar debt of the same
  remaining maturities, the fair value of long-term debt is $4,147,816,000 as
  of December 31, 1996 and  $4,195,715,000 as of December 31, 1995.
  
  
  19. Notes Receivable - Affiliates.
  
  Notes receivable - affiliates were $574,344,000 and $552,005,000 at
  December 31, 1996, and 1995, respectively.  Notes receivable - affiliates
  include a combination of short-term and long-term notes receivable. 
  Effective May 4, 1995, Norwest Financial, Inc.  made term loans totaling
  $500 million to an affiliate, Island Finance Puerto Rico, Inc.  The loans
  have a weighted average interest rate of 8.80% and mature in 2000.  The
  remainder of notes outstanding at December 31, 1996 and December 31, 1995,
  earn interest at rates that approximate the cost of borrowings of the
  Company.
  
  <PAGE> 53
  
  
  Item 9.  Changes in and Disagreements with Accountants on Accounting and
  Financial Disclosure.
  
  Not applicable.
  
                           PART III
  
  Item 10.  Directors and Executive Officers of the Registrant.
  
  Omitted in accordance with General Instruction J(2)(c).
  
  Item 11.  Executive Compensation.
  
  Omitted in accordance with General Instruction J(2)(c).
  
  Item 12.  Security Ownership of Certain Beneficial Owners and Management.
  
  Omitted in accordance with General Instruction J(2)(c).
  
  Item 13.  Certain Relationships and Related Transactions.
  
  Omitted in accordance with General Instruction J(2)(c).
  
  
                           PART IV
  
  Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
  
  (a) The following documents are filed as a part of this report:
  
  (1) Financial Statements:
  
     a.    Consolidated balance sheets as of December 31, 1996, and 1995.
  
     b.    Statements of consolidated earnings and retained earnings for
             the  years ended December 31, 1996, 1995, and 1994.
  
     c.    Statements of consolidated cash flows for the years ended    
               December 31, 1996, 1995, and 1994.
  
  (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.
  
  (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).
  <PAGE> 54
     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, 1996, 1995, 1994, 1993, and 1992.
  
     *(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 a 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 J(2)(b).
  *Filed herewithin.
  
  (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> 55
  
                          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
  20th day of March 1997.
  
                                           NORWEST FINANCIAL, INC.
  
  
                                           By        \s\James R. Berens
                                                        James R. Berens
                                                           President
  
  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 20th day of March 1997.
  
  
             \s\David C. Wood             
                David C. Wood       
             Chairman of the Board
        (Principal Executive Officer)
  
  
           \s\James R. Berens             
              James R. Berens  
           President and Director
  
  
        \s\Patricia J. McFarland          
           Patricia J. McFarland    
    Vice President, General Counsel and
           Secretary and Director
  
  
                                          
              Stanley S. Stroup
                  Director
  
  
  
            \s\Dennis E. Young            
               Dennis E. Young
   Senior Vice President, Chief Financial 
       Officer, Treasurer and Director
        (Principal Financial Officer)
  
  
           \s\Eric Torkelson              
              Eric Torkelson  
        Vice President and Controller
       (Principal Accounting Officer)