UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549


                                    FORM 10-Q

(Mark One)
[ X ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the quarterly period ended September 30, 1999

                                       OR

[   ]    TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE  ACT OF 1934
         For the  transition  period  from  _________  to _________


                                     1-12897
                            (Commission File Number)

                         PROVIDIAN FINANCIAL CORPORATION
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

         Delaware                                       94-2933952
-------------------------------                     -------------------
(State or other Jurisdiction of                      (I.R.S. Employer
Incorporation or Organization)                     Identification  No.)

               201 Mission Street, San Francisco, California 94105
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)


                                 (415) 543-0404
               ---------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)


                                 Not Applicable
 ---------------------------------------------------------------------
 (Former name, former address and former fiscal year, if changed since
 last report)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes   X     No
     ---      ---

     As of October 29, 1999, there were  141,970,825  shares of the registrant's
Common Stock, par value $0.01 per share, outstanding.


<PAGE>


                         PROVIDIAN FINANCIAL CORPORATION
                                    FORM 10-Q

                                      INDEX

                               September 30, 1999


PART I.   FINANCIAL INFORMATION                                             Page

          Item 1.  Financial  Statements (unaudited):
                     Condensed Consolidated Statements of Financial
                       Condition...............................................3
                   Condensed Consolidated Statements of Income.................4
                   Condensed Consolidated Statements of Changes in
                     Shareholders' Equity......................................5
                   Condensed Consolidated Statements of Cash Flows.............6
                   Notes to Condensed Consolidated Financial
                     Statements............................................... 7

          Item 2.  Management's Discussion and Analysis of Financial
                     Condition and Results of Operations......................12

PART II.  OTHER INFORMATION

          Item 1.  Legal Proceedings..........................................29

          Item 6.  Exhibits and Reports on Form 8-K...........................29

Signatures....................................................................30

<PAGE>

PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements.
<TABLE>

Condensed Consolidated Statements of Financial Condition (Unaudited)
Providian Financial Corporation and Subsidiaries
<CAPTION>
                                                                                    September 30            December 31
(Dollars in thousands, except share data)                                               1999                    1998
                                                                                    ------------            -----------
<S>                                                                                 <C>                     <C>
Assets:
Cash and cash equivalents                                                             $ 253,732               $ 176,348
Federal funds sold                                                                      938,164                 297,869
Investment securities:
  Available-for-sale                                                                    251,838                 114,858
  Held-to-maturity                                                                      126,234                 318,817
Loans receivable, less allowance for credit losses of $832,783 at
  September 30, 1999 and $451,245 at December 31, 1998                                8,657,300               5,282,014
Premises and equipment, net                                                             127,916                  82,858
Interest receivable                                                                      79,720                  51,801
Due from securitizations                                                                593,739                 454,374
Deferred taxes                                                                          488,386                 306,234
Other assets                                                                            217,079                 146,042
                                                                                    -----------             -----------

        Total assets                                                                $11,734,108             $ 7,231,215
                                                                                    ===========             ===========

Liabilities:
Deposits:
  Non-interest bearing                                                              $    35,087             $    48,220
  Interest bearing                                                                    7,318,474               4,624,078
                                                                                    -----------             -----------
                                                                                      7,353,561               4,672,298

Short-term borrowings                                                                   959,438                 472,500
Long-term borrowings                                                                  1,029,360                 399,757
Deferred fee revenue                                                                    504,677                 334,617
Accrued expenses and other liabilities                                                  563,516                 388,856
                                                                                    -----------             -----------
        Total liabilities                                                            10,410,552               6,268,028

Company obligated mandatorily  redeemable capital securities of subsidiary trust
  holding solely junior subordinated deferrable
  interest debentures of the Company (Capital Securities)                               160,000                 160,000

Shareholders' Equity:
Common stock, par value $.01 per share (authorized: 800,000,000
  shares; issued and outstanding: September 30, 1999 - 141,902,782 shares;
  December 31, 1998 - 141,732,008 shares)                                                   954                     954
Retained earnings                                                                     1,240,554                 866,005
Cumulative other comprehensive income                                                      (680)                   (320)
Common stock held in treasury - at cost: (September 30, 1999 - 1,217,198
  shares; December 31, 1998 - 1,405,972 shares)                                         (77,272)                (63,452)
                                                                                    -----------             -----------
        Total shareholders' equity                                                    1,163,556                 803,187
                                                                                    -----------             -----------
        Total liabilities and shareholders' equity                                  $11,734,108             $ 7,231,215
                                                                                    ===========             ===========

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

<PAGE>

<TABLE>

Condensed Consolidated Statements of Income (Unaudited)
Providian Financial Corporation and Subsidiaries
<CAPTION>


                                                                      Three Months Ended                     Nine Months Ended
                                                                          September 30                          September 30
                                                                ---------------------------         --------------------------------
(Dollars in thousands, except per share data)                      1999              1998              1999                  1998
                                                                ---------         ---------         ----------            ----------

<S>                                                             <C>               <C>               <C>                   <C>
Interest income:
  Loans                                                         $ 424,597         $ 210,565         $1,062,171            $ 565,848
  Investment securities                                            14,651             7,661             41,622               23,175
                                                                ---------         ----------        ----------            ---------
  Total interest income                                           439,248           218,226          1,103,793              589,023

Interest expense:
  Deposits                                                         89,073            51,153            227,302              146,276
  Borrowings                                                       28,546             9,997             71,088               31,161
                                                                ---------         ----------        ----------            ---------
  Total interest expense                                          117,619            61,150            298,390              177,437

        Net interest income                                       321,629           157,076            805,403              411,586

Provision for credit losses                                       288,279           168,217            725,574              343,724
                                                                ---------         ----------        ----------            ---------

        Net interest income after provision
        for credit losses                                          33,350           (11,141)            79,829               67,862

Non-interest income:
  Servicing and securitizations                                   157,802           156,341            437,776              427,134
  Credit product fee income                                       484,153           199,236          1,240,782              416,491
  Other                                                             9,163             1,723             21,274                2,387
                                                                ---------         ----------        ----------            ---------
                                                                  651,118           357,300          1,699,832              846,012
Non-interest expense:
  Salaries and employee benefits                                  132,579            64,965            350,350              185,610
  Solicitation                                                    115,972            53,258            317,650              141,533
  Occupancy, furniture and equipment                               23,745            12,963             57,926               35,317
  Data processing and communication                                33,593            16,005             88,207               53,839
  Other                                                           127,299            63,315            314,001              165,185
                                                                ---------         ----------        ----------            ---------
                                                                  433,188           210,506          1,128,134              581,484
                                                                ---------         ----------        ----------            ---------

        Income before income taxes                                251,280           135,653            651,527              332,390

Income tax expense                                                100,408            53,092            260,623              130,858
                                                                ---------         ----------        ----------            ---------
        Net Income                                              $ 150,872         $  82,561         $  390,904            $ 201,532
                                                                =========         ==========        ==========            =========

Earnings per share - basic                                      $    1.07         $    0.58         $     2.77            $    1.42
                                                                =========         ==========        ==========            =========
Earnings per share - assuming dilution                          $    1.04         $    0.57         $     2.69            $    1.39
                                                                =========         ==========        ==========            =========

Cash dividends paid per share                                   $    0.05         $    0.03         $     0.15            $    0.10
                                                                =========         ==========        ==========            =========

Weighted average common shares outstanding - basic (000)          141,296           142,044            141,316              142,116
                                                                =========         ==========        ==========            =========
Weighted average shares and assumed conversions (000)             145,070           145,500            145,553              145,189
                                                                =========         ==========        ==========            =========

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

<PAGE>

<TABLE>

Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited)
Providian Financial Corporation and Subsidiaries
<CAPTION>



                                                                                           Cumulative     Common
                                                                Additional                 Other          Stock
                                                    Common      Paid-In      Retained      Comprehensive  Held in
(Dollars in thousands, except per share data)       Stock       Capital      Earnings      Income         Treasury       Total
                                                    ------      ----------   -----------   -------------  ---------      ----------
<S>                                                 <C>         <C>          <C>           <C>            <C>            <C>
Balance at December 31, 1997                        $ 954       $ 4,217      $  599,856    $      -       $ (9,913)      $  595,114
Comprehensive income:
     Net Income                                                                 201,532                                     201,532
     Other comprehensive income, net of
        income tax:
           Unrealized loss on securities net of
              income taxes of $30                                                               (266)                          (266)
                                                                                                                           --------
Comprehensive income                                                                                                        201,266
Cash dividend:
     Common - $0.10 per share                                                   (14,272)                                    (14,272)
Cash Dividend Declared:
     Common - $0.05 per share                                                    (7,101)                                     (7,101)
Stock Dividend Declared:
     Dividend rate of 50%. Par $0.01                                473            (473)                                       -
Purchase of 1,561,844 common
      shares for treasury                                         4,251                                    (74,293)         (70,042)
Exercise of stock options and other awards                      (12,334)        (13,733)                    31,580            5,513
Issuance of restricted and unrestricted
      stock less forfeited shares                                 1,420                                      3,685            5,105
Deferred compensation related to
      grant of restricted and unrestricted
      stock less amortization of $2,890                          (2,215)                                                     (2,215)
Put warrant premium                                               1,325                                                       1,325
Net tax effect from exercise of stock options
     and issuance of restricted stock                             2,863                                                       2,863

                                                    -----       -------      ----------    ---------      --------       ----------
Balance at September 30, 1998                       $ 954       $  -         $  765,809    $    (266)     $(48,941)      $  717,556
                                                    =====       =======      ==========    =========      ========       ==========

Balance at December 31, 1998                        $ 954       $    -       $  866,005    $    (320)     $(63,452)      $  803,187
Comprehensive income:
     Net Income                                                                 390,904                                     390,904
     Other comprehensive income, net of
        income tax:
           Unrealized loss on securities net of
                income taxes of $205                                                            (311)                          (311)
           Foreign currency translation adjustments
                net of income taxes of $33                                                       (49)                           (49)
                                                                                                                         ----------
     Other comprehensive income                                                                                                (360)
                                                                                                                         ----------
Comprehensive income                                                                                                        390,544
Cash dividend:
     Common - $0.15 per share                                                   (21,272)                                    (21,272)
Purchase of 938,619 common
      shares for treasury                                        25,723                                    (97,572)         (71,849)
Exercise of stock options and other awards                      (57,564)          4,917                     74,919           22,272
Issuance of restricted and unrestricted
      stock less forfeited shares                                  (440)                                     8,833            8,393
Deferred compensation related to
      grant of restricted and unrestricted
      stock less amortization of $5,711                          (2,682)                                                     (2,682)
Net tax effect from exercise of stock options
     and issuance of restricted stock                            34,963                                                      34,963
                                                    -----       ----------   ----------    ---------      --------       ----------
Balance at September 30, 1999                       $ 954       $    -       $1,240,554    $    (680)     $(77,272)      $1,163,556
                                                    =====       ==========   ==========    =========      ========       ==========

See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>

<TABLE>

Condensed Consolidated Statements of Cash Flows (Unaudited)
Providian Financial Corporation and Subsidiaries
<CAPTION>

                                                                                                         Nine Months Ended
                                                                                                           September 30
                                                                                               ----------              ----------
(Dollars in thousands)                                                                            1999                     1998
                                                                                               ----------              ----------
<S>                                                                                            <C>                     <C>
Operating Activities:
    Net Income                                                                                 $  390,904              $  201,532
    Adjustments to reconcile net income to net cash provided by operating activities:
       Provision for credit losses                                                                725,574                 343,724
       Depreciation and amortization of premises and equipment                                     23,308                  13,020
       Amortization of net loan acquisition costs                                                  41,182                  34,750
       Amortization of deferred compensation
         related to restricted and unrestricted stock                                               5,711                   2,890
       Amortization of deferred fee revenue                                                      (411,667)               (117,319)
       Increase in deferred income tax benefit                                                   (181,917)               (108,912)
       Increase in deferred fee revenue                                                           681,273                 299,514
       Increase in interest receivable                                                            (27,919)                (18,651)
       Net increase in other assets                                                              (112,195)                (37,367)
       Net increase in accrued expenses and other liabilities                                     110,077                 106,697
                                                                                               ----------              ----------

                             Net Cash Provided by Operating Activities                          1,244,331                 719,878

Investing Activities:
       Net decrease (increase) in money market instrument investments                              99,882                 (17,825)
       Net cash used for loan originations and principal
         collections on loans receivable                                                       (5,083,567)               (782,028)
       Net increase in securitized loans                                                        1,109,720               1,050,019
       Portfolio acquisitions                                                                    (127,119)             (1,922,766)
       (Increase) decrease in due from securitizations                                           (139,365)                 82,214
       Purchases of investment securities                                                        (170,742)                (98,860)
       Proceeds from maturities of  investment securities                                         125,950                  15,075
       Increase in federal funds sold                                                            (640,295)               (101,079)
       Net purchases of premises and equipment                                                    (68,366)                (27,391)
                                                                                               ----------              ----------
                             Net Cash Used by Investing Activities                             (4,893,902)             (1,802,641)

Financing Activities:
       Net increase in deposits                                                                 2,681,263                 713,955
       Proceeds from issuance of term federal funds                                             1,718,000                 594,000
       Repayment of term federal funds                                                         (1,712,000)               (435,000)
       Increase (decrease) in other short-term borrowings                                         480,938                 (82,000)
       Increase in long-term borrowings                                                           629,603                 399,737
       Purchase of treasury stock                                                                 (71,849)                (70,042)
       Put warrant premium                                                                           -                      1,325
       Dividends paid                                                                             (21,272)                (14,272)
       Proceeds from exercise of stock options                                                     22,272                   5,513
                                                                                               ----------              ----------
                             Net Cash Provided by Financing Activities                          3,726,955               1,113,216
                                                                                               ----------              ----------

Net Increase in Cash and Cash Equivalents                                                          77,384                  30,453
Cash and cash equivalents at beginning of period                                                  176,348                 112,522
                                                                                               ----------              ----------
Cash and cash equivalents at end of period                                                     $  253,732              $  142,975
                                                                                               ==========              ==========


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

<PAGE>

PROVIDIAN FINANCIAL CORPORATION
Notes to Condensed Consolidated Financial Statements
September 30, 1999  (Unaudited)

     Note  1 -  Basis  of  Presentation

     The condensed  consolidated  financial  statements  include the accounts of
Providian Financial Corporation and its wholly owned subsidiaries  (collectively
referred  to as the  "Company").  The  Company's  subsidiaries  offer a range of
consumer  lending  products,  deposit  products  and  membership  services.  The
principal operating  subsidiaries of the Company are Providian National Bank and
Providian Bank, which are financial institutions principally engaged in consumer
lending  activities.  Providian  Financial  Corporation  also has a  subsidiary,
Providian Bancorp Services,  which provides administrative and customer services
to its consumer lending affiliates.

         The accompanying  unaudited condensed consolidated financial statements
of the  Company  have  been  prepared  in  accordance  with  generally  accepted
accounting   principles  for  interim   financial   information   and  with  the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes  required by generally accepted
accounting  principles for complete consolidated  financial  statements.  In the
opinion of management,  all adjustments considered necessary to a fair statement
of the  results  for the  interim  period  presented  have  been  included.  The
preparation  of financial  statements  in  conformity  with  generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
Actual  results  could differ from those  estimates.  Operating  results for the
three and nine  month  periods  ended  September  30,  1999 are not  necessarily
indicative of the results for the year ended December 31, 1999. The notes to the
financial  statements  contained in the Company's Annual Report on Form 10-K for
the year  ended  December  31,  1998  should be read in  conjunction  with these
consolidated  financial  statements.  All significant  intercompany balances and
transactions  have been  eliminated.  Certain  prior  period  amounts  have been
reclassified to conform to the 1999 presentation.

Note 2 - Earnings Per Share

     The  following  table  sets  forth  the  computation  of both the basic and
assumed conversion methods of earnings per share.
<TABLE>
<CAPTION>

                                                        Three Months Ended September 30       Nine Months Ended September 30

(In thousands, except per share data)                      1999             1998              1999              1998
                                                         ---------       ----------        ----------        ----------
                                                         <C>             <C>               <C>               <C>
<S>
Income available to common stockholders                  $ 150,872       $   82,561        $  390,904        $  201,532
                                                         =========       ==========        ==========        ==========

Weighted average shares outstanding--basic                 141,296          142,044           141,316           142,116
Effect of dilutive securities
   Restricted stock issued--non vested                         549              488               551               516
   Employee stock options                                    3,088            2,968             3,686             2,556
   Forward purchase contracts                                  137              -                 -                 -
                                                         ---------       -----------       ----------        ----------
Dilutive potential common shares                             3,774             3,456            4,237             3,072
Adjusted weighted average shares and assumed             ---------       -----------       ----------        ----------
  conversions                                              145,070           145,500          145,553           145,189
                                                         =========       ===========       ==========        ==========

Earnings per share--basic                                $    1.07       $      0.58       $     2.77        $     1.42
                                                         =========       ===========       ==========        ==========

Earnings per share--assuming dilution                    $    1.04       $      0.57       $     2.69        $     1.39
                                                         =========       ===========       ==========        ==========

</TABLE>


Note 3 - Loans Receivable and Allowance for Credit Losses
         The following is a summary of the Company's loans receivable:
<TABLE>
<CAPTION>

(Dollars in thousands)                                September 30, 1999        December 31, 1998
                                                      ------------------        -----------------
<S>                                                   <C>                       <C>
Credit card and line of credit loans                  $   8,294,250             $   5,129,835
Home loans                                                1,220,043                   606,657
Other                                                         6,442                     4,614
                                                      -------------             -------------
                                                          9,520,735                 5,741,106
Allowance for credit losses                                (832,783)                 (451,245)
Net deferred origination fees                               (30,652)                   (7,847)
                                                      -------------             -------------
                                                      $   8,657,300             $   5,282,014
                                                      =============             =============
</TABLE>

 The activity in the allowance for credit losses for the nine months ended
 September 30, 1999 and 1998 was as follows:

<TABLE>
<CAPTION>

                                                      Nine Months Ended September 30
(Dollars in thousands)                                  1999              1998
                                                  -----------          ----------
<S>                                               <C>                  <C>
Balance at beginning of period                    $   451,245          $  145,312
Provision for credit losses                           725,574             343,724
Reserve acquired                                       14,310             178,459
Credit Losses                                        (414,783)           (279,877)
Recoveries                                             56,437              21,459
                                                  -----------          ----------
Net credit losses                                    (358,346)           (258,418)
                                                  -----------          ----------
Balance at end of period                          $   832,783          $  409,077
                                                  ===========          ==========
</TABLE>

Note 4 - Senior and Subordinated Bank Notes

     During the first  nine  months of 1999,  the  Company,  through  one of its
banking  subsidiaries,  issued an  additional  $630 million of senior bank notes
through a program  that was  established  in 1998.  The total notes  outstanding
under this program as of September 30, 1999 was $1 billion.

Note 5 - Shareholders' Equity

     During  the  third  quarter  of 1999,  the  Company  extended  an  existing
agreement  and entered into a new  agreement to  purchase,  on a forward  basis,
shares of its common stock.  At the Company's  election,  the  agreements may be
settled on a physical basis or, subject to certain conditions, on a net basis in
shares of the  Company's  common stock or in cash. To the extent that the market
price of the  Company's  common stock on a  settlement  date is greater than the
forward  purchase price, the Company will receive the net  differential.  To the
extent that the market price of the Company's  common stock on a settlement date
is lower than the forward  purchase  price,  the Company  will settle the agreed
upon premium  amount.  As of September 30, 1999, the agreements  covered 568,913
shares of the Company's  common stock at a weighted forward price of $110.73 per
share.  During the nine months ended  September 30, 1999,  settlements  from the
forward purchase  agreements resulted in the receipt of 248,319 shares of common
stock and the payment of $1.3 million in premium amounts recorded as adjustments
to additional paid in capital.

Note 6 - Comprehensive Income

     The components of accumulated other  comprehensive  income,  net of related
tax, at September 30, 1999 and December 31, 1998 are as follows:
<TABLE>
<CAPTION>

                                                          Unrealized          Foreign         Cumulative Other
                                                           Loss on            Currency         Comprehensive
(Dollars in thousands)                                    Securities         Translation         Income
                                                          ----------         -----------     -----------------
<S>                                                       <C>                <C>             <C>
Beginning balance, December 31, 1998                      $    (320)         $     -         $    (320)
Current year other comprehensive income                        (311)              (49)            (360)
                                                          ---------          --------        ---------
Ending balance, September 30, 1999                        $    (631)         $    (49)       $    (680)
                                                          =========          ========        =========
</TABLE>

Note 7 - Commitments and Contingencies

     Since  May 1999,  following  media  coverage  highlighting  certain  of the
Company's sales and collections  practices, a number of lawsuits have been filed
against  the  Company  and,  in some  cases,  against  certain of the  Company's
subsidiaries  by  current  and  former   customers  of  the  Company's   banking
subsidiaries.  An action is also  pending  in which the  plaintiffs  allege,  in
general,  that the Company and certain of its officers made false and misleading
statements  in  violation of the federal  securities  laws.  The lawsuits  filed
against the Company are at a very early  stage.  An informed  assessment  of the
ultimate  outcome or potential  liability  associated  with these matters is not
feasible at this time. Due to the  uncertainties of litigation,  there can be no
assurance that the Company will prevail on all claims made against it.  However,
management  believes  that the Company has  substantive  defenses and intends to
defend the actions vigorously.

     Following the initial media coverage the San Francisco District  Attorney's
Office  began  an  investigation   into  the  Company's  sales  and  collections
practices, including the marketing of certain fee-based products and the posting
of customer payments.  In addition,  on November 5, 1999 the Company received an
inquiry from the Connecticut  Attorney  General's Office seeking  information in
connection with a civil  investigation  into the Company's  credit card issuance
and billing  practices.  The remedies  available to the San  Francisco  District
Attorney's Office and the Connecticut Attorney General's Office include, but are
not limited to, damages,  penalties, fines and/or injunctive relief. The Company
continues to cooperate with the San Francisco District Attorney's Office through
ongoing  discussions  but there can be no  certainty  as to the outcome of those
discussions.  The Company  also has met with and intends to  cooperate  with the
Connecticut Attorney General's Office.


     In response  to  customer  concerns,  the  Company  introduced  an enhanced
customer satisfaction  program. In addition,  the Company engaged an independent
consultant  to  examine  payment  crediting  processes.  After  performing  test
procedures at each of the six sites at which the Company  processes  credit card
payments,  four of which  are  operated  by  outside  vendors,  the  independent
consultant  found  no  evidence  that the  Company  or any of its  vendors  were
intentionally withholding payments from processing.

     In the course of implementing the enhanced customer  satisfaction  program,
the Company  discovered a programming error that had resulted,  over a period of
months,  in the billing of erroneous late fees related to specific weekend days.
These errors have been  corrected,  and refunds  have been  provided to affected
customers.

Note 8 - Stock Ownership Plan

     In May 1999,  the  Company's  Board of Directors  approved  grants of stock
options to certain non-officer  employees under the Company's newly adopted 1999
Non-Officer  Equity  Incentive Plan.  Under the Plan, the non-officer  employees
received options exercisable for varying numbers of the Company's stock based on
their  length  of  employment  or other  factors.  Options  covering  a total of
1,031,650  shares of the Company's  stock were granted in July 1999.  Additional
grants will be made in January 2000 and July 2000 to certain other employees who
complete a minimum of one year of service and satisfy other conditions.

Note 9 - Segment Information

     The operations of the Company consist of two primary segments:  Credit Card
Loan and Home Loan.  The Credit Card Loan segment  represents  consumer  lending
products,  including unsecured,  secured and partially secured credit cards, and
includes non-credit card unsecured  revolving lines of credit.  Credit Card Loan
customer  relationships  are initiated  primarily  through  direct  marketing or
portfolio acquisitions from other financial institutions.  The Home Loan segment
represents  home equity loans,  home equity lines of credit and other home loans
made to  individuals  targeted  by the  Company's  home loan  product  marketing
programs.  Membership services revenue,  which is received from both Credit Card
Loan and Home Loan  customers,  is included in the  respective  segment  summary
financial information.

     The  Company's  securitized  loans are not  considered  loans  owned by the
Company and therefore are not shown on the statement of financial condition.  It
is, however,  the Company's  practice to analyze its financial  performance on a
managed loan portfolio  basis.  Segment  information  is presented  below on the
Company's managed loan portfolios.

     The following is a summary of the Company's  segment  activity on a managed
loan basis for the nine months ended September 30, 1999 and 1998:
<TABLE>
<CAPTION>

                                                    Credit               Home
(Dollars in thousands)                               Card                Loan          Other              Total
                                                --------------         ---------      --------       --------------
<S>
Three Months Ended September 30, 1999           <C>                    <C>            <C>            <C>
  Revenue                                       $    1,055,841           42,584        10,221        $    1,108,646
  Profit or loss                                $      270,900           (2,818)      (11,024)       $      257,058
  Assets                                        $   16,636,125        1,720,043        49,994        $   18,406,162
Three Months Ended September 30, 1998
  Revenue                                       $      612,636           23,047          --          $      635,683
  Profit or loss                                $      138,777             (260)         --          $      138,517
  Assets                                        $   10,748,482        1,029,704          --          $   11,778,186

Nine Months Ended September 30, 1999
  Revenue                                       $    2,796,685          105,702        20,357        $    2,922,744
  Profit or loss                                $      735,727           (1,437)      (41,053)       $      693,237
  Assets                                        $   16,636,125        1,720,043        49,994        $   18,406,162
Nine Months Ended September 30, 1998
  Revenue                                       $    1,554,476           59,981          --          $    1,614,457
  Profit or loss                                $      334,771            6,549          --          $      341,320
  Assets                                        $   10,748,482        1,029,704          --          $   11,778,186

</TABLE>

     The impact of securitizations on the Company's  consolidated  statements of
income is to reduce net interest income and the provision for credit losses, and
to increase  non-interest  income.  The  following  is a  reconciliation  of the
Company's segment activity on a managed basis to the consolidated  statements of
income of the Company for the periods ended September 30, 1999 and 1998:


<PAGE>

<TABLE>
<CAPTION>
                                                 Three months Ended September 30    Nine months Ended September 30

(Dollars in thousands)                                1999            1998          1999              1998
                                                  -----------------------------  ----------------------------------
<S>                                               <C>              <C>           <C>              <C>
Total segment profits                             $  257,058       $  138,517    $  693,237       $  341,320
Corporate and other                                   (5,778)         (2,864)       (41,710)          (8,930)
                                                  -----------      ----------    -----------      -----------
   Income before income taxes                     $  251,280       $  135,653    $  651,527       $  332,390
                                                  ===========      ==========    ===========      ===========
</TABLE>

Note 10 - Business Combination

     On February 18, 1999, the Company  acquired the assets of GetSmart.com  and
assumed certain related liabilities.  GetSmart.com is an online referral service
for consumer  borrowers which provides loan  information and lender  connections
through  proprietary search and application  technology.  The purchase price was
$32.1 million,  paid in cash,  plus $1.5 million in transaction  costs,  and the
Company assumed liabilities of $4.4 million.

     The acquisition has been accounted for as a purchase and, accordingly,  the
results of  operations  of  GetSmart.com  have been  included  in the  Company's
consolidated financial statements from the date of acquisition.

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

Introduction

     Providian  Financial  Corporation  (the "Company") is a leading provider of
consumer lending products,  including credit cards,  home loans,  secured credit
cards, and membership services. In addition,  the Company offers various deposit
products.  The  Company  offers  its  products  primarily  through  its  banking
subsidiaries,  Providian  National Bank, a national bank, and Providian  Bank, a
Utah industrial loan corporation.  The Company's products are offered to a broad
spectrum of consumers.  Credit card products  range from gold and platinum cards
with high credit  lines to lower line  classic and secured  cards  designed  for
consumers underserved by traditional financial institutions. The primary factors
affecting the  profitability  of the  Company's  consumer  lending  business are
growth in the number of customer  accounts and  outstanding  loan balances,  net
interest   spread  on  loans,   fee  revenue,   credit  usage,   credit  quality
(delinquencies and credit losses), level of solicitation and marketing expenses,
and account servicing efficiency.

Forward-Looking Information

     Certain  statements  contained  herein include  forward-looking  statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended,  and are subject
to the "safe  harbor"  created  by those  sections.  Forward-looking  statements
include   expressions  of  "belief,"   "anticipation,"   or   "expectations"  of
management,  statements as to industry trends or future results of operations of
the Company, and other statements which are not historical fact. Forward-looking
statements  are based on certain  assumptions  by management  and are subject to
risks and  uncertainties  that could cause actual  results to differ  materially
from those in the  forward-looking  statements.  These  risks and  uncertainties
include,  but are not limited to,  competition,  delinquencies,  credit  losses,
vendor   relationships,   funding  costs  and  availability,   general  economic
conditions,  government policy and regulations, risks related to growth, product
development,  acquisitions  and operations,  litigation and Year 2000 readiness.
These and other risks and uncertainties are described in detail in the Company's
1998 Annual Report on Form 10-K under the heading  "Cautionary  Statements," and
in  other  filings  made  by  the  Company  with  the  Securities  and  Exchange
Commission. Readers are cautioned not to place undue reliance on forward-looking
statements,  which speak only as of the date hereof.  The Company  undertakes no
obligation to update any forward-looking statements.

Earnings Summary

     Net  income  for the three  months  ended  September  30,  1999 was  $150.9
million,  an  increase  of 83% over net  income of $82.6  million  for the three
months ended  September 30, 1998. Net income for the nine months ended September
30,  1999 was  $390.9  million,  an  increase  of 94% over net  income of $201.5
million  for the nine  months  ended  September  30,  1998.  This  increase  was
primarily  attributable  to  continued  growth in  customer  accounts  and loans
outstanding and strong growth in fee revenue.

     In May 1999, following extensive media coverage highlighting certain of the
Company's sales and collections  practices,  the Company  introduced an enhanced
customer satisfaction  program. In addition,  the Company engaged an independent
consultant  to  examine  payment-crediting   processes.  After  performing  test
procedures at each of the six sites at which the Company  processes  credit card
payments,  four of which  are  operated  by  outside  vendors,  the  independent
consultant  found  no  evidence  that the  Company  or any of its  vendors  were
intentionally withholding payments from processing.

     In the course of implementing the enhanced customer  satisfaction  program,
the Company  discovered a programming error that had resulted,  over a period of
months,  in the billing of erroneous late fees related to specific weekend days.
These errors have been  corrected,  and refunds  have been  provided to affected
customers. In June 1999 the Company recorded a one-time charge of $20 million to
cover the estimated cost of such refunds.

     The Company continued to strengthen net interest margins while relying less
on low  introductory  rates to attract  customers.  As of  September  30,  1999,
managed loans, which include  on-balance sheet and securitized loans,  increased
by $6.6  billion,  or 56%,  over  September  30, 1998.  This growth was achieved
through  increases in the Company's loan originations  (particularly  loans made
under lower line credit card products)  combined with strategic  acquisitions of
credit card portfolios and activation of existing customer accounts. The Company
continues to evaluate  acquisitions on an opportunistic basis as the credit card
market  continues its  consolidation.  While the  acquisitions  environment  may
provide many opportunities, the focus of the Company's acquisition strategy will
continue to be guided by its return driven approach.

     The Company's  managed net interest  margin on loans increased to 12.40% in
the third  quarter of 1999 from 12.01% for the same  period in 1998,  reflecting
growth in higher  yield  portfolios  and the impact of repricing  programs.  The
managed net credit loss rate for the third  quarter of 1999  decreased  to 6.40%
from 7.77% for the same period in 1998, reflecting improved credit loss rates on
our core and acquired  portfolios.  The 30+ day managed delinquency rate for the
third quarter of 1999  increased to 5.20% from 4.70% for the second  quarter and
reflects the seasoning of the Company's lower line asset classes. This seasoning
is expected to result in a reversal of the favorable loan loss trend the Company
has enjoyed during the first three quarters of 1999, with the managed net credit
loss rate  expected  to rise back to the 7% range  during the fourth  quarter of
1999. The dollar contribution to managed revenue from non-interest income in the
third  quarter  increased  more than 110% over the same period in 1998 to $560.6
million,  due to increased  revenue from activity and loan  performance fees and
membership  services revenue.  The Company reinvested a portion of the increased
managed revenue to strengthen loan loss reserves,  increase marketing investment
and build infrastructure, through the expansion of the employee base and product
support systems.  Year over year,  non-interest  expense  increased $223 million
during  the  third  quarter  of  1999 to  $433.2  million,  reflecting  expenses
associated with servicing a greater number of customers and increased  marketing
activity.

     The Company's return on average assets continued to improve,  increasing to
5.62% for the third quarter of 1999.  The Company's  market focus is to seek out
profitable consumer segments and apply its risk adjusted, return driven approach
to  targeting  and  pricing.   The  Company  believes  this  strategy  has  been
responsible  for its  continued  overall  superior  financial  performance.  The
Company  continued to  strengthen  its balance sheet during the third quarter of
1999  with  improved  profitability,  combined  with a  high  level  of  capital
retention, and was able to increase its return on equity to 54.89% for the third
quarter of 1999 from 45.74% for the same period in 1998.

Managed Consumer Loan Portfolio and the Impact of Securitization

     The Company securitizes unsecured credit cards, home equity lines of credit
and secured  and  partially  secured  credit card  receivables.  For  additional
discussion  of the  Company's  securitization  activities,  see  "--Funding  and
Liquidity."  Securitized  assets sold to external  investors are not  considered
assets of the Company and  therefore are not shown on the statement of financial
condition.  It is,  however,  the  Company's  practice to analyze its  financial
performance on a managed loan portfolio  basis. In order to do so, the Company's
income  statement and statement of financial  condition are adjusted to add back
the effect of  securitizations.  The following  table  summarizes  the Company's
managed loan portfolio:
<PAGE>

<TABLE>
<CAPTION>
                                                                     Three Months Ended                      Nine Months Ended
                                                                         September 30                          September 30
                                                         -----------------------------------         -------------------------------
(Dollars in thousands)                                       1999               1998                       1999               1998

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

Period-End Balances:
On-balance sheet consumer loans                                                                     $ 9,520,735         $ 4,987,023
Securitized consumer loans                                                                            8,835,433           6,791,163
                                                                                                    -----------         -----------
    Total managed consumer loan portfolio                                                           $18,356,168         $11,778,186
                                                                                                    ===========         ===========

Average Balances:
On-balance sheet consumer loans                           $ 8,994,243         $ 4,793,697           $ 7,697,174         $ 4,393,731
Securitized consumer loans                                  8,268,226           6,791,077             7,773,717           6,737,492
                                                         ------------         -----------           -----------         -----------
    Total average managed consumer loan portfolio         $17,262,469         $11,584,774           $15,470,891         $11,131,223
                                                         ============         ===========           ===========         ===========

Operating Data and Ratios:
Reported:
        Average earning assets                            $10,094,134         $ 5,317,068           $ 8,758,022         $ 4,930,255
        Return on average assets                                 5.62%               5.74%                 5.57%               4.89%
        Net interest margin (1)                                 12.75%              11.82%                12.26%              11.13%
Managed:
        Average earning assets                            $18,362,360         $12,108,145           $16,531,739         $11,667,747
        Return on average assets                                 3.20%               2.63%                 3.06%               2.13%
        Net interest margin (1)                                 12.15%              11.82%                12.01%              11.07%

(1) Net interest margin is equal to net interest income divided by average
    earning assets.
</TABLE>


Financial Statement Impact

     Securitizations  are treated as sales under GAAP. As a result,  securitized
loans are removed from the balance sheet in exchange for cash proceeds and other
consideration.  In certain  cases,  the  Company  has  retained  a  subordinated
interest  in the pool of assets  included in a  securitization,  with a right to
receive  its  allocated  share of  collections  after  payment  to  third  party
investors.  Such retained  interests are recorded at fair value and are included
in "Due from securitization" on the Company s statement of financial condition.

     The Company,  at the time it enters into a  securitization,  recognizes  an
"interest-only strip receivable" asset, available for sale, equal to the present
value of the projected excess servicing income related to the securitized loans.
During the revolving  period of a  securitization,  an additional  interest-only
strip  receivable  is  recognized  each month,  as  additional  receivables  are
transferred to investors in respect of their share of principal  collections and
losses on previously securitized loans.

     The Company  services the accounts  underlying  the  securitized  loans and
earns a monthly  servicing fee, which is generally offset by the servicing costs
incurred by the Company. Accordingly,  servicing assets have not been recognized
in connection  with the Company's  securitizations.  The finance  charge and fee
revenue  generated  by the  securitized  loans in  excess  of  interest  paid to
investors,  related credit losses,  servicing fees, credit enhancement costs and
other transaction  expenses is referred to as "excess servicing income." Revenue
resulting  from  excess  servicing  income is  recognized  each month first as a
reduction of the  interest-only  strip  receivable  and then,  to the extent the
amount  received  exceeds  the  related  component  of the  interest  only strip
receivable   (which  was  recorded  at  present   value),   as   servicing   and
securitizations income.

     The effect of this  accounting  treatment is to reduce net interest  income
and the provision for credit losses, and to increase non-interest income, on the
Company's statement of income. For the three months ended September 30, 1999 and
1998 this  accounting  treatment had the effect of: reducing net interest income
by $236.2 million and $200.9  million;  reducing the provision for credit losses
by $145.7  million and $110.6  million;  and increasing  non-interest  income by
$90.5 million and $90.3  million.  For the nine months ended  September 30, 1999
and 1998,  this  accounting  treatment had the effect of:  reducing net interest
income by $683.5 million and $557.0  million;  reducing the provision for credit
losses by $455.2 million and $357.8 million; and increasing  non-interest income
by $228.3 million and $199.2  million.  Because credit losses on the securitized
loans are  reflected  as a reduction  in servicing  and  securitizations  income
rather than a reduction  of reserves for credit  losses,  the Compan s provision
for  credit  losses  is lower  than  would be the case had such  loans  not been
securitized.

     When loans are  securitized,  the  Company  retains a  "seller's  interest"
generally  equal to the  total  amount  of the pool of  assets  included  in the
securitization less the investors' portion of those assets. As the amount of the
loans in the securitized  pool fluctuates due to customer  payments,  purchases,
cash advances and credit losses,  the amount of the seller's interest will vary.
The seller's  interest is  classified  on the  Company's  statement of financial
condition as loans  receivable at par less the  associated  allowance for credit
losses.  Periodically,  the Company may elect to transfer  new loan  receivables
into a  securitized  pool in order to maintain  the seller's  interest  above an
agreed-upon minimum balance.

Risk Adjusted Revenue and Return

     One measure of product profitability that incorporates revenue and the most
significant  costs  inherent in  consumer  loan risk  analysis is risk  adjusted
revenue,  which is net interest  income plus fee income less net credit  losses.
The  Company  uses  risk  adjusted  revenue  as  a  measure  of  loan  portfolio
profitability, consistent with its goal of matching the revenue base of customer
accounts with the risk  undertaken.  Risk adjusted revenue may also be expressed
as a percentage of average  consumer  loans,  in which case it is referred to as
risk adjusted return.

     Managed  risk  adjusted  revenue  and  return  for the three  months  ended
September  30, 1999 were $819  million and 18.99%,  compared to $390 million and
13.46% for the three months ended  September 30, 1998. For the nine months ended
September  30, 1999 risk adjusted  revenue and return were $2,090.6  million and
18.02%,  compared  to  $993.6  million  and  11.90%  for the nine  months  ended
September 30, 1998. The increase during the third quarter of 1999 is a result of
increased yields on portfolios priced according to customer risk,  declining use
of  introductory  rates on new  accounts  and strong  growth in fee  revenue per
customer.

     The  components  of risk  adjusted  revenue are discussed in more detail in
subsequent  sections of this  Management's  Discussion and Analysis of Financial
Condition and Results of Operations.

Net Interest Income and Margin

     Net interest income is interest earned from loan and investment  portfolios
less interest  expense on deposits and  borrowings.  Managed net interest income
includes  interest earned from on-balance sheet and securitized  portfolios less
interest  expense on deposits and  borrowings  and the coupon  interest  paid to
securitization investors.

     Managed net interest  income for the three months ended  September 30, 1999
was $557.8  million,  compared to $357.9 million for the same period in 1998, an
increase  of $199.9  million  or 56%.  Managed  net  interest  margin on average
managed loans increased to 12.40% for the three months ended September 30, 1999,
from 12.01% for the same period in 1998. For the nine months ended September 30,
1999,  managed net  interest  income was  $1,488.9  million,  compared to $968.6
million  for the same  period in 1998,  an  increase  of $520.3  million or 54%.
Managed net interest margin on average managed loans increased to 12.35% for the
nine months ended  September 30, 1999,  from 11.54% for the same period in 1998.
The increase in managed net interest  income and margin  reflects an increase in
average managed loans, which increased  approximately $5.7 billion for the three
months ended  September 30 1999,  combined  with higher  finance  charge  yields
related to an  increase  in the number of  accounts  for lower line  credit card
products,  which generate  higher  overall  finance charge rates and fee income,
consistent with the Company's risk adjusted approach to pricing.

Statement of Average Balances, Income and Expense, Yields and Rates

     The  following  table  provides an analysis  of interest  income,  interest
expense, net interest spread, and average balances for the three and nine months
ended September 30, 1999 and 1998.  Interest income and interest expense margins
are  presented  as  a  percentage  of  average  earning  assets,  which  include
interest-earning  consumer loan  portfolios and  investments  held for liquidity
purposes.

<TABLE>
<CAPTION>
                                                                 Three Months Ended September 30
                                      -------------------------------------------------------------------------------------
                                                          1999                                        1998
                                      -------------------------------------------------------------------------------------
                                        Average         Income/       Yield/       Average           Income/         Yield/
(Dollars in thousands)                  Balance         Expense        Rate        Balance           Expense          Rate
                                      -----------      ---------      -------     -----------      ---------        -------
<S>                                   <C>              <C>            <C>         <C>              <C>              <C>
ASSETS:
Interest-Earning assets
      Consumer loans                  $ 8,994,243      $424,597       18.88%      $4,793,697       $210,565         17.57%
      Interest-earning cash               118,129         1,447        4.90%          46,718            572          4.90%
      Federal funds sold                  567,164         7,154        5.05%         181,538          2,573          5.67%
      Investment securities               414,598         6,050        5.84%         295,115          4,516          6.12%
                                      -----------      --------       ------      ----------       --------         ------
Total interest-earning assets          10,094,134      $439,248       17.41%       5,317,068       $218,226         16.42%

Allowance for loan losses                (738,282)                                  (376,307)
Other assets                            1,373,961                                    814,641
                                       ----------                                 ----------
Total assets                          $10,729,813                                 $5,755,402
                                      ===========                                 ==========
<PAGE>

LIABILITIES AND EQUITY:
Interest-bearing liabilities
      Deposits                        $ 6,473,313      $ 89,073        5.50%      $3,683,045       $ 51,153          5.56%
      Borrowings                        1,920,960        28,546        5.94%         646,355          9,997          6.19%
                                      -----------      --------       ------      ----------       --------          -----
Total interest-bearing liabilities      8,394,273      $117,619        5.60%       4,329,400       $ 61,150          5.65%

Other liabilities                       1,076,182                                    544,063
                                      -----------                                 ----------
Total liabilities                       9,470,455                                  4,873,463

Capital securities                        160,000                                    160,000

Equity                                  1,099,358                                    721,939
                                      -----------                                 ----------
Total liabilities and equity          $10,729,813                                 $5,755,402
                                      ===========                                 ==========

NET INTEREST SPREAD:                                                  11.81%                                        10.77%
                                                                      ======                                        ======

Interest income to
      average interest-earning assets                                 17.41%                                        16.42%
Interest expense to
      average interest-earning assets                                  4.66%                                         4.60%
                                                                      ------                                        ------
Net interest margin                                                   12.75%                                        11.82%
                                                                      ======                                        ======
</TABLE>

<TABLE>
<CAPTION>
                                                              Nine Months Ended September 30
                                        ------------------------------------------------------------------------------------------
                                                       1999                                               1998
                                        ------------------------------------------------------------------------------------------ -

                                          Average         Income/          Yield/           Average         Income/         Yield/
(Dollars in thousands)                    Balance         Expense           Rate            Balance         Expense         Rate
                                        ----------       ----------        ------        ----------        --------         ------
<S>                                     <C>              <C>               <C>           <C>               <C>              <C>
ASSETS:
Interest-Earning assets
      Consumer loans                    $7,697,174       $1,062,171        18.40%        $4,393,731        $565,848         17.17%
      Interest-earning cash                124,272            4,421         4.74%            38,463           1,514          5.25%
      Federal funds sold                   540,251           19,777         4.88%           204,344           8,536          5.57%
      Investment securities                396,325           17,424         5.86%           293,717          13,125          5.96%
                                        ----------       ----------        ------        ----------        --------         ------
Total interest-earning assets            8,758,022       $1,103,793        16.80%         4,930,255        $589,023         15.93%

Allowance for loan losses                 (622,901)                                        (301,279)
Other assets                             1,229,452                                          870,359
                                        ----------                                       ----------
Total assets                            $9,364,573                                       $5,499,335
                                        ==========                                       ==========


LIABILITIES AND EQUITY:
Interest-bearing liabilities
      Deposits                          $5,666,742       $  227,302         5.35%        $3,566,480        $146,276          5.47%
      Borrowings                         1,611,164           71,088         5.88%           686,961          31,161          6.05%
                                        ----------       ----------         -----        ----------        --------          -----
Total interest-bearing liabilities       7,277,906       $  298,390         5.47%         4,253,441        $177,437          5.56%

Other liabilities                          944,750                                          416,807
                                        ----------                                       ----------
Total liabilities                        8,222,656                                        4,670,248

Capital securities                         160,000                                          160,000

Equity                                     981,917                                          669,087
                                        ----------                                       ----------
Total liabilities and equity            $9,364,573                                       $5,499,335
                                        ==========                                       ==========


NET INTEREST SPREAD:                                                       11.33%                                           10.37%
                                                                           ======                                           ======


Interest income to
      average interest-earning assets                                      16.80%                                           15.93%
Interest expense to
      average interest-earning assets                                       4.54%                                            4.80%
                                                                           ------                                           ------
Net interest margin                                                        12.26%                                           11.13%
                                                                           ======                                           ======
</TABLE>

Interest Volume and Rate Variance Analysis

     Net  interest  income is affected by changes in the average  interest  rate
earned  on  interest-earning  assets  and  the  average  interest  rate  paid on
interest-bearing liabilities. Net interest income is also affected by changes in
the volume of  interest-earning  assets and  interest-bearing  liabilities.  The
following  table sets  forth the dollar  amount of the  increase  (decrease)  in
interest  income and interest  expense  resulting from changes in the volume and
rates:

<TABLE>
<CAPTION>
                                            Three Months Ended September 30                 Nine Months Ended September 30
                                                     1999 vs. 1998                                  1999 vs. 1998
                                     ----------------------------------------------------------------------------------------------

                                                         Change due to (1)                                  Change due to (1)
                                        Increase      -----------------------             Increase        --------------------------
(Dollars in thousands)                 (Decrease)       Volume         Rate              (Decrease)          Volume          Rate
                                      ----------      ---------      --------            ----------        ---------       --------
<S>                                   <C>             <C>            <C>                 <C>                <C>             <C>
Interest Income:
Consumer loans                        $214,032        $197,249       $16,783             $496,323          $453,147         $43,176
Federal funds sold                       4,581           4,892          (311)              11,241            12,420          (1,179)
Other securities                         2,409           2,625          (216)               7,206             7,590            (384)
                                      --------        --------       -------             --------          --------         -------
    Total interest income              221,022         204,766        16,256              514,770           473,157          41,613

Interest Expense:
Deposits                                37,920          38,476          (556)              81,026            84,305          (3,279)
Borrowings                              18,549          18,968          (419)              39,927            40,826            (899)
                                      --------        --------        ------             --------          --------         -------
    Total interest expense              56,469          57,444          (975)             120,953           125,131          (4,178)
                                      --------        --------       -------             --------          --------         -------
    Net interest income               $164,553        $147,322       $17,231             $393,817          $348,026         $45,791
                                      ========        ========       =======             ========          ========         =======

(1) The changes due to both volume and rates have been  allocated in  proportion
to the  relationship  of the absolute  dollar amounts of the change in each. The
changes in interest  income and expense are  calculated  independently  for each
line in the schedule.

</TABLE>


Non-Interest Income

     Non-interest  income  consists  primarily of servicing  and  securitization
income and credit product fee income. Total non-interest income increased 82.2%,
or $293.8 million, to $651.1 million for the third quarter of 1999 over the same
period in 1998. This increase is  attributable  to increased  credit product fee
income  realized  from  membership  services  revenue  and  to  increased  late,
overlimit,  annual  membership and  processing  fees resulting from an increased
customer base.

Servicing and Securitization Income

     As of September 30, 1999, securitizations outstanding provided $8.6 billion
in  funding,  representing  45% of total  managed  funding,  compared  with $6.8
billion,  or 55%, as of  September  30, 1998.  The  decrease in  securitizations
outstanding  as a percentage of total  managed  funding as of September 30, 1999
was due to the Company's  efforts to diversify its funding  sources and increase
deposit  funding.  A more detailed  discussion  of the Company's  securitization
activities is set forth under "--Funding and Liquidity."

     Because excess servicing income on securitized loans essentially represents
a  recharacterization  of net interest income and credit product fee income less
the provision for loan losses and servicing  expense,  excess  servicing  income
will vary based upon the same factors.  Thus,  changes in net credit losses (see
"--Asset  Quality,  Net Credit  Losses")  and changes in interest  rates (to the
extent that the  receivables  and interest  payable to investors  are based upon
floating   rates)   will   cause   excess   servicing   income   to  vary   (see
"--Asset/Liability Risk Management").

     Servicing and securitization  income totaled $157.8 million for the quarter
ended  September  30, 1999 as compared to $156.3  million for the quarter  ended
September 30, 1998. For the nine months ended September 30, 1999,  servicing and
securitization income was $437.8 million compared to $427.1 million for the same
period in 1998.  Excess  servicing  yields on securitized  loans remained stable
with  increasing  finance  charge  revenue and fees being offset by increases in
credit losses related to the securitization of acquired portfolios. The increase
in excess  servicing  revenue  was offset by a  reduction  in  interest  earning
securitization  principal funding accounts  maintained in the prior year to fund
the repayment of securitizations that matured in September 1998.

Credit Product Fee Income

     For the three months ended September 30, 1999 and 1998,  credit product fee
income  increased to $484.2  million  from $199.2  million,  reflecting  account
growth, loan receivable growth and increased sales of membership  services.  Fee
revenue  realized from  securitized  loans is not included in credit product fee
income but is instead recorded as part of servicing and  securitization  income.
While the Company anticipates continued significant growth in credit product fee
income during 1999,  there can be no assurance  that the historic rate of growth
reflected  in the  Company's  third  quarter  1999 and in previous  periods will
continue.

     Credit product fee income includes activity fees, loan performance fees and
membership services revenue. Strong growth in new customers, membership services
revenue and  activity  fees  contributed  to an  increase in credit  product fee
income over the second quarter of 1999. Activity fees, which include interchange
income and cash advance,  annual membership and processing fees,  totaled $217.0
million and $87.7  million for the three  months  ended  September  30, 1999 and
1998.  For the nine  months  ended  September  30, 1999 and 1998  activity  fees
totaled  $569.0  million and $228.3  million.  Activity  fees have  increased as
account  growth  resulted  in  increased  annual  membership,  cash  advance and
purchase  activity fees. Loan performance fees include late,  returned check and
overlimit  charges.  For the three months ended September 30, 1999 and 1998 loan
performance  fees totaled $101.9 million and $65.4 million,  reflecting  account
growth.  For the nine months ended September 30, 1999 and 1998 loan  performance
fees totaled $284.7 million and $109.8  million,  reflecting  account growth and
increases in late fee rates.  Membership  services revenue results from the sale
of Credit Protection, Home Protection,  Providian Health Advantage,  Destination
Unlimited  (formerly  DrivePro),  Providian  BuySmart  (formerly  PricePro)  and
Providian  Personal  Registry (1) products.  The Company  recognizes  membership
services  revenue ratably over the term of the product,  net of an allowance for
estimated refunds,  beginning after the end of the free or money-back  guarantee
period,  if any.  For the  three  months  ended  September  30,  1999 and  1998,
membership services revenue totaled $165.2 million and $46.1 million, reflecting
increased  penetration  rates for sales of membership  products and increases in
the customer  base of the  Company's  lower line credit card product  offerings,
which generate higher levels of membership services revenue. For the nine months
ended  September 30, 1999 and 1998  membership  services  revenue totaled $387.1
million and $78.4 million.

Non-Interest Expense

     Non-interest  expense includes loan  solicitation  costs, such as printing,
postage,  telemarketing,  list  processing and credit bureau costs paid to third
parties in connection with direct marketing  account  solicitation  efforts.  In
accordance  with  GAAP,  the  Company  has  capitalized  only the  direct  costs
associated  with  successful  account  acquisition  efforts,   after  offsetting
up-front processing fees.  Capitalized loan origination costs are amortized over
the privilege period (currently one year) for credit card loans or the estimated
life of the loans for home equity  lines of credit  loans,  unless the loans are
securitized,  in which  case the  costs  are  taken as an  expense  prior to the
securitization. The majority of loan origination costs are expensed as incurred.
For the three months ended September 30, 1999 and 1998, loan  origination  costs
were $116.0 million and $53.3 million,  reflecting increased direct mail volumes
and other  marketing  initiatives.  In the three months ended September 30, 1999
and 1998,  the Company  amortized  loan  origination  costs of $14.6 million and
$15.0 million.  For the nine months ended  September 30, 1999 and 1998,  overall
loan  origination  costs were $317.7 million and $141.5 million while  amortized
loan origination costs were $41.2 million and $34.8 million.

     Non-interest  expense also includes  salary and benefit  expenses,  such as
staffing costs associated with marketing,  customer  service,  collections,  and
administration.  Other non-interest expense includes third-party data processing
and communication  costs,  occupancy expenses,  and other operational  expenses,
such as collection costs,  fraud losses, and bankcard  association  assessments.
The following table presents  non-interest expense for the three and nine months
ended September 30, 1999 and 1998:
<TABLE>
<CAPTION>

                                                 Three months Ended September 30           Nine months Ended September 30

(Dollars in thousands)                               1999                  1998              1999                 1998
                                                 ------------           ---------        -----------          ------------
<S>                                              <C>                    <C>              <C>                  <C>
Non-interest expense:
Salaries and employee benefits                   $    132,579           $  64,965        $   350,350          $    185,610
Solicitation                                          115,972              53,258            317,650               141,533
Occupancy, furniture and equipment                     23,745              12,963             57,926                35,317
Data processing and communication                      33,593              16,005             88,207                53,839
Other                                                 127,299              63,315            314,001               165,185
                                                 ------------           ---------        -----------          ------------
       Total                                     $    433,188           $ 210,506        $ 1,128,134          $    581,484
                                                 ============           =========        ===========          ============

</TABLE>

(1)  Home  Protection,  Providian  Health  Advantage,  DrivePro and PricePro are
     registered  service marks of Providian  Financial.  Destination  Unlimited,
     Providian  BuySmart and  Providian  Personal  Registry are service marks of
     Providian Financial for which federal registration is pending.

<PAGE>

Impact of Year 2000

     Many  computer  programs  use two digits,  rather than four,  to refer to a
year.  Unless  these  programs are  corrected,  they will be unable to interpret
dates beyond the year 1999, which could cause a system failure or other computer
errors.  The  Company,  like all  financial  services  institutions,  is heavily
dependent on computer  systems for its  operations.  The Company  processes data
through its own  information  technology  systems and the systems of third party
vendors and providers. In addition,  various non-information  technology systems
are affected by the Year 2000 issue,  including elevators,  security systems and
life safety systems.

     To  address  this  problem,  and in  accordance  with Year  2000  readiness
guidelines  established by the Office of the Comptroller of the Currency and the
Federal  Deposit  Insurance  Corporation,  which regulate the Company's  banking
subsidiaries,  the Company  initiated a Year 2000 project in November  1996. The
Company's Year 2000 project consists of five phases: (1) planning,  in which the
Year 2000 project team defined the approach to  addressing  the Year 2000 issue;
(2) inventory,  in which the Company's vendors,  hardware,  internally developed
systems and third party-provided  software were inventoried and critical systems
and critical vendors identified; (3) assessment, in which Year 2000 readiness of
the Company's systems was assessed; (4) modification,  in which affected systems
were replaced,  repaired,  upgraded,  or retired;  and (5) testing for Year 2000
compliance.

     The Company is currently in conformity  with its banking  regulators'  Year
2000 requirements.  All five phases of the Company's Year 2000 project have been
completed,  including  remediation of internally  developed systems,  repair and
replacement of third  party-provided  hardware and software,  and infrastructure
upgrades.  Testing of internally  developed  critical systems was  substantially
completed in December 1998, while testing by the Company of third party-provided
critical  systems  was  substantially  completed  in March 1999.  The  Company's
testing of all systems was  completed in July 1999,  with testing of  internally
developed critical systems and third party-provided  critical systems continuing
as enhancements  are made to the compliant code.  During the remaining months of
1999, the Company's Year 2000 project will focus on reviewing  controls in place
to ensure  that  systems  that are  currently  Year 2000 ready  remain so and on
liquidity and cash management planning, as well as validating  contingency plans
and business  resumption  and  disaster  recovery  plans.  Such  monitoring  and
validation  are expected to continue  through the end of 1999 into the first few
months of 2000.

     The Company  depends on  technology  and other  services  provided by third
parties,   including  technology  vendors,  credit  providers,   and  processing
providers and on financial  systems  (such as payment and clearing  systems) and
the   utility    infrastructure    (such   as   power,    transportation,    and
telecommunications).  The Company  relies on these  third  parties to assess the
impact of the Year 2000 issue on the technology and services they provide and to
take  any  necessary  corrective  action.  Substantially  all of  the  Company's
critical vendors have represented to the Company that their systems and products
are Year 2000 compliant.

     Year 2000 issues could result in  significant  disruption  to the Company's
operations (including loan origination and servicing), its ability to obtain and
provide funds, and its financial and accounting systems.  Such disruptions could
result in revenue loss and  increased  costs that could have a material  adverse
effect  on  the  Company's  financial   condition,   liquidity  and  results  of
operations. There can be no assurance that remediation efforts of the Company or
of  third  party  vendors  and  suppliers  have  addressed  all  risks  of  such
disruption.  Disruptions that could result from the Company's failure to correct
its critical systems or the failure of third parties on which the Company relies
to  correct  their  systems  have  been  addressed  in the  Company's  Year 2000
contingency plans and business resumption and disaster recovery plans. There can
be no assurance,  however,  that such contingency plans will fully mitigate Year
2000 failures or problems.

     The   Company's   total  Year  2000  project   costs  are  expected  to  be
approximately $13.5 million,  and the Company has incurred $11.6 million in Year
2000 project  expenses  through  September 30, 1999. The Company expects to fund
all Year  2000-related  costs through operating cash flows. Year 2000 costs will
be expensed as incurred,  and the Company believes that such costs will not have
a material impact on the Company's future financial results or condition.

     The foregoing Year 2000 discussion  contains  "forward-looking  statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements,  including  statements regarding the expected costs of the Company's
Year 2000  project,  are based on  estimates,  and  actual  results  may  differ
materially from those anticipated.  Specific factors that might cause results to
differ from those anticipated  include, but are not limited to, the availability
of  qualified  personnel,  success in  identifying  and  modifying  all relevant
computer  systems,  the sufficiency  and outcome of Year 2000 testing,  adequate
resolution of Year 2000 issues by  governmental  agencies,  businesses and other
third  party  providers  to  the  Company,   and   unanticipated   costs.   Such
"forward-looking  statements" speak only as of the date on which such statements
are made, and the Company undertakes no obligation to update any forward-looking
statement.

Income Taxes

     The  Company  recognized  income tax  expense of $100.4  million  and $53.1
million for the three months ended  September  30, 1999 and 1998.  The Company's
effective tax rate increased to 39.96% for the three months ended  September 30,
1999 from 39.14% for the same period in 1998.

Asset Quality

     The  Company's  delinquencies  and net credit losses  reflect,  among other
factors, the quality of loans, the average age of the Company's loan receivables
(generally referred to as "seasoning"),  the success of the Company's collection
efforts, and general economic conditions. The quality of loans is subject to the
targeting and underwriting  criteria used, account  management,  seasoning,  and
demographic and other factors.

     The level of credit  losses  directly  affects  earnings  when reserves are
established  through  recognition  of provisions  for credit  losses,  which are
generally dependent on historical levels of credit losses and current trends. As
new  portfolios of consumer loans are  originated or acquired,  management  uses
historical credit loss and delinquency  analyses of similar,  more seasoned loan
portfolios and other qualitative factors to establish reserves for future credit
losses (see "--Allowance and Provision for Credit Losses"). As net credit losses
are experienced, the previously established reserve is used to absorb the credit
losses.

     The  Company's  policy  is to  recognize  principal  credit  losses  on all
unsecured loans (including the unsecured portion of any partially secured credit
card loans) which become  delinquent no more than 180 days after the delinquency
occurs,  unless the accountholder  cures the default by making a partial payment
that qualifies under the Company's  standards.  Accounts of bankrupt credit card
customers are charged off upon notification of bankruptcy.  Accounts of deceased
credit card customers are charged off upon  determination  of  uncollectibility.
Home loans are reviewed when a loss of all or part of the  principal  balance of
the loan is  anticipated,  and an allowance for credit losses is  established in
the  amount  by which  the book  value of the loan  exceeds  the  estimated  net
realizable value of the underlying collateral.  Anticipated losses on home loans
are  charged  off no later than 180 days  after  payments  on such loans  become
delinquent. At the time a loan is charged off, accrued but unpaid finance charge
and fee income is reversed  against  current  earnings but is  maintained on the
customer's record in the event of a future recovery. Once a loan is charged off,
the Company's policy is to continue to pursue collection of principal, interest,
and  accrued fee  income,  to the extent  legally  permissible.  Any  subsequent
collections on previously charged-off loans will be recognized as recoveries.

Delinquencies

     The  following  table  presents  the  delinquency  trends of the  Company's
on-balance  sheet and managed  consumer loan  portfolio as of September 30, 1999
and 1998. An account is  contractually  delinquent if the minimum payment is not
received by the next billing  date.  Total  delinquencies  on managed loans were
5.2% as of  September  30, 1999,  compared to 5.3% as of September  30, 1998 and
4.7% as of June 30, 1999. The decrease in  delinquencies  over the third quarter
of 1998 reflects  improving trends in the Company's gold,  platinum and acquired
portfolios offset by seasoning in its low line product  portfolio.  The increase
in  delinquencies  from the second quarter of 1999 reflects the seasoning of the
Company's lower line asset classes.

<TABLE>
<CAPTION>
                                                          September 30
                                -------------------------------------------------------------------------
                                               1999                           1998
                                -------------------------------------------------------------------------
                                                       % of                          % of
                                                       Total                         Total
(Dollars in thousands)                Loans            Loans           Loans         Loans
                                  ------------         -------       ---------      -------
<S>                               <C>                  <C>           <C>            <C>
Reported:
Loans outstanding                 $ 9,520,735          100.00%       $ 4,987,023    100.00%
Loans delinquent:
     30 - 59 days                 $   186,547            1.96%       $    96,409      1.93%
     60 - 89 days                     133,714            1.40%            62,062      1.24%
     90 or more days                  257,821            2.71%           126,523      2.54%
                                  -----------          -------        ----------    -------
     Total                        $   578,082            6.07%       $   284,994      5.71%
                                  ===========          =======       ===========    =======
Managed:
Loans outstanding                 $18,356,168          100.00%       $11,778,186    100.00%
Loans delinquent:
     30 - 59 days                 $   319,267            1.74%       $   219,754      1.87%
     60 - 89 days                     219,201            1.19%           139,127      1.18%
     90 or more days                  415,887            2.27%           260,889      2.21%
                                  -----------          -------       -----------    -------
     Total                        $   954,355            5.20%       $   619,770      5.26%
                                  ===========          =======       ===========    =======

</TABLE>

Net Credit Losses

     Net credit losses for consumer loans include the principal amount of losses
from  customers  unwilling  or  unable  to  pay  their  existing  loan  balances
(including  charged-off  bankrupt and deceased customer accounts),  less current
period  recoveries.  Principal  amounts  include cash advances,  purchases,  and
certain financed  membership services revenue and exclude accrued finance charge
and other fee income, which is charged against the related income at the time of
credit loss  recognition.  Losses for cardholder  accounts related to fraudulent
activity are included in other non-interest expense.

     The  annualized  managed  net credit loss rate  decreased  to 6.40% for the
third quarter of 1999, compared to 7.77% for the same period in 1998, reflecting
an improved credit loss rate on acquired portfolios. The managed net credit loss
rates for the first  nine  months of 1999 and 1998  were  7.01% and  7.38%.  The
seasoning of the Company's lower line asset classes noted previously is expected
to result in a reversal of the favorable loan loss trend the Company has enjoyed
during the first three  quarters of 1999,  with the managed net credit loss rate
expected  to rise back to the 7% range  during the fourth  quarter of 1999.  The
Company's  pricing for finance  charge and fee income  incorporates  an expected
higher credit loss rate when appropriate,  consistent with the Company's efforts
to generate income using a risk adjusted return approach.

     The  following  table  presents the  Company's net credit losses and credit
loss rates for consumer loans for the periods indicated and is presented both on
a financial  statement  reporting basis and a managed portfolio basis:
<TABLE>
<CAPTION>
                                                      Three Months Ended                          Nine Months Ended
                                                         September 30                               September 30
                                            ------------------------------------------------------------------------------
(Dollars in thousands)                            1999                   1998                1999                 1998
                                            -----------------         -----------         ------------        ------------
<S>                                              <C>                 <C>                  <C>
Reported:
Average loans outstanding                        $ 8,994,243         $ 4,793,697          $ 7,697,174         $ 4,393,731
Net credit losses                                $   130,720         $   114,429          $   358,346         $   258,418
Net credit losses as a percentage
   of average loans outstanding                         5.81%               9.55%                6.21%               7.84%

Managed:
Average loans outstanding                        $17,262,469         $11,584,774          $15,470,891         $11,131,223
Net credit losses                                $   276,398         $   225,089          $   813,593         $   616,303
Net credit losses as a percentage
   of average loans outstanding                         6.40%               7.77%                7.01%               7.38%

</TABLE>


Allowance and Provision for Credit Losses

     The Company  maintains the allowance for credit losses at a level  believed
to be adequate to absorb future credit losses,  net of  recoveries,  inherent in
the existing  on-balance  sheet  portfolio.  The  allowance for credit losses is
maintained  for  on-balance  sheet  loans  only (see  "--Managed  Consumer  Loan
Portfolio and the Impact of Securitization").  The entire allowance is allocated
to designated portfolios or pools of the Company's on-balance sheet loans.

     The  following  table sets forth the activity in the  allowance  for credit
losses for the periods indicated.


<TABLE>
<CAPTION>

                                                                         Three Months Ended                       Nine Months Ended
                                                                            September 30                            September 30
                                                              ----------------------------------------------------------------------
(Dollars in thousands)                                            1999               1998              1999                 1998
                                                              -------------       ----------        ------------         -----------
<S>                                                           <C>                 <C>               <C>                  <C>
Balance at beginning of period                                $  675,224          $ 355,789         $  451,245           $  145,312
Provision for credit  losses                                     288,279            168,217            725,574              343,724
Reserve acquired                                                    -                  (500)            14,310              178,459
Credit Losses                                                   (148,995)          (123,962)          (414,783)            (279,877)
Recoveries                                                        18,275              9,533             56,437               21,459
                                                              -----------         ---------         ----------           ----------
Net credit losses                                               (130,720)          (114,429)          (358,346)            (258,418)
                                                              -----------         ---------         ----------           ----------

Balance at end of period                                      $  832,783          $ 409,077        $   832,783           $  409,077
                                                              ===========         =========        ===========           ==========
Allowance for credit losses to loans at period-end                                                        8.75%                8.20%
</TABLE>

The  allowance  for  credit  losses  increased  to $832.8  million,  or 8.75% of
on-balance sheet loans, as of September 30, 1999, from $451.2 million,  or 7.86%
of  on-balance  sheet  loans,  as of  December  31,  1998.  The  increase in the
allowance for credit losses as a percentage of on-balance  sheet loans  reflects
an increase in loans under lower line credit card products,  which are generally
expected to experience higher credit loss rates (see " -Risk Adjusted Return and
Revenue").

Funding and Liquidity

     The Company funds its assets through a diversified mix of funding  products
designed to appeal to a broad range of investors.  It is the goal of the Company
to generate funding at the lowest cost possible consistent with ensuring prudent
liquidity and interest rate risk management.

     The primary goal of liquidity  management  at the Company is to ensure that
funding will be  available to support  Company  operations  in varying  business
environments.  The  Company  employs  multiple  strategies  to maintain a strong
liquidity   position:   diversification   of  funding  sources;   dispersion  of
maturities;  maintenance of committed  credit  facilities;  and maintenance of a
prudent investment portfolio and cash balances.

     The  Company's  approach  to  funding  its  assets  is to seek  diversified
distribution channels for a variety of products. Products offered include retail
and institutional  deposits,  money market accounts,  term federal funds, public
and private asset securitizations and bank notes.  Distribution channels include
direct phone and mail,  brokerage and investment  banking  relationships and the
Internet.

     The Company offers a wide range of maturity terms for its funding  products
(from one week to thirty years). Actual maturity distributions depend on several
factors,  including  expected asset duration,  investor demand,  relative costs,
shape of the yield curve,  and anticipated  issuance in the  securitization  and
capital markets. Maturities are managed by the types of funding sources employed
and by the rates offered on different products.  The Company strives to maintain
a balanced  distribution of maturities,  avoiding undue concentration in any one
period.  The  Company  monitors  existing  funding  maturities  and loan  growth
projections to ensure that prudent amounts of backup  liquidity are available to
support the maturities, if necessary.

     The following table summarizes the contractual  maturity of deposits at the
Company as of September 30, 1999 and 1998.
<TABLE>
<CAPTION>
                                                       September 30, 1999                            September 30, 1998
                                            ----------------------------------------------------------------------------------------
                                              Direct         Other          Total           Direct         Other           Total
(Dollars in thousands)                       Deposits       Deposits      Deposits         Deposits       Deposits         Deposits
                                            ----------      ----------    ----------       ---------      ----------     ----------
<S>                                         <C>             <C>           <C>              <C>            <C>            <C>
Three months or less                        $  516,926      $  253,515    $  770,441       $  301,995     $  186,922     $  488,917
Over three months through 12 months          1,719,604         747,968     2,467,572          849,989        315,254      1,165,243
Over one year through five years             1,228,503       1,714,056     2,942,559          678,503        610,865      1,289,368
Over five years                                 -              130,000       130,000             -              -              -
Deposits without contractual maturity          989,342          53,647     1,042,989          912,176         71,017        983,193
                                            ----------      ----------    ----------       ----------     ----------     ----------

     Total Deposits                         $4,454,375      $2,899,186    $7,353,561       $2,742,663     $1,184,058     $3,926,721
                                            ==========      ==========    ==========       ==========     ==========     ==========
</TABLE>


     Deposits  increased  to $7.4  billion as of  September  30,  1999 from $4.7
billion as of December 31, 1998.  This increase is attributable to the Company's
continuing  strategy to maintain a large deposit  funding base and strong demand
for FDIC-insured deposits.

     During the first  nine  months of 1999,  the  Company,  through  one of its
banking  subsidiaries,   issued  $630  million  senior  bank  notes,  increasing
long-term  borrowings to a total of  approximately  $1.0 billion as of September
30, 1999 from $400 million as of December 31, 1998.  The  following  table shows
the Company's  unsecured  funding  availability and outstandings as of September
30, 1999.
<TABLE>
<CAPTION>

                                                                            September 30, 1999
                                                            -------------------------------------------------------------
                                                            Effective/                         Outstanding,       Final
(Dollars or dollar equivalents in thousands)                Issue Date    Availability (1)        Net            Maturity
                                                            ----------    ---------------    -------------       --------
<S>                                                         <C>            <C>               <C>                 <C>
Senior and subordinated Bank Note program (2)(4)                2/98       $  4,000,000      $  1,029,360            2/13
Short-term credit facilities (four 364 day facilities)(3)    Various            290,300            16,200         Various
Long-term credit facility                                       1/99          1,000,000             --               1/03
Providian Financial shelf registration                          6/98          2,000,000             --               --
Capital Securities                                              2/97            160,000           160,000            2/27
</TABLE>


(1)  Short-term Bank Notes issued under the Bank Note program and Short-term and
     Long-term  credit  facilities  are  revolving   funding  sources.   Funding
     availability is subject to market conditions.

(2)  Includes  availability  to issue up to $500  million of  subordinated  bank
     notes,  none  outstanding as of September 30, 1999.

(3)  Includes sterling facility, using exchange rate as of September 30, 1999.

(4)  Bank Notes currently  outstanding  under the Bank Note program
     are Medium-term senior Bank Notes.

     On April 26, 1999, the Company entered into a revolving  credit facility to
finance the Company's expansion into the United Kingdom. The UK revolving credit
facility,  in the amount of(pound)25  million ($40.3 million equivalent based on
the exchange rate at closing) has an expiration date of April 25, 2000. On April
27, 1999,  the Company  borrowed(pound)10  million  ($16.2  million)  under this
facility.

     The Company's securitizations are diversified across the public and private
securitization  markets and across  maturity  terms.  The primary  objectives of
securitization  are to diversify  funding sources and to obtain efficient all-in
cost of funds,  including the cost of capital.  The securitized loans are pooled
to provide cash flow for  securities  sold to investors  using legal  structures
that generally  provide for an interest only (revolving)  period and a principal
repayment  (amortization  or  accumulation)  period.  Under  the  terms  of  the
securitizations,   once  the  amortization  or  accumulation  period  commences,
payments on the securitized  loans are distributed or accumulated for payment to
the securitization  investors and the Company's  on-balance sheet portion of the
securitized pool of assets will increase.

     For  diversification  and flexibility,  in addition to publicly issued term
securities, the Company uses commercial paper-based conduit facilities and other
variable funding programs to securitize loan receivables. The conduit facilities
and  variable  funding  programs  are  generally  renewable  annually.  Balances
securitized under conduit and variable funding  facilities  totaled $2.9 billion
as of September 30, 1999.

     During  the first  nine  months of 1999,  the  Company  completed  two term
securitizations  totaling  approximately  $1.1 billion and one variable  funding
program in the amount of $1.0 billion.

     The  Company's  term  securitizations  are  expected to  amortize  over the
periods indicated below, based on currently outstanding  securitized loans as of
September 30, 1999:

                                                                   Amount
                                                               Amortizing
Year                                                (Dollars in millions)
----                                                 --------------------
1999                                                           $      214
2000                                                                  951
2001                                                                1,133
2002                                                                1,384
2003                                                                1,360
2004                                                                  549


     The Company believes that it can attract deposits,  borrow funds from other
sources, and issue additional  asset-backed securities to replace securitization
funding  based  on the  amortization  schedule  summarized  above,  although  no
assurances can be given to that effect.

Capital Adequacy

     Each of the Company's  banking  subsidiaries is subject to capital adequacy
guidelines as defined by its primary  federal  regulator.  Core capital (Tier 1)
consists  principally of  shareholder's  equity less goodwill.  Total risk-based
capital  (Tier 1 + Tier 2) includes a portion of the  reserve for credit  losses
and other capital  components.  Based on these  classifications of capital,  the
capital  adequacy  regulations  establish three capital adequacy ratios that are
used to  measure  whether  a  financial  institution  is "well  capitalized"  or
"adequately capitalized":
<TABLE>
<CAPTION>

                                                                             Well               Adequately
                                                                          Capitalized          Capitalized
  Capital Ratio                 Calculation                                 Ratios                Ratios
----------------        -----------------------------------------         -----------          -----------
<S>                     <C>                                                 <C>                <C>
Total Risk-Based        (Tier 1 + Tier 2)/Total Risk-Based Assets           => 10%             => 8% < 10%
Tier 1                  Tier 1/Total Risk-Based Assets                       => 6%             => 4% < 6%
Leverage                Tier 1/Adjusted average assets                       => 5%             => 4% < 5%

</TABLE>

         At September 30, 1999, each of the Company's  banking  subsidiaries was
"well  capitalized"  in all regulatory  capital ratio  categories,  as set forth
below:

 <TABLE>
<CAPTION>
                                                                      Providian
                                                                        National     Providian
Capital Ratio                                                              Bank       Bank
-----------------                                                     ----------     --------
<S>                                                                   <C>            <C>
Total Risk-Based                                                      10.07%          19.47%
Tier 1                                                                 8.73%          18.16%
Leverage                                                              10.81%          15.95%
</TABLE>

     In accordance with the banking  regulators'  risk-based  capital standards,
the amount of risk-based  capital that must be maintained for assets transferred
with  recourse  will not  exceed  the  maximum  amount of  recourse  for which a
regulated  entity is  contractually  liable under the recourse  agreement.  This
rule,  known as the low level recourse rule,  applies to transactions  accounted
for as sales under  generally  accepted  accounting  principles  in which a bank
contractually limits its risk of loss or recourse exposure to less than the full
effective minimum risk-based capital requirement for the assets transferred. Low
level  recourse  transactions  arise  when a bank  securitizes  assets  and uses
contractual  cash flows  (such as  interest-only  strip  receivables  and spread
accounts),   retained  subordinated   interests,   or  other  assets  as  credit
enhancements. The Company's banking subsidiaries are required to hold risk-based
capital  equivalent to the maximum recourse exposure on the assets  transferred,
on a net of-tax basis, not to exceed the amount of risk-based capital that would
be required if the low level recourse rule did not apply.

Asset/Liability Risk Management

     The  business  of the  Company and the  composition  of its  balance  sheet
consist  primarily of investments in  interest-earning  assets (loans receivable
and  investment  securities)  which are  primarily  funded  by  interest-bearing
liabilities  (deposits and borrowings).  As a result, the Company's earnings are
subject to risk  resulting  from interest rate  fluctuations  to the extent that
there is a  difference  between  the amount of  interest-earning  assets and the
amount of interest-bearing  liabilities that mature, reprice, or prepay/withdraw
in a specific period.

     The  Company's   receivables  generally  yield  either  a  variable  Annual
Percentage  Rate  ("APR"),  indexed  to the  prime  rate,  or a fixed  APR.  The
Company's fixed APR credit card receivables have no stated maturity or repricing
period.  However,  the Company's  credit card receivables may be repriced by the
Company upon  providing  the required  prior  notice to the  customer,  which is
generally no more than 30 days. The interest rates on the Company's  liabilities
are  generally  indexed  to LIBOR and bear a fixed rate  until  maturity.  These
characteristics of the Company's  receivables and liabilities expose the Company
to two types of interest  rate risk:  (a)  repricing  risk,  which  results from
differences  between  the timing of rate  changes  and the timing of cash flows,
which could impact net interest  income if  liabilities  reprice more often than
assets,  and (b) basis risk,  which  arises  from  changing  rate  relationships
between yield curves and markets, which could impact net interest income derived
from  variable APR  receivables  if the spread  between the prime rate and LIBOR
compresses or expands.

     The principal  objective of the Company's  asset/liability  risk management
activities is to monitor and control the Company's  exposure to adverse  effects
resulting from  movements of interest rates over time. The Company  measures and
manages  interest rate risk  individually  for each banking  subsidiary and on a
consolidated  basis,  including  both  on-  and  off-balance  sheet  assets  and
liabilities in its measurement and management.  To measure  exposure to interest
rate  fluctuation,  the Company  uses net  interest  income  ("NII")  simulation
analysis and the market value of portfolio equity ("MVPE") method as its primary
quantitative tools.

     The following table presents the estimated effects of positive and negative
parallel  shifts in interest rates as calculated at September 30, 1999 and takes
into  consideration the Company's  current hedging activity:
<TABLE>
<CAPTION>

                                                                     September 30, 1999(1)
                                                                   -------------------------
Change in Interest Rates                                             Percentage Change In
(In Basis Points)                                                  -------------------------
                                                                   NII (2)          MVPE (3)
                                                                   -------          --------
<S>                                                                <C>              <C>
+200                                                               (1.6)%           (8.6)%
Flat                                                                  0%               0%
-200                                                                2.1%            10.5%
</TABLE>

(1)  The   information   shown  is   presented   on  a   consolidated,   managed
     asset/liability   basis,  giving  effect  to  securitizations  and  related
     funding.

(2)  The  percentage  change in this  column  represents  NII for 12 months in a
     stable  interest  rate  environment  versus the NII in the  specified  rate
     scenarios.

(3)  The  percentage  change  in this  column  represents  the  MVPE in a stable
     interest rate environment  versus the MVPE in the specified rate scenarios.
     MVPE is  defined  as the  present  value of  expected  net cash  flows from
     existing  assets,  minus the present  value of expected net cash flows from
     existing  liabilities,  plus the present  value of expected  net cash flows
     from existing off-balance sheet transactions.


     As part of its interest  rate risk  measurement  process,  the Company must
make reasonable  estimates about how its customers and competitors  will respond
to changes in market  interest  rates.  In  addition,  the  repricing of certain
categories  of assets  and  liabilities  is  subject  to  competitive  and other
pressures  beyond  the  Company's  control.  As a  result,  certain  assets  and
liabilities  assumed to mature or otherwise  reprice within a certain period may
in  fact  mature  or  reprice  at  different  times  and at  different  volumes.
Therefore, the table above should be viewed as the Company's best estimate as to
the  general  effect of broad  and  sustained  interest  rate  movements  on the
Company's net income.

     The Company seeks to mitigate earnings volatility  associated with interest
rate movements by generally  matching the repricing  characteristics  of on- and
off-balance sheet assets and liabilities.  Fixed rate liabilities generally fund
fixed APR assets,  while variable rate  liabilities  generally fund variable APR
assets. Given the Company-directed  repricing characteristics of its credit card
assets and historically  favorable funding rates for variable  liabilities,  the
Company  uses  variable  rate  liabilities  to fund a portion  of its fixed rate
credit card assets.

     The Company uses derivative financial instruments,  including interest rate
swap and cap  agreements,  with  indices  that  correlate  to managed  assets or
liabilities,  to modify its indicated net interest  sensitivity to levels deemed
appropriate based on the Company's risk tolerance.  The objective in using these
hedges is to reduce  interest  rate risk by more closely  aligning the repricing
characteristics of the Company's assets and liabilities.

     All hedging  transactions are  over-the-counter  interest rate swap and cap
transactions  executed with highly rated United States and  international  banks
which hedge identified interest rate risks both for accounting and tax purposes.
The Company does not trade in  derivatives  or use  derivatives  to speculate on
interest  rates or as an investment  vehicle.  The following  table presents the
notional  amounts of interest  rate swap and cap  agreements  purchased  for the
periods indicated:

<TABLE>
<CAPTION>
                                                        Three Months Ended                Nine Months Ended
                                                          September 30                      September 30
                                            ------------------------------------------------------------------------
(Dollars in thousands)                            1999                 1998            1999              1998
                                            ------------------------------------------------------------------------
<S>                                           <C>                  <C>             <C>                 <C>
Interest rate swap agreements:
         Beginning Balance                    $ 635,500            $ 135,500       $ 635,500           $ 955,500
         Additions                              115,000              500,000         130,000             666,667
         Maturities                              10,000                 -             25,000             986,667
                                              ---------            ---------       ---------           ---------

         Ending Balance                       $ 740,500            $ 635,500       $ 740,500           $ 635,500
                                               ========            =========       =========           =========

Interest rate caps and floors:
         Beginning Balance                    $ 647,709            $ 691,970       $ 670,960           $ 922,220
         Additions                               96,750              172,481         159,000             504,981
         Maturities                              98,161              191,720         183,662             754,470
                                              ---------            ---------       ---------           ---------

         Ending Balance                       $ 646,298            $ 672,731       $ 646,298           $ 672,731
                                              =========            =========       =========           =========
</TABLE>

     Notional  amounts of interest  rate swaps  outstanding  have  increased  to
better match the changing mix of the Company's assets and liabilities. As market
conditions or the Company's asset/liability mix change, the Company may increase
or decrease the notional amount of swaps and caps outstanding in order to manage
the Company's interest rate risk profile.

     The  Company  manages  credit risk  arising  from  derivative  transactions
through an ongoing credit review,  approval,  and  monitoring  process.  "Credit
risk" for these derivative  transactions is defined as the risk that a loss will
occur as the result of a derivative  counterparty  defaulting on a contract when
the contract is in a favorable economic position to the Company. The Company may
enter into master netting,  market settlement,  or collateralization  agreements
with  swap  counterparties  to  reduce  the  exposure  to  credit  risk with the
individual  counterparty.  The Company  establishes  credit risk limits for each
counterparty  based on total  net  credit  exposure  to such  counterparty.  The
Company  monitors  exposure  to  counterparty  credit risk  through  sensitivity
testing.  Probable worst-case  scenarios are considered to determine the maximum
credit risk exposure for derivatives associated with a particular  counterparty.
If counterparty credit risk is determined to exceed the  pre-established  limit,
then action is taken to limit the Company's exposure with that counterparty.

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.

     Beginning  in May 1999,  the  Company  was the  subject  of media  coverage
concerning   complaints  made  by  some  customers  of  the  Company's   banking
subsidiaries  regarding certain sales and collections  practices.  Following the
initial media coverage,  the San Francisco  District  Attorney's Office began an
investigation into the Company's sales and collections practices,  including the
marketing of certain fee-based products and the posting of customer payments. On
November 5, 1999 the Company  received an inquiry from the Connecticut  Attorney
General's  Office seeking  information in connection with a civil  investigation
into the  Company's  credit card  issuance and billing  practices.  The remedies
available to the San Francisco  District  Attorney's  Office and the Connecticut
Attorney General's Office include,  but are not limited to, damages,  penalties,
fines and/or injunctive relief.

     Since May 1999,  a number of lawsuits  have been filed  against the Company
and, in some cases, against certain of the Company's subsidiaries by current and
former customers of the Company's banking subsidiaries.  A consolidated putative
class action lawsuit (In re Providian Credit Card Litigation) (the "Consolidated
Action") was filed on August 3, 1999 in California  state court in San Francisco
against the Company, Providian National Bank and certain other subsidiaries, and
seeks unspecified  damages,  including actual and punitive  damages,  attorney's
fees and injunctive  relief. The complaint alleges unfair and deceptive business
practices,  including  failure  to  credit  payments  in a timely  fashion  that
resulted in the  imposition of fees,  adding  products and charging fees without
customer  authorization,  changing  rates and  terms  without  proper  notice or
authorization,  and  misleading  or  deceptive  sales  practices.  A few similar
actions  filed  in  other  California  counties  have  been  transferred  to San
Francisco County and coordinated with the Consolidated Action.

     As of November 12, 1999,  four similar  putative class actions were pending
in state  courts and seven were  pending in federal  courts.  One state case was
recently filed in San Francisco  Superior Court,  and will likely be coordinated
with the Consolidated Action.  Another state case was filed in San Mateo County,
California; this case was not coordinated with the Consolidated Action, and will
proceed  separately.  In addition,  one putative  class action was filed in Cook
County,  Illinois.  The  Company's  motion to dismiss  this action was  granted,
although  the  plaintiff  has until  November  15, 1999 to amend the  complaint.
Another  action was filed in Bullock  County,  Alabama.  The remaining  putative
class  actions  were filed in various  federal  district  courts,  and have been
transferred  by the Federal  Judicial Panel on  Multidistrict  Litigation to the
Eastern District of Pennsylvania.

     These  other  state and  federal  actions  contain  substantially  the same
allegations as those alleged in the Consolidated Action;  certain of the actions
also  allege  one or more of the  following:  that the  account  agreement  with
customers  contained  unconscionable or improper terms and fees, that statements
sent to customers  failed to include Credit  Protection and other add-on fees in
the  calculation of the annual  percentage  rate  disclosed in such  agreements,
refusal to honor  cancellation  requests,  improper obtaining of credit reports,
breached  promises  to raise  credit  limits,  breached  promises of high credit
limits,  and  unlawful  tying of  Credit  Protection  to  credit  card and other
products.

     A putative class action (In re Providian Securities Litigation), which is a
consolidation  of complaints  filed in the United States  District Court for the
Eastern District of New York in June 1999, alleges, in general, that the Company
and certain of its officers made false and misleading  statements concerning the
Company's  future  prospects and  financial  results in violation of the federal
securities  laws.  The  putative  class,  which is alleged to have  acquired the
Company's stock between  January 15, 1999 and May 26, 1999,  seeks damages in an
unspecified  amount,  in addition to pre-judgment  and  post-judgment  interest,
costs and attorneys  fees. As of November 12, 1999, the  consolidated  complaint
had not been filed.

     The  Company  continues  to  cooperate  and have  discussions  with the San
Francisco  District  Attorney's  Office but there can be no  certainty as to the
outcome  of those  discussions.  The  Company  also has met with and  intends to
cooperate with the Connecticut Attorney General's Office. The lawsuits described
above are at a very  early  stage.  No  specific  measure  of  damages  has been
demanded and, in most cases,  a response is not yet due. An informed  assessment
of the ultimate outcome or potential liability  associated with these matters is
not feasible at this time. Due to the uncertainties of litigation,  there can be
no  assurance  that the Company  will prevail on all the claims made against it.
However,  management  believes  that the Company has  substantive  defenses  and
intends to defend the actions vigorously.

     In addition,  the Company is commonly  subject to various other pending and
threatened  legal  actions  arising  from the  conduct  of its  normal  business
activities. In the opinion of the Company, any liability that is likely to arise
with respect to these additional actions will not have a material adverse effect
on the consolidated financial condition or results of operations of the Company.


Item 6.  Exhibits and Reports on Form 8-K.

(a)  Exhibits Required by Item 601 of Regulation S-K.

     Exhibit 10.1    Series  1999-1  Supplement,  dated as of June 1, 1999,
                     to the Pooling and Servicing  Agreement, dated as of
                     June 1, 1993, as amended,  between Providian National Bank,
                     as Seller and  Servicer, and Bankers  Trust  Company,
                     as  Trustee (incorporated  by  reference  to  Exhibit  4.1
                     to  the Providian  Master Trust's report on Form 8-K
                     filed on November 3, 1999).

     Exhibit 10.2    Series 1999-2 Supplement, dated as of October 1, 1999.
                     to the Pooling and Servicing Agreement, dated as of
                     June 1, 1993, as amended, between Providian National Bank,
                     as Seller and Servicer, and Bankers Trust Company, as
                     Trustee (incorporated by reference to Exhibit 4.1 to the
                     Providian Master Trust's report on Form 8-K filed on
                     November 3, 1999).

     Exhibit 12.1    Computation of Earnings to Fixed Charges and Ratio of
                     Earnings to Combined Fixed Charges and Preferred Stock
                     Dividend Requirements.

     Exhibit 27.1    Financial Data Schedule

(b)  Reports on Form 8-K.

     The  Company  filed a report  on Form 8-K on  November  1,  1999  with
     respect to its Medium Term Note Program.

(e)  Ratio of  Earnings  to Fixed  Charges  and Ratio of  Earnings to
     Combined  Fixed Charges and Preferred Stock Dividend Requirements.

<TABLE>
<CAPTION>

                                                    Nine Months
                                                      Ended
                                                   September 30,                  Year Ended December 31


(Dollars in thousands)                               1999             1998       1997        1996        1995        1994
                                                     ----             ----       ----        ----        ----        ----

<S>
EARNINGS TO FIXED CHARGES:                           <C>              <C>        <C>         <C>         <C>         <C>
        Excluding interest on deposits               9.26             10.88      14.20       5.93        4.90        5.17
        Including interest on deposits               3.13              2.93       2.66       2.34        2.34        2.69

EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK: (1)
        Excluding interest on deposits               9.26             10.88      13.28       5.19        4.32        4.40
        Including interest on deposits               3.13              2.93       2.63       2.25        2.24        2.51

(1)  Preferred stock dividend requirements are adjusted to represent a pretax
     earnings equivalent.
</TABLE>

                                   SIGNATURES

     Pursuant to the  requirements  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.


                                            Providian Financial Corporation
                                            -------------------------------
                                                  (Registrant)


Date: November 15, 1999                     /s/ David J. Petrini
                                                --------------------------
                                                David J. Petrini
                                                Executive Vice President and
                                                Chief Financial Officer
                                                (Principal Financial Officer
                                                and Duly Authorized Signatory)

Date: November 15, 1999                     /s/ Daniel Sanford
                                                ---------------------------
                                                Daniel Sanford
                                                Senior Vice President and
                                                Controller (Chief Accounting
                                                Officer and Duly Authorized
                                                Signatory)
<PAGE>

                                                        EXHIBIT INDEX


Exhibit No.

Exhibit 10.1     Series 1999-1 Supplement, dated as of June 1, 1999,
                 to the Pooling and Servicing Agreement, dated as of June 1,
                 1993, as amended, between Providian National Bank, as Seller
                 and Servicer, and Bankers Trust Company, as Trustee
                 (incorporated by reference to Exhibit 4.1 to the Providian
                 Master Trust's report on Form 8-K filed on November 3, 1999).

Exhibit 10.2     Series 1999-2 Supplement, dated as of October 1, 1999, to the
                 Pooling and Servicing Agreement, dated as of June 1, 1993, as
                 amended, between Providian National Bank, as Seller and
                 Servicer, and Bankers Trust Company, as Trustee (incorporated
                 by reference to Exhibit 4.1 to the Providian Master Trust's
                 report on Form 8-K filed on November 3, 1999).

Exhibit 12.1     Computation of Earnings to Fixed Charges and Ratio of Earnings
                 to Combined Fixed Charges and Preferred Stock Dividend
                 Requirements.


Exhibit 27.1      Financial Data Schedule