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


                                    FORM 10-Q

(MarkOne)

[X]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the quarterly period ended March 31, 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 April 30, 1999,  there were  142,268,355  shares of the  registrant's
Common Stock, par value $0.01 per share, outstanding.



<PAGE>



                         PROVIDIAN FINANCIAL CORPORATION
                                    FORM 10-Q

                                      INDEX

                                 March 31, 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........................10

PART II.  OTHER INFORMATION

          Item 1. Legal Proceedings...........................................27

          Item 5. Other Information...........................................27

          Item 6. Exhibits and Reports on Form 8-K............................27

Signatures....................................................................28


<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements.

<TABLE>

Condensed Consolidated Statements of Financial Condition (Unaudited)
Providian Financial Corporation and Subsidiaries
(Dollars in thousands)
<CAPTION>
                                                         March 31      December 31
                                                           1999           1998
                                                         --------      -----------
<S>                                                      <C>           <C>                                                        
Assets:
Cash and cash equivalents                                $  123,331    $   176,348
Federal funds sold                                          600,794        297,869
Investment securities:
  Available-for-sale                                        156,337        114,858
  Held -to-maturity                                         183,400        318,817
Loans receivable, less allowance for credit losses
  of $547,655 at March 31, 1999 and $451,245
  at December 31, 1998                                    6,295,947      5,282,014
Premises and equipment, net                                  91,473         82,858
Interest receivable                                          61,234         51,801
Due from securitizations                                    456,579        454,374
Deferred taxes                                              370,849        306,234
Other assets                                                187,030        146,042
                                                        -----------    ------------
        Total assets                                    $ 8,526,974    $ 7,231,215
                                                        ===========    ============

Liabilities:
Deposits:
   Non-interest bearing                                    $ 34,236       $ 48,220
   Interest bearing                                       5,181,093      4,624,078
                                                        -----------    ------------
                                                          5,215,329      4,672,298

Short-term borrowings                                       455,000        472,500
Long-term borrowings                                        949,259        399,757
Deferred fees                                               394,248        334,617
Accrued expenses and other liabilities                      428,620        388,856
                                                        -----------    ------------
        Total liabilities                                 7,442,456      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: 400,000,000 shares; issued and
  outstanding: March 31, 1999 - 141,914,876 shares;
  December 31, 1998 - 141,732,008 shares)                       954            954
Additional paid-in capital                                        -              -
Retained earnings                                           976,441        866,005
Net unrealized loss on available-for-sale securities           (161)          (320)
Common stock held in treasury - at cost:
   (March 31, 1999 - 1,205,104 shares;
   December 31, 1998 - 1,405,972 shares)                    (52,716)       (63,452)
                                                        ------------   ------------
        Total shareholders' equity                          924,518        803,187
                                                        ------------   -----------
        Total liabilities and shareholders' equity      $ 8,526,974    $ 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>

(Dollars in thousands, except per share data)                Three Months Ended
                                                                  March 31
                                                            --------------------
                                                              1999        1998
                                                            --------    --------
<S>                                                        <C>           <C>
Interest income:
   Loans                                                   $ 279,125     $ 170,070
   Investment securities                                      12,491         6,507
                                                        ------------   -----------
   Total interest income                                     291,616       176,577

Interest expense:
   Deposits                                                   64,439        46,153
   Borrowings                                                 16,062         8,603
                                                        ------------   -----------
   Total interest expense                                     80,501        54,756

          Net interest income                                211,115       121,821

Provision for credit losses                                  182,073        57,656
                                                        ------------   -----------

          Net interest income after provision
          for credit losses                                   29,042         64,165

Non-interest income:
   Servicing and securitizations                             131,211       114,116
   Credit product fee income                                 341,810        96,408
   Other                                                       4,235           179
                                                        ------------   -----------
                                                             477,256       210,703
Non-interest expense:
   Salaries and employee benefits                             95,987        59,734
   Solicitation                                               99,447        41,612
   Occupancy, furniture and equipment                         15,304        11,266
   Data processing and communication                          24,762        15,754
   Other                                                      81,606        53,687
                                                        -------------  -----------
                                                             317,106       182,053
                                                        -------------  -----------

          Income before income taxes                         189,192        92,815

Income tax expense                                            75,646        36,707
                                                        -------------  -----------

          Net Income                                       $ 113,546      $ 56,108
                                                        =============  ===========

Earnings per share - basic                                    $ 0.80        $ 0.39
                                                        =============  ===========
Earnings per share - assuming dilution                        $ 0.78        $ 0.39
                                                        =============  ===========

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

Weighted average common shares outstanding - basic (000)     141,247       142,262
                                                        =============  ===========
Weighted average shares and assumed conversions (000)        145,502       144,771
                                                        =============  ===========

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>
(Dollars in thousands, except per share data
                                                                              Cumulative     Common
                                                     Additional                 Other         stock
                                           Common     Paid-In    Retained     Comprehensive  Held in
                                            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
Net Income                                                         56,108                                 56,108
Cash dividend:
    Common - $0.03 per share                                       (4,763)                                (4,763)
Purchase of 205,800 common
      shares for treasury                                                                     (7,654)     (7,654)
Exercise of stock options                              (1,623)       (257)                      2,692         812
Issuance of restricted and
      unrestricted stock less
      forfeited shares                                  1,401                                  3,384       4,785
Deferred compensation related to
      grant of restricted and unrestricted
      stock less amortization of $837                  (3,948)                                            (3,948)
Net tax effect from exercise of stock options
    and issuance of restricted stock                      (47)                                               (47)
                                           -------   ----------  --------     ------------- ---------    --------
Balance at March 31, 1998                  $ 954     $      -    $650,944     $       -     $(11,491)    $640,407
                                           =======   ==========  ========     ============= =========    ========

Balance at December 31, 1998               $ 954     $      -    $866,005     $    (320)    $(63,452)     803,187
Comprehensive income:
    Net Income                                                    113,546                                 113,546
      Other comprehensive income,
      net of income tax:
        Unrealized gain on securities
        net of income taxes of ($94)                                                159                       159
                                                                              -------------              --------
Comprehensive income                                                                                      113,705
Cash dividend:
    Common - $0.05 per share                                       (7,089)                                 (7,089)
Purchase of 275,496 common
      shares for treasury                              19,348                                (27,617)      (8,269)
Exercise of stock options and other awards            (26,230)      3,979                     29,858        7,607
Issuance of restricted and unrestricted
      stock less forfeited shares                        (404)                                 8,495        8,091
Deferred compensation related to
      grant of restricted and unrestricted
      stock less amortization of $2,164                (5,925)                                             (5,925)
Net tax effect from exercise of stock options
    and issuance of restricted stock                   13,211                                              13,211
                                          --------   ----------  --------     ------------- ---------    --------
Balance at March 31, 1999                  $ 954     $      -    $976,441     $    (161)    $(52,716)    $924,518
                                          ========   ==========  ========     ============= =========    ========

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


<PAGE>

<TABLE>

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

<CAPTION>
(Dollars in thousands)                                                           Three Months Ended
                                                                                      March 31
                                                                               -----------------------
                                                                                 1999         1998
                                                                               ----------   ----------
<S>                                                                            <C>           <C>
Operating Activities:
    Net Income                                                                 $ 113,546     $ 56,108
    Adjustments to reconcile net income to net cash provided by operating
    activities:
     Provision for credit losses                                                 182,073       57,656
     Depreciation and amortization of premises and equipment                       7,418        4,131
     Amortization of net loan acquisition costs                                   11,201        9,776
     Amortization of deferred compensation
       related to restricted and unrestricted stock                                2,164          837
     Amortization of deferred fees                                              (118,405)     (25,247)
     Increase in deferred income tax benefit                                     (64,709)     (12,544)
     Increase in deferred fees                                                   178,036       58,694
     Increase in interest receivable                                              (9,433)      (5,221)
     Net increase in other assets                                                (52,156)     (21,040)
     Net increase in accrued expenses and other liabilities                       52,977       56,356
                                                                               ----------   ----------
                     Net Cash Provided by Operating Activities                   302,712      179,506

Investing Activities:
     Net decrease (increase) in money market instrument investments              119,867      (99,937)
     Net cash used for loan originations and principal
       collections on loans receivable                                        (1,048,735)    (133,779)
     Net (decrease) increase in securitized loans                                (20,187)     769,870
     Portfolio acquisitions                                                     (127,119)    (948,462)
     Increase in due from securitizations                                         (2,205)      (4,373)
     Purchases of investment securities                                          (71,046)         (24)
     Proceeds from maturities of  investment securities                           45,372            -
     Increase in federal funds sold                                             (302,925)    (204,930)
     Net purchases of premises and equipment                                     (16,033)      (8,195)
                                                                               ----------    ----------
                     Net Cash Used by Investing Activities                    (1,423,011)     (629,830)

Financing Activities:
     Net increase in deposits                                                    543,031       175,492
     Proceeds from issuance of term federal funds                                430,000       250,000
     Repayment of term federal funds                                            (447,500)     (180,000)
     Decrease in notes payable to banks                                                -        (8,000)
     Increase in long-term borrowings                                            549,502       199,852
     Purchase of treasury stock                                                   (8,269)       (7,654)
     Dividends paid                                                               (7,089)       (4,763)
     Proceeds from exercise of stock options                                       7,607           208
                                                                               ----------     ----------
                     Net Cash Provided (Used) by Financing Activities          1,067,282       425,135
                                                                               ----------     ----------

Net Decrease in Cash and Cash Equivalents                                        (53,017)      (25,189)
Cash and cash equivalents at beginning of period                                 176,348       112,522
                                                                              -----------     ----------
Cash and cash equivalents at end of period                                     $ 123,331      $ 87,333
                                                                              ===========     ==========

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


<PAGE>


PROVIDIAN FINANCIAL CORPORATION
Notes to Condensed Consolidated Financial Statements
March 31, 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  fee-based  products.  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 months ended
March 31, 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.

                                                     Three Months Ended March 31
(In thousands, except per share data)                  1999               1998
--------------------------------------------------------------------------------
Income available to common stockholders             $ 113,546          $  56,108
                                                   =============================

     Weighted average shares outstanding--basic       141,247            142,262
     Effect of dilutive securities
      Restricted stock issued--non vested                 518                502
      Employee stock options                            3,737              2,007
                                                   ----------         ----------
     Dilutive potential common shares                   4,255              2,509
                                                   -----------------------------
     Adjusted weighted average shares and
      assumed conversions                             145,502            144,771
                                                   =============================
     Earnings per share--basic                      $    0.80          $    0.39
                                                   =============================

     Earnings per share--assuming dilution          $    0.78          $    0.39
                                                   =============================



<PAGE>


Note 3 - Allowance for Credit Losses
     The activity in the  allowance for credit losses for the three months ended
March 31, 1999 and 1998 was as follows (in thousands):

                                                     Three Months Ended March 31
                                                       1999                1998
     ---------------------------------------------------------------------------
     Balance at beginning of period                 $ 451,245         $ 145,312
     Provision for credit losses                      182,073            57,656
     Reserve acquired                                  14,310           105,367
     Charge-offs                                     (115,506)          (64,420)
     Recoveries                                        15,533             5,525
                                                   ----------         ----------
     Net charge-offs                                  (99,973)          (58,895)
                                                   -----------------------------
     Balance at end of period                       $ 547,655         $ 249,440
                                                   =============================

Note 4 - Senior and Subordinated Bank Notes
     During the first  three  months of 1999,  the  Company,  through one of its
banking  subsidiaries,  issued an  additional  $550 million of senior bank notes
through a program  that was  established  in 1998.  The total notes  outstanding
under this program as of March 31, 1999 was $949.3 million.

Note 5 - Shareholders' Equity
     The  Company is party to an  agreement  to  purchase,  on a forward  basis,
shares of its common  stock.  At the  Company's  election,  the agreement 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 higher 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 pay an agreed upon
premium  amount.  As of March 31, 1999, the agreement  covered 374,180 shares of
the  Company's  common  stock at a  forward  price of  $110.00  per  share.  The
agreement  expires in July 1999, but may be settled earlier.  During the quarter
ended March 31, 1999,  settlements from this forward purchase agreement resulted
in the Company  receiving  193,052 shares of its common stock and paying premium
amounts of $583,000  which were recorded as  adjustments  to additional  paid in
capital.

Note 6 - 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 mail 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.  Fee-based  product  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 three months ended March 31, 1999 and 1998:

                                Credit         Home
(Dollars in thousands)            Card         Loan        Other           Total
--------------------------------------------------------------------------------
     March 31, 1999
      Revenue                $   986,882      40,034       2,796     $ 1,029,712
      Profit or loss         $   231,092      (4,232)    (22,943)    $   203,917
      Assets                 $13,143,110   1,197,705       5,943     $14,346,758

     March 31, 1998
      Revenue                $   563,692      33,648           -     $   597,340
      Profit or loss         $   108,168       3,383           -     $   111,551
      Assets                 $ 9,587,729   1,067,907           -     $10,655,636


     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 three months ended March 31, 1999 and 1998:

                                                                  March 31
(Dollars in thousands)                                     1999             1998
--------------------------------------------------------------------------------
     Total segment profits                             $ 203,917      $ 111,551
     Corporate and other                                 (14,725)       (18,736)
                                                      --------------------------
          Income before income taxes                   $ 189,192      $  92,815
                                                      ==========================


Note 7 - 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.


<PAGE>


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 fee-based products.  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,  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."  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 March 31, 1999 was $113.5 million, an
increase  of 102% over net income of $56.1  million for the three  months  ended
March 31, 1998. This increase was primarily  attributable to continued growth in
loans  outstanding  and strong growth in fee revenue.  In addition,  the Company
continued  to  strengthen  net  interest  margins  while  relying  less  on  low
introductory  rates to attract  customers.  As of March 31, 1999, managed loans,
which include on-balance sheet and securitized loans, increased by $3.7 billion,
or 35%, over March 31, 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  ("core  accounts").  The Company
continues to evaluate acquisitions on an opportunistic basis as competitors exit
the credit card  market.  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 12.26% in
the first  quarter of 1999 from 11.09% 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 first three  months of 1999  increased  to
7.62% from 6.78% for the same period in 1998,  reflecting  account seasoning and
higher credit loss rates on acquired portfolios. Core account credit quality and
delinquency  trends were generally stable during the first quarter of 1999, with
the managed  net credit  loss rate,  excluding  acquired  portfolios,  remaining
virtually  unchanged at 6.58%  compared to 6.54% for the fourth quarter of 1998.
Non-interest income represented 49% of managed revenue in the first three months
of 1999,  up from 36% for the same period in 1998.  The dollar  contribution  to
managed  revenue  from  non-interest  income for the first three  months of 1999
increased more than 150% compared to the same period in 1998 to $416.2  million,
due to increased sales of fee-based  products and increased  revenue from credit
card fees,  including  annual  membership,  processing,  cash advance,  late and
overlimit  fees.  The  Company  reinvested  a portion of the  increased  managed
revenue to strengthen  loan loss  reserves,  increase  marketing  investment and
build  infrastructure,  such as expanding the employee base and product  support
systems.  Non-interest  expense  increased  $135 million  during the first three
months of 1999 to $317.1 million,  due to the 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
5.78% for the first three months 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 first quarter of
1999  with  improved  profitability,  combined  with a  high  level  of  capital
retention, and was able to increase its return on equity to 52.19% for the first
three months of 1999 from 36.14% 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 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:

<TABLE>
<CAPTION>

                                                                        Three Months Ended
                                                                             March 31
                                                              --------------------------------------
(Dollars in thousands)                                              1999                 1998
                                                              -----------------    -----------------
<S>                                                           <C>                  <C>
Period-End Balances:
On-balance sheet consumer loans                                    $ 6,857,160          $ 3,769,622
Securitized consumer loans                                           7,483,655            6,886,014
                                                              -----------------    -----------------
    Total managed consumer loan portfolio                         $ 14,340,815         $ 10,655,636
                                                              =================    =================

Average Balances:
On-balance sheet consumer loans                                    $ 6,283,115          $ 3,980,578
Securitized consumer loans                                           7,502,226            6,558,094
                                                              -----------------    -----------------
    Total average managed consumer loan portfolio                 $ 13,785,341         $ 10,538,672
                                                              =================    =================

Operating Data and Ratios:
Reported:
       Average earning assets                                      $ 7,232,188          $ 4,437,060
       Return on average assets                                          5.78%                4.35%
       Net interest margin (1)                                          11.68%               10.98%
Managed:
       Average earning assets                                     $ 14,734,414         $ 10,995,154
       Return on average assets                                          2.98%                1.84%
       Net interest margin (1)                                          11.81%               10.55%

(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,  the
securitized  loans are  removed  from the  balance  sheet in  exchange  for cash
proceeds and other consideration.

     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 March 31, 1999 and
1998 this  accounting  treatment had the effect of: reducing net interest income
by $223.8 million and $168.2  million;  reducing the provision for credit losses
by $162.8  million and $119.6  million;  and increasing  non-interest  income by
$61.0 million and $48.6 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 Company'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  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 March
31, 1999 were $576.0  million and 16.72%,  compared to $276.0 million and 10.46%
for the three months ended March 31, 1998. The increase during the first quarter
of 1999 is a result of increased yields on portfolios priced to address customer
risk, declining use of introductory rates on new accounts and higher fee revenue
per customer.  The increase was  partially  offset by an increase in managed net
credit  losses,  which were 7.62% for the three  months  ended  March 31,  1999,
compared to 6.78% for the same period in the previous  year,  reflecting  higher
credit loss rates on acquired portfolios.

     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 portfolios less interest
expense on deposits and borrowings used to fund the loans.

     Managed net  interest  income for the three months ended March 31, 1999 was
$434.9  million,  compared to $290.1  million  for the same  period in 1998,  an
increase  of $144.8  million  or 50%.  Managed  net  interest  margin on average
managed  loans  increased  to 12.26% for the three  months ended March 31, 1999,
from 11.09% 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  $3.2 billion,  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 months ended
March 31,  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 March 31
                                     ---------------------------------------------------------------------------------------
                                                         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                  $     6,283,115   $    279,125     17.77%   $    3,980,578   $    170,070       17.09%
     Interest-earning cash                    95,724          1,175      4.91%           40,963            556        5.43%
     Federal funds sold                      479,005          5,655      4.72%          211,429          2,904        5.49%
     Investment securities                   374,344          5,661      6.05%          204,090          3,047        5.97%
                                     ----------------  ------------   ---------  --------------   -------------  -----------
Total interest-earning assets              7,232,188   $    291,616     16.13%        4,437,060   $    176,577       15.92%

Allowance for loan losses                   (506,711)                                  (227,560)
Other assets                               1,128,962                                    948,937
                                     ----------------                            ---------------
Total assets                         $     7,854,439                             $    5,158,437
                                     ================                            ===============


LIABILITIES AND EQUITY:
Interest-bearing liabilities
     Deposits                        $     4,928,978   $     64,439      5.23%   $    3,425,203   $     46,153        5.39%
     Borrowings                            1,061,815         16,062      6.05%          587,279          8,603        5.86%
                                     ---------------- --------------  ---------  ---------------  -------------  -----------
Total interest-bearing liabilities         5,990,793   $     80,501      5.37%        4,012,482   $     54,756        5.46%

Other liabilities                            833,356                                    365,405
                                     ----------------                            ---------------
Total liabilities                          6,824,149                                  4,377,887

Capital securities                           160,000                                    160,000

Equity                                       870,290                                    620,550
                                     ----------------                            ---------------
Total liabilities and equity         $     7,854,439                             $    5,158,437
                                     ================                            ===============

NET INTEREST SPREAD:                                                    10.76%                                       10.46%
                                                                      =========                                  ===========


Interest income to
     average interest-earning assets                                    16.13%                                       15.92%
Interest expense to
     average interest-earning assets                                     4.45%                                        4.94%
                                                                      ---------                                  -----------
Net interest margin                                                     11.68%                                       10.98%
                                                                      =========                                  ===========

</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 March 31
                                                    1999 vs. 1998
                                    --------------------------------------------
                                      Increase         Change due to (1)
                                                   -----------------------------
(Dollars in thousands)               (Decrease)      Volume          Rate
--------------------------------------------------------------------------------
<S>                                  <C>           <C>              <C> 
Interest Income:
Consumer loans                       $ 109,055     $ 102,036        $ 7,019
Federal funds sold                       2,751         3,209           (458)
Other securities                         3,233         3,249            (16)
                                    -------------  ------------  -------------
    Total interest income              115,039       108,494          6,545

Interest Expense:
Deposits                                18,286        19,694         (1,408)
Borrowings                               7,459         7,171            288
                                    -------------  ------------  -------------
    Total interest expense              25,745        26,865         (1,120)
                                    -------------  ------------  -------------
    Net interest income               $ 89,294      $ 81,629        $ 7,665
                                    =============  ============  =============

(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,   which   consists   primarily  of   servicing   and
securitizations income and credit product fee income,  represented approximately
62% and 54% of gross  on-balance sheet revenues for the three months ended March
31,  1999 and  1998.  Total  non-interest  income  increased  126.5%,  or $266.6
million, to $477.3 million for the first quarter of 1999 over the same period in
1998.  This  increase is  attributable  to increased  credit  product fee income
realized  from  proprietary  fee-based  products,   increased  late,  overlimit,
membership and processing fees and moderately  higher average  securitized  loan
balances.

Servicing Securitization Income
     As of March 31, 1999, securitizations  outstanding provided $7.4 billion in
funding,  representing 46% of total managed funding, compared with $6.9 billion,
or 55%, as of March 31, 1998. The decrease in  securitizations  outstanding as a
percentage  of  total  managed  funding  as of  March  31,  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 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").

     For the three  months ended March 31, 1999,  servicing  and  securitization
income increased $17.1 million from the same period in the prior year, to $131.2
million. This increase reflects higher overall finance charge and fee revenue on
securitized  loans and  moderately  higher  average  securitized  loan balances,
partially  offset by increased net credit losses and a year over year  reduction
of the gain on sale upon transfer of assets.

Credit Product Fee Income
     Credit product fee income includes late and overlimit charges, cash advance
fees,  membership  and  processing  fees,  revenues from  proprietary  fee-based
products,  and interchange activity. Fee revenue realized from securitized loans
is not included in credit product fee income but is instead  recorded as part of
servicing and securitizations  income. For the three months ended March 31, 1999
and 1998,  credit  product  fee  income was $341.8  million  and $96.4  million,
reflecting  increased  volume in fee revenue  associated  with asset and account
growth and  increases  in fee rates.  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  first
quarter 1999 and previous period results will continue.

     The  Company  markets  a number  of  proprietary  fee-based  services  that
complement  our credit  products.  For the three months ended March 31, 1999 and
1998,  managed  fee-based  product  revenue  totaled  $117.0  million  and $36.2
million,  reflecting increased  penetration rates for sales of these products to
the Company's customer base. Proprietary fee-based product revenue is recognized
ratably  over the term of the  product,  beginning  after the end of the free or
money-back  guarantee  period,  if any. Late and overlimit  fees totaled  $137.7
million and $51.7  million for the three  months  ended March 31, 1999 and 1998.
Annual  membership  fees,  processing  fees,  cash advance fees, and interchange
income also  increased  during the first quarter of 1999 over the same period in
1998 as a result of  customer  volume  growth.  The  Company  has also  realized
increases in the customer base of its lower line credit card product  offerings,
which  generate  higher  levels  of fee  revenue.  Annual  membership  fees  are
recognized over the life of the membership period, while cash advance, late, and
overlimit fees and interchange  income are recognized  monthly.  Processing fees
are offset against loan  origination  costs and any remaining income is deferred
and amortized over one year.

Non-Interest Expense
     Non-interest  expense  includes loan origination  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  the direct  nonsolicitation
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  non-credit  card  revolving  lines of credit,  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.  In the three  months  ended  March 31,  1999 and  1998,  the  Company
amortized  loan  origination  costs of $11.2 million and $9.8  million.  For the
three months ended March 31, 1999 and 1998,  loan  origination  costs were $99.4
million and $41.6 million,  reflecting  increased  direct mail volumes and other
marketing initiatives.

     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 months ended
March 31, 1999 and 1998:

                                                     Three months Ended March 31
                                              ----------------------------------
     (Dollars in thousands)                            1999              1998
     ---------------------------------------------------------------------------
     Non-interest Expense:
     Salaries and employee benefits                 $ 95,987          $ 59,734
     Solicitation                                     99,447            41,612
     Occupancy, furniture and equipment               15,304            11,266
     Data processing and communications               24,762            15,754
     Other                                            81,606            53,687
                                              ---------------- -----------------
             Total                                  $317,106          $182,053
                                              ================ =================

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  launched 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 defines 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 are inventoried and critical systems
and critical vendors identified; (3) assessment, in which Year 2000 readiness of
the Company's systems is assessed;  (4) modification,  in which affected systems
are replaced,  repaired,  upgraded,  or retired; and (5) testing, in which final
testing is performed for Year 2000 compliance.

     The Company is currently in conformity  with its banking  regulators'  Year
2000  requirements.   The  planning,   inventory,   and  assessment  phases  are
substantially  complete,  including  the  inventory  and  assessment of critical
systems and  vendors.  In the  modification  phase,  the  Company  substantially
completed  remediation of internally  developed systems in June 1998. Repair and
replacement  of third  party-provided  hardware and software were  substantially
complete as of March 31, 1999, and  infrastructure  upgrades are currently being
worked on and are scheduled to be completed by June 30, 1999. In July 1998,  the
Company began testing its internally developed and third party-provided  systems
for Year 2000 compliance.  Testing of internally  developed critical systems was
substantially  completed in December 1998, while testing of third party-provided
critical systems was substantially completed as of March 31, 1999. Final testing
of all  systems is  scheduled  to be  completed  by  mid-July  1999.  Statements
regarding  completion  dates for  various  aspects of the Year 2000  project are
estimates only.  There can be no guarantee that the phases of the Company's Year
2000 project described above will be completed when anticipated.

     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. A significant  majority of the Company's
critical vendors have represented to the Company that their systems and products
will be Year 2000  compliant by June 30,  1999.  The Company is  monitoring  the
progress  of its  critical  vendors  and other  third  parties  and  selectively
conducting tests to determine whether they have accurately  assessed the problem
and taken corrective  action.  There can be no assurance that third parties that
supply  products  and  services  to  the  Company's  critical  systems  will  be
successful in taking corrective action in a timely manner.

     If the  Company is  unsuccessful  in its  efforts to correct  its  critical
systems or if third  parties on which the Company  relies do not  correct  their
systems, the Company could experience  significant  disruption to its operations
(including loan  origination  and servicing),  its ability to obtain and provide
funds, and its financial and accounting systems. Such disruption 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.

     The Company has augmented  its existing  business  resumption  and disaster
recovery  plan to include  contingency  plans with respect to  disruptions  that
might  result from Year 2000  issues.  There can be no  assurance  that any such
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 $9.1 million in Year
2000 project  expenses  through March 31, 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 $75.6  million  and $36.7
million  for the three  months  ended  March 31,  1999 and 1998.  The  Company's
effective tax rate increased to 39.98% for the three months ended March 31, 1999
from 39.55% 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,  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 for the three months ended
March 31, 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 4.91% as of March 31, 1999  compared  to 4.61% as of March 31,  1998,
and 5.33% as of December 31, 1998. The increase in delinquencies  over the first
quarter of 1998 reflects account seasoning,  the changing product mix (including
an increase in lower line credit card  products,  which tend to result in higher
delinquencies) and loan portfolio acquisitions.

<TABLE>
<CAPTION>

                                                                March 31
                                -------------------------------------------------------------------------
                                               1999                                   1998
                                ----------------------------------     ----------------------------------
                                                        % of                                   % of
                                                        Total                                  Total
(Dollars in thousands)               Loans              Loans               Loans              Loans
                                ----------------    --------------     ----------------    --------------
<S>                             <C>                 <C>                <C>                 <C>
Reported: (1)
Loans outstanding                    $ 6,857,160          100.00%           $ 3,769,622          100.00%
Loans delinquent:
     30 - 59 days                        108,549            1.58%                68,269            1.81%
     60 - 89 days                         83,352            1.22%                44,136            1.17%
     90 or more days                     176,615            2.58%                87,896            2.33%
                                -----------------   --------------     -----------------   --------------
     Total                             $ 368,516            5.37%             $ 200,301            5.31%
                                =================   ==============     =================   ==============
Managed:
Loans outstanding                   $ 14,340,815          100.00%          $ 10,655,636          100.00%
Loans delinquent:
     30 - 59 days                        224,887            1.57%               171,204            1.60%
     60 - 89 days                        158,902            1.11%               109,370            1.03%
     90 or more days                     320,885            2.24%               210,651            1.98%
                                -----------------   --------------     -----------------   --------------
     Total                             $ 704,674            4.91%             $ 491,225            4.61%
                                =================   ==============     =================   ==============

(1) Includes loans held for securitization.
</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  fee-based product sales 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 expenses.

     The  annualized  managed  net credit loss rate  increased  to 7.62% for the
first  three  months of 1999,  compared  to 6.78%  for the same  period in 1998,
reflecting  higher  credit  loss rates on  acquired  portfolios.  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.  Pro forma  managed net credit
losses on the Company's core accounts (i.e. managed loans excluding the acquired
loan  portfolios)  remained  stable at 6.58% for the first three  months of 1999
compared to 6.49% for the same period in 1998.

     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
                                                                  March 31
                                                       --------------------------------
(Dollars in thousands)                                     1999              1998
                                                       -------------      -------------
<S>                                                    <C>                <C>
Reported: (1)
Average loans outstanding                                $ 6,283,115       $ 3,980,578
Net charge-offs                                             $ 99,973          $ 58,895
Net charge-offs as a percentage
   of average loans outstanding                                6.36%             5.92%

Managed:
Average loans outstanding                               $ 13,785,341      $ 10,538,672
Net charge-offs                                            $ 262,759         $ 178,518
Net charge-offs as a percentage
   of average loans outstanding                                7.62%             6.78%

(1) Includes loans held for securitization.
</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
                                                                 March 31
                                                      --------------------------------
(Dollars in thousands)                                     1999             1998
                                                      --------------    --------------
<S>                                                   <C>               <C>
Balance at beginning of period                             $ 451,245        $ 145,312
Provision for credit  losses                                 182,073           57,656
Reserve acquired                                              14,310          105,367
Charge-offs                                                 (115,506)         (64,420)
Recoveries                                                    15,533            5,525
                                                      ---------------  ---------------
Net charge-offs                                              (99,973)         (58,895)
                                                      ---------------  ---------------
Balance at end of period                                   $ 547,655        $ 249,440
                                                      ===============  ===============

Allowance for credit losses to loans at period-end (1)         7.99%            6.80%

(1) Excludes loans held for securitization.
</TABLE>

     The allowance for credit losses  increased to $547.7  million,  or 7.99% of
on-balance  sheet loans, as of March 31, 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 three primary strategies to maintain a strong
liquidity   position:   diversification   of  funding  sources;   dispersion  of
maturities; and maintenance of backup liquidity sources. The Company manages its
short-term liquidity position by projecting cash requirements,  maintaining cash
balances,  limiting  liability  concentrations,  and prefunding  large liability
maturities.  The  longer-term  liquidity  position is managed by maintaining its
credit facilities and investment  portfolio at the appropriate size,  dispersing
liability  maturities,  and  developing  new  funding  products,   markets,  and
investors.

     The  Company's  approach  to funding  its  assets is to seek a  diversified
funding mix and investor  base.  Products  offered  include  direct and brokered
retail and institutional  deposits, term federal funds, public and private asset
securitizations,  a committed revolving credit facility,  mandatorily redeemable
capital  securities,  and senior and  subordinated  bank notes.  Within  product
categories, funding is diversified in terms of the types of products offered and
the types, industries, and geographical locations of investors.

     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 goal is to  achieve  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 March 31, 1999 and 1998.

<TABLE>
<CAPTION>
                                                         March 31, 1999                                March 31, 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                           $ 437,929      $ 275,842     $ 713,771        $ 329,269     $ 117,726      $ 446,995
Over three months through 12 months            1,065,863        545,228     1,611,091          642,500       218,602        861,102
Over one year through five years                 925,646        897,037     1,822,683          534,545       578,904      1,113,449
Deposits without contractual maturity            988,086         79,698     1,067,784          897,721        68,991        966,712
                                           -------------------------------------------   -------------------------------------------
     Total Deposits                           $3,417,524     $1,797,805    $5,215,329      $ 2,404,035     $ 984,223    $ 3,388,258
                                           ===========================================   ===========================================

</TABLE>

     Deposits  increased  to $5.2 billion as of March 31, 1999 from $4.7 billion
as of  December  31,  1998.  This  increase  is  attributable  to the  Company's
strategic  decision  to  increase  deposit  funding  and the  strong  demand for
FDIC-insured deposits.

     During the first three months of 1999, the Company, through one of its
banking  subsidiaries,  issued an additional  $550 million of senior bank notes,
bringing  the total  outstanding  as of March 31,  1999 to $949.3  million.  The
following  table  shows  the  Company's   unsecured  funding   availability  and
outstandings as of March 31, 1999.

<TABLE>
<CAPTION>

                                                                              March 31, 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)               2/98        $4,000,000         $949,259          2/13
Short-term credit facilities (three 364 day              Various           275,000                -       Various
facilities)
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

(1)  All funding sources are revolving except for the Providian Financial shelf registration and
     the Capital Securities.  Funding availability is subject to market conditions.
(2)  Includes  availability  to issue up to $500  million of  subordinated  bank notes, none outstanding
     as of March 31, 1999

</TABLE>

     On April 26, 1999, the Company entered into a new 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) and 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  renewed   annually.   Balances
securitized under conduit and variable funding  facilities  totaled $2.9 billion
as of March 31, 1999.

     The  Company's  term  securitizations  are  expected to  amortize  over the
periods indicated below, based on currently outstanding  securitized loans as of
March 31, 1999:

                                                                          Amount
                                                                      Amortizing
          Year                                             (Dollars in millions)
          ----------------------------------------------------------------------
          1999                                                            $  158
          2000                                                               792
          2001                                                             1,026
          2002                                                             1,472
          2003                                                               832
          2004                                                               220

     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
regulations  further  describe  three capital  adequacy  ratios that are used to
measure  whether a financial  institution is "well  capitalized"  or "adequately
capitalized":



<PAGE>

<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 March 31, 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                                                        11.67%             11.31%
Tier 1                                                                  10.26%              9.96%
Leverage                                                                12.00%              7.07%

</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,  set
independently  of market  interest  rates.  The interest  rates on the Company's
liabilities  are  generally  indexed to LIBOR or are fixed rates based on United
States Treasury Bond rates. 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 Company's fixed APR credit card  receivables have no stated maturity or
repricing period. However, the Company generally has the right to increase rates
when a customer  fails to comply  with the terms of the  account  agreement.  In
addition,  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 Company  occasionally  reprices  receivables  to achieve
business objectives. These objectives include managing profitability, responding
to customer requests and balancing the risk/return trade-off.

     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 March 31, 1999 and takes into
consideration the Company's current hedging activity:

                                                          March 31, 1999 (1)
                                                     ---------------------------
Change in Interest Rates                                 Percentage Change In
                                                     ---------------------------
(In Basis Points)                                       NII (2)       MVPE (3)
-------------------------------                      ------------- -------------
+200                                                     (2.7)%        (9.1)%
Flat                                                         0%            0%
-200                                                       3.5%         11.7%

(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.


     The table  above  does not  necessarily  indicate  the  effect  of  general
interest  rate  movements  on the  Company's  net interest  income,  because 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.

     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.  One hedging strategy
employed by the Company is to swap  LIBOR-indexed  variable rate liabilities for
fixed rate  funding to support  fixed rate  assets.  In this case,  the  Company
agrees with a counterparty  to exchange  interest  payments on a notional amount
for a fixed period,  with the Company making  payments to the  counterparty at a
fixed interest rate and the counterparty making variable payments to the Company
based on LIBOR.  The Company  also employs  interest  rate caps,  where,  for an
up-front fee, a  counterparty  agrees to pay the Company the excess,  if any, of
LIBOR over a specified  fixed  rate,  on a notional  amount for a fixed  period.
These  transactions  result in funding for fixed rate assets that is capped at a
given rate to minimize net interest margin compression in a rising interest rate
environment.

     All  of  the  Company's  hedging  transactions  settle  either  monthly  or
quarterly,  with either the  counterparty or the Company  remitting to the other
the net payment,  if any, for that period. The cash requirements of the Company,
if any,  resulting  from these  payments  are met with  general  operating  cash
balances. All such hedging transactions are over-the-counter  interest rate swap
and cap transactions  executed with highly rated United States and international
banks under standard Master Agreements of the International Swap and Derivatives
Association,  Inc. and 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
                                                                       March 31
                                                       ----------------------------------------
(Dollars in thousands)                                     1999                         1998
                                                       -----------                  -----------
<S>                                                    <C>                          <C> 
interest rate swap agreements:
         Beginning Balance                             $  635,500                   $  955,500
         Additions                                              -                      100,000
         Maturities                                             -                      100,000
                                                       -----------                  -----------
         Ending Balance                                $  635,500                   $  955,500
                                                       ===========                  ===========
Interest rate cap agreements:
         Beginning Balance                             $  671,000                   $  922,220
         Additions                                         50,000                           -
         Maturities                                        52,000                      212,750
                                                       -----------                  -----------
         Ending Balance                                $  669,000                   $  709,470
                                                       ===========                  ===========
</TABLE>

     Notional amounts of interest rate swaps and caps outstanding have decreased
due to market  conditions that have created a closer match between the Company's
assets and liabilities. As market conditions 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 a rigorous  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 enters into master netting  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  also  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. This credit risk exposure
is then aggregated with other  non-derivative  credit risks  associated with the
counterparty  to determine  compliance with the total credit risk limit for such
counterparty  established  by the Company during the credit review  process.  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.


<PAGE>


PART II.  OTHER INFORMATION


Item 1. Legal Proceedings.

     The Company has been named as a defendant in various legal actions  arising
in the ordinary course of the Company's business. In the opinion of the Company,
any  liability  that is likely to arise with  respect to these  actions will not
have a  material  adverse  effect on the  consolidated  financial  condition  or
results of operations of the Company.

Item 5.  Other Information.

     On May 11, 1999, the  shareholders of the Company  approved an amendment to
the Company's Amended and Restated  Certificate of Incorporation which increases
the number of authorized  shares of the Company's  common stock from 400 million
to 800 million. A Certificate of Amendment of the Company's Amended and Restated
Certificate of Incorporation was filed on May 12, 1999.

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

     (a) Exhibits Required by Item 601 of Regulation S-K.
     
     Exhibit 3.1 Certificate of Amendment of the Company's  Amended and Restated
     Certificate of Incorporation, filed on May 12, 1999

     Exhibit  10.1  Deferred   Compensation   Plan  for  Senior  Executives  and
     Employees, as amended and restated effective April 1, 1999

     Exhibit 10.2 1999 Non-Officer Equity Incentive Plan adopted May 11, 1999

     Exhibit 12.1 Computation of Ratio 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 March 26,  1999 with  respect to
Amendment  No. 1 to the Rights  Agreement  dated as of June 1, 1997  between the
Company and First Chicago Trust Company of New York, as Rights Agent.

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

<TABLE>
<CAPTION>
PROVIDIAN FINANCIAL CORP.
Select Financial Data
                                                        Three Months
                                                           Ended
                                                         March 31,                     Year Ended December 31
                                                                          ---------------------------------------------
(dollars in thousands)                                      1999          1998      1997      1996      1995      1994
                                                        -------------    ------    ------    ------    ------    ------
<S>                                                         <C>           <C>       <C>       <C>       <C>       <C>
EARNINGS TO FIXED CHARGES
        Excluding interest on deposits                      11.43         10.88     14.20     5.93      4.90      5.17
        Including interest on deposits                       3.29          2.93      2.66     2.34      2.34      2.69
EARNINGS TO COMBINED FIXED CHARGES AND
 PREFERRED STOCK (a)
        Excluding interest on deposits                      11.43         10.88     13.28     5.19      4.32      4.40
        Including interest on deposits                       3.29          2.93      2.63     2.25      2.24      2.51

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


<PAGE>


                                   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: May 14, 1999                         /s/ David J. Petrini
                                           -------------------------------------
                                           David J. Petrini
                                           Executive Vice President and
                                           Chief Financial Officer
                                           (Principal Financial Officer and Duly
                                           Authorized Signatory)

<PAGE>

                                               EXHIBIT INDEX


Exhibit No.

Exhibit  3.1    Certificate  of Amendment of the Company's Amended and Restated
                Certificate of Incorporation, filed on May 12, 1999

Exhibit 10.1    Deferred  Compensation  Plan  for  Senior  Executives  and
                Directors, as amended and restated effective April 1, 1999

Exhibit 10.2    1999 Non-Officer Equity Incentive Plan adopted May 11, 1999

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

Exhibit 27.1    Financial Data Schedule