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

                                   FORM 10-K

 (Mark One)
  X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934  FOR  THE  FISCAL  YEAR  ENDED  DECEMBER 31, 1997
                                      OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
 EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM         TO

                       Commission File Number  1-3410

                       AMERICAN  BANKNOTE  CORPORATION

  A Delaware Corporation                 I.R.S. Employee ID No. 13-0460520


             200 Park Avenue, New York, New York 10166-4999

                     Telephone number: (212) 557-9100

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class             Name of exchange on which registered

 Common Stock, par value $.01 per share           New York Stock Exchange
 Preferred Stock Purchase Rights                           N/A

 Securities registered pursuant to Section 12(g) of the Act:  None


 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 and (2) has been subject to such
 filing for the past 90 days.
                               Yes  X    No

 Indicate by check mark if disclosure of delinquent filers pursuant to
 Item 405 of Regulation S-K is not contained herein, and will not be
 contained, to the best of registrant's knowledge, in definitive proxy
 or information statements incorporated by reference in Part III of this
 Form 10-K or any amendment to this Form 10-K. [  ]

At March 17, 1998, the aggregate market value of the voting stock held
by non-affiliates was $86,095,000.

At March 17, 1998, 20,871,604 shares of Common Stock were outstanding.

     Documents incorporated by reference:  Portions of the Company's
definitive proxy statement for the 1998 Annual Meeting of Shareholders
are incorporated by reference into Part III.

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ITEM 1.   Business

GENERAL

     American Banknote Corporation is a holding company (the "Company")
which through its subsidiaries in the United States, Brazil, Australia and
New Zealand, and France operates in a single industry, secured products and
systems, with three principal product lines: Transaction Cards & Systems;
Printing Services & Document Management; and Security Printing Solutions.
The Company's principal subsidiaries are: American Bank Note Company
("ABN"), American Bank Note Holographics, Inc. ("ABNH"), American Bank Note
Company Grafica e Servicos Ltda. ("ABNB"), a 77.5% owned Brazilian company,
Leigh-Mardon Pty. Ltd. ("LM"), an Australian company, and Sati Holdings S.A.
("Sati"), a French company.  The Company was incorporated in 1993 in
Delaware as United States Banknote Corporation and changed its name on July
1, 1995 to American Banknote Corporation.  The Company's principal executive
offices are located at 200 Park Avenue, New York, New York 10166, and its
telephone number is (212) 557-9100.

COMPANY DEVELOPMENTS

Brazil
     ABNB was acquired on June 23, 1993.  On July 1, 1995, ABNB acquired the
security printing operations of Grafica Bradesco Ltda. ("Grafica Bradesco"),
from Banco Bradesco, S.A., in exchange for a 22.5% interest in ABNB.  As of
May 1, 1997, the Company acquired the plastic cards division of a company in
Brazil, Menno Equipamentos para Escritorio Ltda. ("Menno").  In the private
sector, ABNB produces products in all three of the Company's product lines.

Australia and New Zealand
     LM was acquired by the Company during 1996 for approximately $79.2
million.  On June 3, 1996, a 55% equity interest in LM was acquired and the
remaining 45% interest was acquired on October 1, 1996.  LM is both
Australia's oldest and largest provider of security documents and products
and the leading security printer in New Zealand, and produces products in
all three of the Company's product lines.

United States
     ABNH, a wholly-owned subsidiary, produces holograms for debit and
credit cards as well as a variety of other secure documents and operates
within the Transaction Cards & Systems and Printing Services & Document
Management product lines.

     ABN, a wholly-owned subsidiary, functions primarily in Security
Printing Solutions.  ABN and its predecessors have printed security
documents for over 200 years.

France
     Sati was acquired by the Company during August 1997 for approximately
$11.6 million.  Sati's operating companies, Sati S.A., Satel S.A. and Cidel
S.A., personalize and checks for bank and commercial customers.  In March
1998, the Company, through a subsidiary of Sati, completed the acquisitions
of MCE S.A. (Monetique Cheque Edit) and CPS S.A. (CPS Technologies).  These
companies operate within the Company's  Transaction Cards & Systems and
Printing Services & Document Management product lines.

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FOREIGN OPERATIONS AND EXPORT SALES

     Information about the Company's foreign operations and export sales is
disclosed in Notes A and M of "Notes to Consolidated Financial Statements."

     The Company continues to focus its efforts on international expansion
through joint ventures, acquisitions and foreign agent representations and
on expanding product lines.  In 1997, 1996 and 1995, the Company's sales in
foreign markets accounted for approximately 73%, 74% and 55%, respectively,
of consolidated sales.

PRODUCT LINES

     The Company serves its customers through three principal groups:
Transaction Cards & Systems; Printing Services & Document Management; and
Security Printing Solutions.

The following table presents the components of these sales for each of the
three years ended December 31:
                                  1995(1)        1996(2)         1997(3)
                                              (in millions)
                                $      %        $      %        $      %
Transaction Cards & Systems    51.0   24.8    120.6   39.0    114.0   33.9
Printing Services
   & Document Management       21.3   10.3     49.2   15.9     55.7   16.6
Security Printing Solutions   133.9   64.9    139.7   45.1    166.7   49.5
                              206.2  100.0    309.5  100.0    336.4  100.0

(1) Includes sales of Grafica Bradesco from July 1, 1995.
(2) Includes sales of LM from June 1, 1996.
(3) Includes sales of Menno from May 1, 1997 and Sati from August 1, 1997.

  TRANSACTION CARDS & SYSTEMS

     The Company is a leading supplier of a wide range of transaction cards
and products and systems in Brazil, Australia, New Zealand and the United
States. The Company is rapidly expanding its production and services
capabilities to capitalize on the increasingly cashless nature of financial
transactions, which primarily include: (i) stored-value cards, of which the
Company is the largest producer in Brazil and Australia; (ii) transaction
cards and personalization services; (iii) holograms, of which the Company is
the world's leading supplier; and (iv) equipment sales and services.

     Stored-Value Cards.  The Company entered the stored-value card market
in Brazil with the acquisition of ABNB and in Australia with the acquisition
of LM. These acquisitions have allowed the Company to rapidly expand its
capabilities and presence in regions where cashless transactions are
expected to have significant future growth. The Company is the largest
supplier of stored-value telephone cards in Brazil and Australia through its
contracts with Telebras, Brazil's national telephone company, and its
affiliated regional phone service providers, and Telstra, Australia's
national telephone company. The Company also supplies stored-value cards to
firms in the financial and transportation industries.


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     The Company is investing in smart-card development, which management
believes will complement much of the traditional magnetic-stripe card
market. During 1997, the Company secured its first major smart-card contract
with Telstra to supply Telstra Eurochip telephone cards and is the only
accredited third party supplier and initializer of Visa Cash smart-cards in
the world. The Company has also identified a number of opportunities to
produce smart-cards in Brazil, Australia and New Zealand and has made
significant investments in the equipment and technology necessary to make
and manufacture smart-cards.  The Company believes that its significant
investments in smart-card technology will allow it entry into new markets,
including the United States, with processes for GSM telephone, medical,
health, identity and loyalty card systems, as well as contact and
contactless cards.

     Transaction Cards and Personalization Services.  The Company is a
leading producer and personalizer of magnetic-stripe transaction cards,
including credit, debit, ATM, transportation, access and identification
cards, supplying customers in Brazil, Australia, New Zealand and other
countries. The Company supplies cards to financial institutions, including
those issued for American Express, VISA(TM) and MasterCard(TM), as well as
cards for major corporations and other institutions. The Company has the
ability to incorporate a number of security features, including holograms,
in substantially all of the cards it produces.

     In Australia, New Zealand and Brazil, the Company is a leader in the
manufacture and personalization of plastic transaction cards, including
credit, debit and loyalty (frequent buyer) cards. The Company handles large
scale license contracts for many Brazilian, Australian and New Zealand
states, including the production and personalization of drivers' and
shooters' licenses. In addition, the Company issues licenses and acts as
administrative agent for the motor vehicle departments of a number of
Brazilian states.

     Transaction Processing.  In 1997, the Company added capabilities in
transaction processing to its domestic operations and has begun the
acquisition of merchant processing portfolios. The Company services credit,
debit, ATM and  Electric Benefit Transfers ("EBT") transactions and loyalty
and university card programs through proprietary computer and telephone
switching hardware and software which process financial transactions and
provide customized client reporting, customer service and support.

     The Company is a 25% owner in a card manufacturing and service bureau
venture in Israel, OrdaCard Hitec Industries (1995) Ltd.  OrdaCard also
pursues smart-card system sales and development of smart card technologies
primarily for markets in the Middle-East and Africa.

     Holograms.  The Company is the world's leading supplier of visual
security devices known as holograms which are principally used as
counterfeit deterrents on transaction cards and other products. Holograms
are two or three dimensional laser generated optical variable devices.  The
Company is the sole provider of transaction card holograms to
MasterCard(TM), Discover(TM), Europay(TM) and Diners Club International, and
is the majority provider of transaction card holograms to Visa(TM). To date,
the Company has produced and sold over six billion holograms for use on
financial transaction cards.

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     Equipment Sales and Service.  The Company is a direct and third party
supplier of point of sale ("POS") and electronic funds transfer point of
sale terminals ("EFTPOS") suitable for magnetic-stripe and smart-card
applications, PIN pads, customer service equipment and specialized software
in Australia and New Zealand. In addition, the Company has recently entered
into a memorandum of understanding with a major foreign manufacturer of
terminals to develop POS and EFTPOS terminals in Brazil. The Company
believes demand for new and upgraded terminals exists in those markets where
transaction terminals and other devices are being converted for
magnetic-stripe and smart-cards.

  PRINTING SERVICES & DOCUMENT MANAGEMENT

     The Company is continuing to expand its Printing Services & Document
Management business, as public and private sector institutions increasingly
outsource their in-house printing, personalization and document processing
operations around the world. Utilizing advanced inventory control systems
and "just-in-time" distribution capabilities, the Company helps businesses
and governmental institutions effectively lower costs by supplying all of
their printing, storage, processing and distribution needs.

     Electronic Printing Applications.  The Company is a full service
provider of electronic printing applications to a number of its corporate
and government customers. Electronic printing applications encompass the
secure data handling, electronic printing, personalization and mailing of
documents for large-scale billing cycles. This process consists of
computer-driven, variable data electronic printing, normally onto
pre-printed base stock. Primary applications are billing and fund collection
systems, check and credit card statements, letter checks and invoices.

     In Australia, New Zealand, Brazil and France, the Company provides
electronic printing application services for institutions in the banking,
insurance, utilities and telecommunication industries, as well as for a
number of state and federal government agencies. In Australia and New
Zealand, for example, LM has been awarded contracts by Commonwealth Bank,
Victoria Workcover, Department of Social Security, and Gas & Fuel. In
Brazil, the Company is a leading provider to the banking industry with
multi-year contracts with, among others, Banco Bradesco, Banco Itau and
Unibanco.

     Printing, Storage & Distribution.  The Company prints products such as
business forms and checks, and provides storage and distribution services to
the end user on behalf of its customers. For example, the Company prints and
distributes medical forms for the Australian Health Insurance Commission, a
government agency which previously had performed this function in-house. In
connection with this contract, the Company prints, stores and distributes
more than 500 million Medicare Direct Bill Payment Program forms annually,
to more than 45,000 doctors throughout Australia. The Company also prints,
stores and distributes many other products for its customers, such as
travelers' cheques, which it distributes worldwide, and food coupons for the
United States Department of Agriculture ("USDA"), which it distributes
throughout the United States.


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  SECURITY PRINTING SOLUTIONS

     The Company believes it is one of the world's leading printers of
counterfeit-resistant documents of value, including checks, money orders,
passports, foreign currency, stock and bond certificates and other
commercial documents of value such as gift certificates. Special materials,
elaborate steel-engraved designs and distinctive lithographic and intaglio
printing techniques enable the Company to manufacture products containing
state-of-the-art security features. The Company also offers anti-counterfeit
features such as hidden, invisible and holographic images used to verify
authenticity on packaging. The Company's holograms are used for
accountability programs and product authentication with licensing
organizations to prevent the sale of counterfeit goods. To ensure the
protection of its customers' orders, the Company's manufacturing, storage
and distribution facilities employ high levels of plant security, including
guards, alarms, video monitoring and extensive accountability controls. The
Company recently opened a security printing facility in Columbia, Tennessee,
which utilizes modern multi-color presses.  The Company was recently awarded
a $14 million contract and is printing currency for the Reserve Bank of
India at its new Tennessee facility.

     Checks.  The Company is the leading private sector supplier of
personalized checks for major banks in Brazil, Australia and New Zealand and
one of the leading private sector suppliers in France. Under multi-year
contracts, the Company supplies banks and other financial institutions with
checks, same-day check personalization, and a wide array of security
printing products such as money orders and deposit books. Management of the
Company believes that additional Brazilian, Australian, New Zealand and
French banks will seek to outsource check printing and personalization, thus
providing opportunities for the Company to expand its leadership in this
product area.

     The Company believes that it is one of the world's largest printers and
distributors of travelers' cheques. Customers include American Express,
Citicorp, MasterCard(TM), VISA(TM) and their issuing banks. Management
believes a large number of its contracts are the result of the Company's
success in cross-selling to existing transaction card customers.

     Stocks and Bonds.  The Company believes it is the largest producer of
listed companies' intaglio stock and bond certificates. The Company produces
intaglio printed certificates with the unique border designs and vignettes
that are required by the New York Stock Exchange. The Company maintains a
library of engraving plates for a large percentage of publicly traded
securities.

     Government Products.  Government products include a variety of security
documents printed for federal, state and local governments throughout the
world. The Company manufactures food coupons, currency, passports, visas,
tax revenue stamps, postal panels, social security cards and similar
products for federal governments. The Company also supplies secure
documents, such as motor vehicle registrations, title certificates and
licenses, birth certificates, identity cards, and transportation passes for
its government customers. For example, the Company prints American
Commemorative Postage Stamp Panels for the United States Postal Service,
money orders for the Australian Post, U.S. Social Security cards, and
passports for such countries as Australia, Venezuela and Lebanon.
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     The USDA is the Company's largest domestic customer for which it has
printed food coupon requirements for more than 20 years. Food coupons are
intaglio printed documents accepted by grocery stores in lieu of currency
used by millions of Americans every year.

SALES AND MARKETING

     The Company sells its products and services through a combination of
direct sales personnel, commissioned sales personnel, independent sales
representatives and alliances. The Company markets and sells secure products
and services to a number of financial institutions, corporations,
governments and government agencies worldwide. The sales force is supported
by marketing professionals who provide research and product development
assistance. The sales and marketing activity is focused on the three main
product groups with markets defined by geographic territories.

COMPETITION

     Competition in the Company's markets is based upon price, service,
quality, reliability and the ability to offer a broad range of secure
transaction products and services. Each of the Company's domestic and
foreign operations conducts its business in highly competitive markets.
Internationally, the Company has competitors in currencies and passports in
the United Kingdom, Germany, France and Canada, while domestically there are
several different competitors depending on the product line. In Brazil and
Australia, there is competition across different products and services, but
the Company believes there is no other company which offers the full range
of secure products and services on a national basis. In France, the Company
has one of the leading market share positions, with many smaller competitors
in a highly fragmented market. Certain of the Company's competitors also
have greater financial resources than the Company. The Company also competes
with other printers in various product lines as well as card manufacturers
and other companies engaged in businesses unrelated to printing. Alternative
goods or services, such as those involving electronic commerce, that can
replace printed products or holograms could also affect demand for the
Company's products.

PATENTS

     The Company presently holds, or is licensed under, many United States
and foreign patents, trademarks and copyrights and continues to pursue
protection when available in strategic markets.

BACKLOG

     At December 31, 1997 and December 31, 1996, the Company had an overall
backlog of approximately $55 million and $77 million, respectively. The 1997
and 1996 backlog principally consisted of orders relating to stored-value
telephone cards, currency, food coupons, travelers' cheques, passports,
personal checks and financial payment cards. Generally, a substantial
portion of the Company's backlog is produced and shipped within twelve
months.


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RAW MATERIALS

     The Company is not materially dependent upon any one supplier for raw
materials used in its business.  Certain raw materials used are available
from a limited number or only a single source supplier and certain other
products, particularly for national governments, require domestic content
which limits the number of potential suppliers.  The Company's relationships
with its primary suppliers are generally reliable.

ENVIRONMENT

     The Company engages in the use or disposal of substances that may be
considered to be toxic or hazardous substances under applicable
environmental laws. The Company believes that its compliance with such laws
has not had, and will not have, a material effect on its capital
expenditures, earnings, financial position or competitive position.

EMPLOYEES

     At December 31, 1997, the Company had approximately 3,390 employees
consisting of 3,080 employees engaged in manufacturing, 288 engaged in plant
administration and sales and 22 in executive, corporate and administrative
functions. Approximately 52% of the Company's domestic employees, 44% of
LM's employees, all of ABNB's employees are represented by labor unions.
None of Sati's employees are represented by labor unions.  The Company has
multi-year contracts with labor unions covering a substantial number of
employees of ABN and ABNH, several of which were renegotiated or entered
into during 1997. The Company's future profitability will be dependent, in
part, on its ability to maintain satisfactory relationships with labor
unions and employees and in avoiding strikes and work stoppages. The Company
considers its employee relations to be very good.

ITEM 2.  Properties
                        Size (in     Owned or
Location                sq. feet)    Leased     Operations

UNITED STATES
200 Park Avenue          12,500      Leased     Executive,
New York, New York                              administration and
                                                sales offices

Horsham,                111,000      Owned      Administration and
Pennsylvania                                    sales offices; printing

Caroline Road,          104,000      Owned      Food coupon distribution
Horsham, Pennsylvania                           and storage

Philadelphia,            95,000      Owned      Ink manufacturing and
Pennsylvania                                    storage

Elmsford,                59,000      Leased     Administration, sales
New York                                        offices, research and
                                                development and hologram
                                                production

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                        Size (in     Owned or
Location                sq. feet)    Leased     Operations

Columbia,                50,000      Owned      Printing
Tennessee

Huntingdon Valley,       30,000      Leased     Hologram production
Pennsylvania

Hamilton Place,          23,000      Leased     Finishing and storage
Tennessee

AUSTRALIA and
NEW ZEALAND
Highett,                139,000      Leased     LM head office,
Victoria                                        administration, sales
                                                imaging, plastic cards,
                                                manufacturing and
                                                personalization,
                                                smart-card manufacturing
                                                and personalization

Dry Creek,               32,000      Leased     Sales, check personalization
South Australia                                 and other printing
                                                applications

Cheltenham,              24,000      Leased     Sales, manufacturing and
Victoria                                        service of point-of-sale
                                                devices

Wellington,              23,000      Leased     Sales, card manufacturing
New Zealand                                     and check and card
                                                personalization;
                                                executive offices

Kedron,                  18,000      Leased     Sales, check personalization
Queensland                                      and printing

Rosebery,                16,000      Leased     Card printing and
New South Wales                                 personalization

Regents Park,            16,000      Leased     Sales and check
New South Wales                                 personalization

Auckland,                15,000      Leased     Check and card
New Zealand                                     manufacturing and
                                                personalization

Perth,                   13,000      Leased     Sales, check personalization
Western Australia                               and printing

Canberra,
ACT                       5,000      Leased     Passport production

Auckland,                 4,000      Leased     Card manufacturing
New Zealand                                     and personalization 
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                        Size (in     Owned or
Location                sq. feet)    Leased     Operations

BRAZIL
Jandira,                310,000      Leased     Printing, storage and
Sao Paulo                                       distribution, electronic
                                                printing and smart-card
                                                manufacturing and
                                                personalization

Rio de Janeiro,         140,000      Owned      Checks, financial and
Rio de Janeiro                                  telephone cards, intaglio
                                                documents and printing

Erechim,                 51,000      Leased     Production and
Rio Grande do Sul                               personalization of
                                                transaction cards

FRANCE
Chambray les Tours,      43,000      Owned      Headquarters, sales check
Tours                                           personalization and other
                                                printing operations

Carquefou,               18,000      Owned      Sales and check
Nantes                                          personalization

Dijon,                   18,000      Owned      Sales and check
Dijon                                           personalization

Meyzieu,                 11,000      Owned      Sales and check
Lyon                                            personalization

     In addition, the Company leases a 148,000 square foot facility in Los
Angeles, California.  In 1994, the Company decided to completely vacate such
facility and has subleased it for the remaining term.

ITEM 3.  Legal Proceedings

     In January 1994, Vladimir v. United States Banknote Corporation, et
al., and in February 1994, Sinay v. United States Banknote Corporation, et
al., were filed in the United States District Court for the Southern
District of New York (the "Class Action"). On June 16, 1995, the Court
approved certification of a class in Vladimir consisting of all persons who
purchased stock in the open market from April 1, 1993 through January 6,
1994. On February 26, 1996, the Court dismissed the Sinay action, without
prejudice. The parties reached a settlement in Vladimir prior to entry of a
judgment and ruling on the Company's and Mr. Weissman's pending Motions for
Summary Judgment, Judgment as a Matter of Law and for a new trial.  On
September 30, 1997, the Court approved the settlement dismissing the action,
with prejudice, which became final on March 11, 1998. Under the terms of the
settlement, the Company's full contribution of $0.5 million was paid in
December 1997 and the balance paid by the Company's insurers.


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     In January 1994, Atencio v. Morris Weissman, et al. was filed in the
Court of Chancery for the State of Delaware, New Castle County, against
various directors and/or officers of the Company, on behalf of a purported
class and derivatively on behalf of the Company. In February 1994, Rosenberg
v. Morris Weissman, et al. was filed in the same court. The Atencio and
Rosenberg actions assert claims for breach of fiduciary duty and allege the
sale of Common Stock while in possession of material non-public information.
These cases have not been actively pursued. As derivative actions, the
Company's insurers have been responsible for the costs of defending against
such actions.

     On November 1, 1994, the Company filed an action against Thomas De La
Rue, AG ("DLR") and its parent, De La Rue Plc which is pending in the United
States District Court for the Southern District of New York. The complaint
alleges breach of contract in connection with the 1993 purchase of the
Company's Brazilian subsidiary from DLR and seeks approximately $1.5 million
in damages. DLR has asserted approximately $400,000 in counterclaims. On
September 17, 1997, the Court denied DLR's motions for summary judgment,
ruling the contract language ambiguous, and directed as an issue for the
jury whether the Company may pierce the corporate veil and proceed with its
claims against DLR and DLR's parent, De La Rue, Plc.

    On November 2, 1994, Thomas De La Rue AG v. United States Banknote
Corporation, et al. was commenced in the United States District Court for
the Southern District of New York. DLR alleges, among other things, breach
of contract in connection with the Brazil purchase agreement and the alleged
failure to expeditiously register 944,538 shares of Company Common Stock
issued to DLR. DLR seeks approximately $4.0 million in connection with its
claims. A trial has been scheduled for June 1998.

     During the year ended December 31, 1996, the Company recorded a $2.4
million provision relating to pending litigation. The Company's cost of
settlement of the Vladimir litigation and certain legal fees have been
charged against the provision during 1997.

     The Company and its subsidiaries are also parties to various additional
lawsuits (as both plaintiff and defendant) related to various matters in the
normal course of business, including patent infringement, contract, labor
and environmental, which in the opinion of management, are not anticipated
to have a material impact on its consolidated financial position or results
of operations.

     During 1997, ABNB received assessments form the Brazilian tax
authorities for approximately $25 million relating to taxes other than
income.  The Company is appealing the assessments, believes it has grounds
for appeal, and has not recorded a provision for these assessments.
Management of the Company believes that the ultimate resolution of these
assessments will not have a material impact on its consolidated financial
position or results of operations.

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

     There were no matters submitted to a vote of security holders in the
fourth quarter of 1997.


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ITEM 10.  Directors and Executive Officers of the Company

     The following table sets forth certain information regarding the
current executive officers of the Company.
<TABLE>
<CAPTION>
                                     Positions and Offices             Office Held
Name                        Age      With the Company                  Since
<S>                         <C>      <C>                               <C>
Morris Weissman* . . . . .  56       Chairman of the Board and         (1)
                                     Chief Executive Officer
Bette B. Anderson. . . . .  69       Director                           June 1994
Dr. Oscar Arias S.   . . .  57       Director                           July 1995
C. Gerald Goldsmith. . . .  69       Director                           July 1990
Ira J. Hechler . . . . . .  79       Director                           February 1990
David S. Rowe-Beddoe . . .  60       Director                           July 1990
Alfred Teo . . . . . . . .  51       Director                           June 1996
John T. Gorman*. . . . . .  53       Executive Vice President           (1)
                                     and Chief Financial Officer
Harvey J. Kesner*  . . . .  40       Executive Vice President,          (1)
                                     General Counsel and Secretary
Patrick J. Gentile*. . . .  38       Vice President and Corporate       (1)
                                     Comptroller
Ward A.W. Urban* . . . . .  38       Vice President, Treasurer and
                                     Assistant Secretary                (1)
Phillip  Gray. . . . . . .  49       Managing Director of LM            June 1996
Francis Lavelle. . . . . .  48       Managing Director of Sati          August 1997
Sidney Levy. . . . . . . .  41       Managing Director of ABNB          February 1994
Robert K. Wilcox  . .  . .  51       Senior Vice President              (1)
                                     Manufacturing, General
                                     Manager ABN
Joshua C. Cantor . . . . .  38       President ABNH                     (1)
</TABLE>
______________________________________________
* "Executive Officer" under the Securities Exchange Act of 1934, as amended.
(1)  See below.

     Morris Weissman.  Mr. Weissman has served as Chairman of the Board and
Chief Executive Officer and as a Director of the Company since 1990.  Mr.
Weissman assumed the additional duties of Chief Operating Officer in July
1995.  Mr. Weissman was Chairman and Chief Executive Officer of United
States Banknote Company, L.P. ("USBC") a predecessor of the Company, from
1986 to 1990 and Vice Chairman and Director of USBC's predecessor from 1976
to 1986.  Mr. Weissman is a Director of the Convenience and Safety
Corporation and a Trustee of the Jackie Robinson Foundation and the Business
Council for the United Nations.

     Bette B. Anderson.  Mrs. Anderson has served as a Director of the
Company since June 1994.  She has served as President of Kelly, Anderson,
Pethick & Associates, Inc., a Washington based management firm, since 1991
until January 1996 when she became Vice Chairperson.  Mrs. Anderson served
as Undersecretary of the Treasury from 1977 to 1981.  Mrs. Anderson is a
Director of ITT Corporation, ITT Educational Services, Inc, United Payors &
United Providers, Inc. and ITT Hartford Group, Inc, and serves on various
Board Committees of such companies. Mrs. Anderson also is a member of the
Treasury Historical Association, a Director of the Miller Foundation at the
University of Virginia and a member of the Advisory Council of the Girl
Scouts of America.
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     Dr. Oscar Arias S.  Dr. Arias has served as a Director of the Company
since September 1995.  He is the former President of Costa Rica and the 1987
Nobel Peace Prize recipient.  He is President of International Press
Service, a Director of the Arias Foundation for Peace and Human Progress,
Stockholm International Peace Research Institute and International Center
for Human Rights and Democratic Development Institute for International
Studies at Stanford University.  In addition, Dr. Arias serves on the Board
for the InterAction Council, the International Negotiation Network of the
Carter Center and Transparency International and is an active member of The
Commission on Global Governance, the International Dialogue and the Society
for International Development.

     C. Gerald Goldsmith.  Mr. Goldsmith is a private investor.  He has
served as a Director of the Company since 1990.  He is a Director of Palm
Beach National Bank and Trust, a Director of Nine West Group, Inc. and a
Director of Innkeepers, USA.

     Ira J. Hechler.  Mr. Hechler is a private investor. He has served as a
Director of the Company since 1990.  He is a Director of Leslie Fay
Companies, Inc. and Concord Camera Corp.

     David S. Rowe-Beddoe.  Mr. Rowe-Beddoe has served as a Director of the
Company since 1990.  He has been Chairman of the Board of Welsh Development
Agency since 1993 and Chairman of the Development Board of Rural Wales since
1994.  Mr. Rowe-Beddoe is also a Director of Cavendish Services Ltd. and
Development Securities plc.  Mr. Rowe-Beddoe previously held various senior
management positions, including at Revlon Inc. and De La Rue plc, where he
was an Executive Director.

     Alfred Teo.  Mr Teo has served as a Director of the Company since 1996.
He has been Chairman and Chief Executive Officer of Alpha Industries, Inc.
of the Sigma Plastics Group since 1979, Chairman and Chief Executive Officer
of Red Line Express since 1984, Hillman Eyes since 1992 and Alpha
Technologies since 1990.  Mr. Teo is a Director of Fleet Bank N.A. and a
Trustee of St. Joseph's Hospital and Stevens Institute of Technology.

    John T. Gorman.  Mr. Gorman has served as Executive Vice President and
Chief Financial Officer of the Company since 1990.  Mr. Gorman was Executive
Vice President and Chief Financial Officer of USBC from 1983 to 1990 and
Senior Vice President of Finance of USBC's predecessor from 1978 to 1983.

     Harvey J. Kesner, Esq.  Mr. Kesner has served as Executive Vice
President of the Company since June 1996 and as General Counsel and
Secretary of the Company since 1991.  Mr. Kesner was an attorney in private
practice for more than five years prior to joining the Company.

     Patrick J. Gentile.  Mr. Gentile has served as a Vice President of the
Company since June 1995, as Comptroller since 1989 and has been an employee
of the Company's predecessors since 1986.

     Ward A. W. Urban.  Mr. Urban has served as Treasurer of the Company
since August 1993 and as Vice President and Assistant Secretary since June
1995.  Mr. Urban was employed as an Assistant Vice President in the
leveraged finance department of Citibank, N.A. from August 1988 to August
1993.


<PAGE>
<PAGE>
     Phillip Gray.  Mr. Gray has served as General Manager of LM since 1990
and was General Manager of its Data Card Division prior thereto since 1987.

     Francis Lavelle.  Mr. Lavelle has served as Managing Director of Sati
since its acquisition by the Company in August 1997.  Mr. Lavelle had served
as President of Solaic, S.A. since 1991, where he headed check
personalization and card operations, including smart-card manufacturing and
development, with facilities in France and Spain.  Mr. Lavelle joined
Sligos, S.A., the prior owners of Sati, in 1973.

     Sidney Levy.  Mr. Levy has served as Managing Director of ABNB since
February 1994. Prior to joining ABNB, Mr. Levy was employed as Managing
Director of De La Rue Lerchundi in Spain since 1991 and prior thereto was
employed by Thomas De La Rue Grafica e Servicos Ltda. in Brazil, serving in
various management capacities.

     Robert K. Wilcox.  Mr. Wilcox has served as Senior Vice President --
Manufacturing of the Company since August 1995 and as Executive Vice
President -- Operations and General Manager of ABN since November 1995.  Mr.
Wilcox was Vice President of US Operations for Transcontinental Printing and
previously held senior positions at the Bureau of Engraving and Printing as
well as Gowe Printing, Arcata Graphics and C.P.Y. Jeffries Banknote Co.

     Joshua C. Cantor.  Mr. Cantor has served as President of ABNH since
November 1995 and Executive Vice President of ABN since September 1994.  Mr.
Cantor was Vice President -- Sales of ABN and employed by ABN and its
predecessor since 1986.

                            PART II


ITEM  5.  Market Price for the Company's Common Stock and Related Matters

     The Company's Common Stock is listed on the New York Stock Exchange and
trades under the symbol ABN.  As of March 17, 1998, the Company had
approximately 2,707 shareholders of record.  The reported high and low sales
prices per share of Common Stock, as reported by the Dow Jones Historical
Stock Quote Report Service, were as follows:
                             1997               1996
                         High    Low        High    Low
                       --------------     --------------
     1st Quarter        $4.75  $3.25       $2.00   $1.25
     2nd Quarter         5.00   3.25        5.38    1.50
     3rd Quarter         6.75   4.31        5.00    2.63
     4th Quarter         6.63   4.50        5.00    3.88

     During the first quarter of 1998 through March 17, 1998 the high and
low sales prices per share of the Common Stock was $5.25 and $3.56,
respectively.

      The Company is restricted from paying cash dividends on the Common
Stock by the terms of its financing agreements.  No cash dividends have been
paid on the Common Stock and the Company does not expect to pay cash
dividends on the Common Stock in the foreseeable future.

<PAGE>
<PAGE>
ITEM 6.  Selected Financial Data

     The selected financial data presented below is derived from the
Company's consolidated financial statements, and should be read in
conjunction with the Company's consolidated financial statements, including
the notes thereto, appearing elsewhere herein.  The historical financial
data presented below reflects the results of operations of acquired entities
from their respective dates of acquisition (ABNB, June 23, 1993; Grafica
Bradesco, July 1, 1995; LM, June 3, 1996; Menno, May 1, 1997 and Sati,
August 1, 1997).
<TABLE>
<CAPTION>
                                           Year Ended December 31
                                 1997    1996      1995       1994     1993
                                   (Dollars in thousands, except share data)
<S>                             <C>      <C>       <C>       <C>       <C>
INCOME STATEMENT DATA:
Sales. . . . . . . . . . . . .  $336,359 $309,450  $206,164  $208,133  $200,079
Restructuring and
  idle equipment (1) . . . . .                       14,304     7,000    12,000
Depreciation and amortization     22,937   20,042    14,824    13,094    11,180
Operating income (loss). . . .    37,948   38,987   (11,850)   18,176    25,688
Interest expense . . . . . . .   (32,762) (28,864)  (23,147)  (21,057)  (14,605)
Foreign translation losses,
  net (2). . . . . . . . . . .      (130)    (255)      (38)   (7,037)   (5,161)
Other income, net. . . . . . .       342     (135)    2,824     1,816       222
Income (loss) before
  minority interest. . . . . .     6,833    9,333   (20,852)   (5,701)    1,855
Income (loss) before
  extraordinary item (3)(4). .     3,840    4,099   (22,415)   (5,701)    1,593
Net income (loss). . . . . . .    (1,749)  (4,099)  (22,415)   (5,815)    1,573
Imputed interest and
 dividend requirements of
 other equity security (5) . .      (171)                                   (20)
Net income (loss) per
     common share - Basic:
   Before extraordinary item .    $  .18    $  .21   $(1.17)   $( .30)   $  .08
   Extraordinary item (4). . .      (.28)
   Net income (loss) . . . . .    $ (.10)   $  .21   $(1.17)   $( .30)   $  .08

Net income (loss) per
     common share - Diluted:
   Before extraordinary item .    $  .18    $  .20   $(1.17)   $( .30)   $  .08
   Extraordinary item (4). . .    $ (.27)
   Net income (loss) . . . . .    $ (.09)   $  .20   $(1.17)   $( .30)   $  .08

Shares used in computing
   per share amounts
   Basic . . . . . . . . . . .    20,140   19,650    19,200    19,180    18,760
   Diluted . . . . . . . . . .    20,800   20,170    19,200    19,180    19,130
</TABLE>

<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                                            Year Ended December 31
                                 1997     1996      1995      1994      1993
                                           (Dollars in thousands)
<S>                             <C>      <C>       <C>       <C>       <C>
BALANCE SHEET DATA:
Cash and cash equivalents. . .  $ 17,323 $ 14,256  $ 23,525  $ 31,658  $ 15,437
Working capital. . . . . . . .    56,120   35,533    54,973    65,887    50,351
Total assets . . . . . . . . .   503,536  480,378   379,402   382,950   357,212
Long-term debt, excluding
  current portion. . . . . . .   293,215  263,548   194,156   191,192   167,782
Stockholders' equity . . . . .    55,041   46,277    40,353    62,777    68,330
</TABLE>

                        Notes to Selected Financial Data

(1)     Restructuring and idle equipment represents provisions principally for
        the consolidation of ABN's plants in 1995, 1994 and 1993, and in 1994 -
        $2.0 million for leases and equipment that will not be utilized in the
        Company's business. See "Management's Discussion and Analysis of
        Financial Condition and Results of Operations."
(2)     Results from the Company's translation of Brazilian local currency into
        dollars.  See "Management's Discussion and Analysis of Financial
        Condition and Results of Operations."
(3)     1997 includes approximately $4.0 million of reversals of tax liabilities
        no longer required, 1995 includes a $2.8 million benefit and 1993
        includes a $1.5 million charge for adjustment of deferred taxes for
        changes in enacted tax rates.  The 1995 amount pertained to decreases in
        ABNB's tax rates and the 1993 amount pertained to increases in the US
        federal corporate tax rate.
(4)     Represents charges in connection with the early extinguishment of
        indebtedness in 1997 and 1994, of approximately $5.6 million and $0.1
        million, respectively, net of associated tax benefits of approximately
        $3.0 million in 1997.
(5)     1997 relates to accretion of zero coupon subordinated convertible
        debentures issued in 1997.  1993 relates to dividend requirements of a
        preferred stock, subsequently redeemed.


<PAGE>
<PAGE>
ITEM 7.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations
Overview

     The Company's growth during the past three years has been generated
principally by acquisitions and increases in ABNB's sales.  Notes A and M of
"Notes to Consolidated Financial Statements," include geographic information
for the Company's businesses.

Results of Operations

     Overview

     The Company is a leading global provider of secure transaction
solutions, documents and systems for financial institutions, governments and
corporations through its operations in the United States, Brazil, Australia,
New Zealand and France.  The Company designs solutions and manufactures
products that incorporate anti-fraud and counterfeit resistant technologies,
including stored-value telephone, magnetic-stripe, memory and
microprocessor-based ("smart-card") transaction cards, holograms, currencies,
travelers' and other checks, stock and bond certificates and a wide variety
of electronically or digitally produced personalized documents.  Through
selective acquisitions in international markets and a program to realign and
refine its domestic manufacturing operations, the Company has improved its
financial performance since 1995 and expanded its global presence,
technological base and product lines.

     In 1993, in order to address the high cost structure in its domestic
manufacturing facilities, diversify its product offerings and reduce its
dependence on traditional security printing, the Company began to expand
internationally and realign, consolidate and upgrade its domestic
manufacturing operations.  The Company closed its Los Angeles and Chicago
manufacturing facilities and opened a manufacturing facility in Columbia,
Tennessee.  In connection with this program, the Company incurred
restructuring charges of $12.0 million, $7.0 million and $14.3 million in
1993, 1994 and 1995, respectively.  Although the Company's realignment in
1996 resulted in increased operating efficiencies and a reduction in
manufacturing and overhead costs from prior levels, domestic security
printing continues to face challenges from the increasing acceptance of
electronic commerce.  For example, volumes have declined for food coupons,
stocks and bonds, gift certificates and Travelers cheques as a result of
electronic commerce.  Management believes that additional refinement and cost
reductions of the domestic printing operations must continue to be pursued
including the addition of new product lines.  New product lines might result
in lower operating margins due to substantial personnel training costs as was
the case with a currency contract in 1997.

     The Company's international expansion began in 1993 with the acquisition
of its Brazilian subsidiary, the largest private-sector security printer and
manufacturer of transaction cards in Latin America and a leading stored-value
telephone card manufacturer in Brazil.  This expansion continued in 1996 with
the acquisition of LM, Australia and New Zealand's oldest, largest and only
fully integrated provider of secure document and transaction card solutions.
In August 1997, the Company expanded its international presence through the
acquisition of Sati, one of France's leading providers of check
personalization and electronic printing applications.  The Company's
international expansion has allowed it to capitalize on high growth markets
and diversify into new geographic markets.  
<PAGE>
<PAGE>
     The Company's international expansion has allowed it to successfully
diversify its product mix and customer base and to expand into higher growth
markets.  Over the last three years, the Company has made significant
investments in modern manufacturing and distribution equipment, systems and
technologies across its geographic markets to allow it to further increase
operating efficiencies and provide advanced solutions for its customers.  The
following table illustrates the shift in the composition of the Company's
sales by product group for each of the three years ended December 31:

                                   1995            1996            1997
                                              (in millions)
                                 $      %        $      %        $      %
Transaction Cards & Systems     51.0   24.8    120.6   39.0    114.0   33.9
Printing Services
   & Document Management        21.3   10.3     49.2   15.9     55.7   16.6
Security Printing Solutions    133.9   64.9    139.7   45.1    166.7   49.5
                               206.2  100.0    309.5  100.0    336.4  100.0

COMPARISON OF RESULTS OF OPERATIONS - 1997 WITH 1996

     The Company operates in both Brazil and Australia which had significant
foreign exchange rate fluctuations in 1997.  The comparison below reflects
the effect of changes in foreign exchange rates. The impact of foreign
exchange on the comparison between 1996 and 1995 was not material.

Sales

     Sales increased by $26.9 million or 8.7% from 1996 after giving effect
to a $14.9 million reduction in sales resulting from changes in foreign
exchange rates.  Transaction Cards & Systems ("TCS") sales decreased $6.6
million or 5.5%. Printing Services & Document Management ("PSDM") sales
increased $6.5 million or 13.2% and Security Printing Solutions ("SPS") sales
increased $27.0 million or 19.3%.

     The decrease in TCS sales was principally due to lower volume
requirements for stored-value telephone cards ($32.5 million) in Brazil.
This decrease was partially offset by a stronger demand in Brazil for
transaction cards and the acquisition of the Menno card business ($9.9
million) in May 1997.  In addition, optical variable devices increased ($4.8
million) and LM's TCS sales are included for the entire year ($11.2 million).

     The increase in PSDM sales is primarily due to the acquisition of Sati
in France ($8.7 million) and the inclusion of LM's sales for the entire year
($6.6 million).  These increases were partially offset by lower sales at ABNB
and ABNH ($8.8 million).

     The increase in SPS sales is principally due to the inclusion of LM's
sales for the entire year ($16.1 million), higher sales of secure products at
ABNB ($8.7 million), and an increase in domestic secure products ($2.2
million).

     Sales by foreign subsidiaries represented 69% and 68% of the Company's
consolidated sales in 1997 and 1996, respectively.


<PAGE>
<PAGE>
     Cost of goods sold increased $27.7 million or 13.7% partially due to
increased sales, after giving effect to an $11.5 million reduction in costs
resulting from changes in foreign exchange rates.  As a percentage of sales,
cost of goods sold was 68.3% in 1997 as compared to 65.3% in 1996.  This
increase is primarily attributable to $6.2 million of additional fixed costs
associated with the new PSDM manufacturing facility in Brazil and a
redeployment of its work force which resulted in a $3.4 million increase in
fixed overhead with a corresponding decrease in selling and administrative
expenses.  In addition, initial startup and training costs related to the
currency contract resulted in higher costs.  A favorable product mix
partially offset these increases in the cost of sales percentage.

     Selling and administrative expenses decreased $2.6 million (5.4%) from
1996 after giving effect to a $1.4 million reduction resulting from changes
in foreign exchange rates.  The decrease was principally due to lower
administrative costs in Brazil ($2.4 million).  In addition, administrative
costs decreased in Brazil as a result of the redeployment of the work force
discussed above.  These decreases were partially offset by the inclusion of
LM's operations for an entire year in 1997, ($3.2 million).  As a percentage
of sales, selling and administrative expenses declined to 13.6% in 1997 from
15.6% in 1996.

     Depreciation expense increased $2.9 million after giving effect to a
$1.0 million reduction resulting from changes in foreign exchange rates.
This increase was primarily due to the inclusion of LM for the full year
($1.5 million), the expansion of ABNB's manufacturing capacity in its new
PSDM manufacturing facility ($0.7 million) and the acquisition of Sati ($0.7
million).

     Interest expense increased $3.9 million in 1997, primarily due to a full
year of LM acquisition debt ($2.0 million), interest on the Sati acquisition
indebtedness ($0.2 million), increased debt to fund the expansion of the
Brazilian PSDM manufacturing facility ($.9 million) and higher revolving and
other credit borrowings ($.8 million).

     Foreign translation losses, net, are a result of the translation of
Brazilian local currency financial statements into US dollars.

     Other income, net increased by $0.5 million.  The amounts are net of a
loss on an interest rate lock in 1997 of $2.3 million and a litigation
provision of $2.4 million in 1996.  The amounts in 1997 include interest
income on the refund in the fourth quarter of certain prior year tax
deposits($1.1 million).

     Taxes on income (benefit) are calculated using effective tax rates for
each tax jurisdiction and various assumptions such as state and local taxes
and utilization of foreign tax credits. In 1997, a $4.0 million reversal of
tax liabilities no longer required decreased the consolidated tax expense and
resulted in a significant difference from the statutory rate. See Note G of
"Notes To Consolidated Financial Statements."

     Minority interest in 1997 and 1996 represents the 22.5% minority
interest in ABNB, and in 1996 included a 45% minority interest in LM.

     The 1997 extraordinary item of approximately $5.6 million represents the
write off of deferred debt expenses and the premiums paid to retire
approximately 87.7% of the 11-5/8% Notes, and is net of tax benefits of
approximately $3.0 million.
<PAGE>
<PAGE>
COMPARISON OF RESULTS OF OPERATIONS - 1996 WITH 1995

     Sales increased by $103.3 million or 50.1% from 1995.  Sales of
Transaction Cards & Systems increased $69.6 million or 136.5%, principally
due to increases in sales of stored-value telephone cards ($48.7 million) and
LM's sales since June 1, 1996 ($20.6 million).  Sales of Printing Services &
Document Management increased $27.9 million or 131.0%, principally due to
including Grafica Bradesco Ltda.'s ("Grafica Bradesco") sales for the full
1996 year and LM's sales since June 1, 1996.  Sales of Security Printing
Solutions increased $5.8 million or 4.3%, principally due to LM's sales since
June 1, 1996 ($25.6 million), offset partially by decreased sales of food
coupons ($9.0 million), personalized checks ($5.5 million, excluding LM's
sales), currency ($3.0 million) and other products.

     Cost of goods sold increased $53.1 million or 35.6%, including LM's cost
of sales ($30.1 million), from 1995, as a result of increased sales.  As a
percentage of sales, cost of goods sold declined to 65.3% in 1996 from 72.3%
in 1995.  Sales of Security Printing Solutions margins improved in 1996 due
to product mix and the non-recurrence of certain charges that are included in
the 1995 cost of sales.  In addition, the percentage of cost of goods sold
was also favorably impacted due to the cost reductions realized from the 1995
plant closure and downsizing plan, which was offset in part by the start-up
of the Tennessee facility.  The 1995 plant closure and downsizing plan was
substantially completed in the second quarter of 1996.  Margins were
favorably impacted by increased sales of Transaction Cards & Systems as
discussed above.  The product mix in any given period is not indicative of
the expected product mix in future periods.

     Selling and administrative expenses increased $8.4 million (21.1%) from
1995 principally due to the above acquisitions ($13.4 million), partially
offset by reduced corporate overhead ($4.0 million) and sales of Security
Printing Solutions selling expenses ($1.0 million) as a result of the 1995
restructuring.  As a percentage of sales, selling and administrative expenses
declined to 15.6% in 1996 from 19.3% in 1995.

     Depreciation expense increased $5.2 million in 1996 from 1995 primarily
due to the LM acquisition ($3.3 million) and ABNB acquisition of Grafica
Bradesco and the expansion of the Transaction Cards & Systems's manufacturing
capacity ($2.8 million) partially offset by lower domestic depreciation
expense ($0.9 million).

     Interest expenses increased $5.7 million in 1996 primarily due to debt
incurred to acquire LM ($3.7 million) and to fund the ABNB's expansion of the
Transaction Cards & Systems manufacturing capacity ($1.9 million).

     Foreign translation losses, net is a result of the translation of
Brazilian local currency financial statements into US dollars.

     Other income, net, decreased $3.0 million principally due to the $2.4
million provision related to shareholder litigation (See Note N of "Notes to
Consolidated Financial Statements," and an unrealized loss in marketable
securities ($1.0 million) partially offset by increased interest and other
income.

     Taxes on income (benefit) are calculated using effective tax rates for
each tax jurisdiction and various assumptions such as state and local taxes
and utilization of foreign tax credits.  See Note G of "Notes To Consolidated
Financial Statements."
<PAGE>
<PAGE>
     Minority interest principally represents the ABNB minority interest.

Restructuring

    In 1995, the Company recorded a pre-tax restructuring charge of
approximately $14.3 million pursuant to a restructuring plan developed by
management for the domestic security printing operations and the downsizing
of its corporate offices.  The plan was substantially completed in the second
quarter of 1996.

    The 1995 restructuring charge provided for those reasonably estimable
costs resulting from the plan, including costs that are: (i) associated with
and will not benefit activities that will continue or generate future revenue
and are incremental as a result of the plan; (ii) incurred under contractual
agreements (i.e. leases and employment agreements) that existed prior to the
commitment date that provide no future economic benefit; or (iii) related to
asset impairments and writedowns resulting directly from the plan.  The
Company had estimated the pre-tax annual cost savings would be approximately
$6.5 million, of which approximately $5.3 million were manufacturing related
fixed costs.  The Company began to realize the cost savings in the second
quarter of 1996.  The Company reduced its domestic workforce by about 27% and
provided a $2.9 million reserve for severance and related costs.

     Asset re-valuations and writedowns accounted for $5.0 million of the
1995 charge which reduced certain assets to their net realizable value and
primarily related to leasehold improvements.

     Lease and other facility obligations accounted for $6.4 million of the
1995 charge for facilities closed in 1996.

     The future cash outlays for the remaining restructuring reserve of $2.8
million at December 31, 1997 are anticipated to be $1.3 million in 1998, $1.3
million in 1999 and $0.2 million in 2000.

Liquidity and Capital Resources

     At December 31, 1997, the Company had approximately $17.3 million in
cash and cash equivalents.  In January 1996, ABN and ABNH entered into a
$20.0 million revolving credit facility (the "Credit Facility") for general
working capital and letters of credit purposes. At December 31, 1997, the
Company had approximately $18.5 million of availability under the Credit
Facility before reductions for $3.6 million of outstanding letters of credit
and $3.2 million of borrowings. In addition, Sati had available an unused
working capital revolving credit facility of approximately $1.3 million.  The
Company's long-term debt included $126.5 million of 10-3/8% Senior Notes due
2002 (the "10-3/8% Notes"), $95.0 million of 11-1/4% Senior Subordinated
Notes due 2007 (the "11-1/4% Notes"), $8.0 million of 11-5/8% Senior Notes
due 2002 (the "11-5/8% Notes"), $50.4 million of LM senior and subordinated
non-recourse debt (the "LM debt"), $15.9 million of borrowings in Brazil,
$9.4 million of Sati debt and $7.2 million of other debt. In March 1998, the
$50.4 million of LM debt was refinanced.

     For the year ended December 31, 1997, the Company used cash of $0.7
million from operating activities compared to $7.6 million of cash flow
generated from operating activities in 1996, and a use of cash of $4.5
million in 1995.


<PAGE>
<PAGE>
     Operating cash flows (before changes in operating assets and
liabilities) decreased $1.4 million for 1997 as compared to 1996 principally
as a result of decreased minority interest ($2.2 million) and a decreased
non-cash provision for litigation expense ($2.4 million) partially offset by
increased depreciation and amortization ($1.6 million). Operating cash flows
(before changes in operating assets and liabilities) increased $33.0 million,
in 1996 as compared to 1995, principally as a result of increased earnings
($26.5 million), depreciation and amortization ($6.6 million), and minority
interest charges ($3.7 million), partially offset by decreased non-cash
provisions for restructuring ($14.2 million).  The increase in certain
non-cash charges, such as depreciation and amortization, is due mainly to the
LM and Sati acquisitions and increased capital expenditures in the prior
year.

     Changes in operating assets and liabilities also affected cash flows.
The net decrease in operating cash flows from such changes was $7.0 million
higher in 1997 as compared to 1996 and was primarily due to the increase of
inventories related to the startup of new contracts at LM and at the domestic
subsidiaries, timing differences in the payment of accounts payable and
prepaid expenses, and costs in excess of billings on uncompleted contracts.
The net decrease in operating cash flows from such changes of $20.9 million,
in 1996 as compared to 1995, was principally due to the LM acquisition, as
certain operating assets, principally receivables ($8.5 million), were not
acquired, and to increased levels of receivables and inventory in 1996 ($31.9
million), partially offset by changes in other assets and liabilities.  The
changes in assets and liabilities are due in part to acquisitions and levels
required to support sales and production requirements.

     Investing activities for the years ended December 31, 1997, 1996 and
1995 used net cash flows of $21.8 million, $24.5 million and $6.1 million,
respectively, primarily for capital expenditures of $18.1 million, $22.3
million and $10.4 million, respectively. In 1995, proceeds from the sale of a
joint venture provided $4.7 million of cash. Investing activities for 1997
included $3.8 million for the acquisition of Sati, one of the leading check
and document personalization companies in France, and the acquisition in
Brazil of the leading manufacturer of personalized financial transaction
cards. The reduced level of capital expenditures in the 1997 period reflected
the substantial completion of the expansion of manufacturing capacity in
Brazil.  Capital expenditures in 1997 included $7.2 million for the purchase
of assets related to new contracts for personalized financial documents in
Brazil and Australia and government passports in Australia.

     The significant increase in capital expenditures in 1996 was due to
several programs, including the completion of a three-year program at the
Company's Rio de Janeiro facility, which added significant stored-value card
production capabilities, and the establishment of advanced document printing,
storage and distribution capabilities in its new Sao Paulo facility. The
Company anticipates that capital expenditures in 1998 and 1999 will be
approximately $11 million and $13 million, respectively. These amounts
include approximately $5.0 million in each of 1998 and 1999 that management
estimates will be required for maintenance in addition to capital
expenditures required for new business. Such capital commitments include
amounts that will be financed through operating leases, capital leases and
other financing arrangements.  The portion of capital commitments not
financed through such leases and arrangements will be financed with working
capital and cash flow.


<PAGE>
<PAGE>
     Financing activities for the years ended December 31, 1997, 1996 and
1995 provided net cash flows of $26.0 million, $7.5 million and $3.0 million,
respectively. The activity in 1997, 1996 and 1995 was principally from
borrowings in connection with capital expenditures, as well as refinancing
and repayment of debt. In 1997 and 1996, $2.6 million and $2.9 million
respectively of dividend payments were made to the ABNB minority shareholder.

     Financing activities for 1997 included the net proceeds from the
issuance of $95.0 million of 11-1/4% Notes and related warrants to purchase
shares of Common Stock which were used to redeem $57.0 million of principal
amount of the 11-5/8% Notes.  Financing activities also included the net
proceeds from the issuance of $10.0 million of Convertible Debentures,
increased long-term debt repayments, increased revolving credit borrowings
and a decreased dividend payment to ABNB's minority shareholder.  Financing
activities included the $4.4 million payment of fees and expenses related to
the issuance of the 11-1/4% Notes and $0.5 million of fees and expenses for
the issuance of the Convertible Debentures.  The cash portion of the early
extinguishment of debt charges representing the premium to redeem the 11-5/8%
Notes ($5.4 million) is included in financing activities.

     In the third quarter of 1997, the Company completed the acquisition of
Sati for $11.6 million which was financed with $9.4 million of bank term
loans and $2.2 million of the Company's Common Stock. In addition, the bank
financing included a $1.7 million working capital revolver facility. The term
loans have a term of six to seven years with the working capital revolver
renewable on an annual basis. The loans are priced at PIBOR (Paris Interbank
Offered Rate) plus 2% or approximately 5.3% as of year end. The bank loan
facilities are secured by a pledge of Sati's subsidiaries' stock and an
assignment of receivables. In addition, the facility permits the distribution
of dividends of up to 25% of excess cash flow, as defined.

     In the fourth quarter of 1997, the sale of $95 million of 11-1/4% Notes
and warrants in a private placement was completed, the proceeds of which were
used to refinance approximately $57.0 million of the principal amount of the
Company's 11-5/8% Notes due 2002, provide funds for several acquisitions and
for general corporate purposes.  The 11-1/4% Notes mature on December 1,
2007, have no sinking fund requirements and are not callable until December
2002. The 11-1/4% Notes are unsecured obligations of the Company and are
subordinated in right of payment to all existing and future senior
indebtedness of the Company (as defined). In connection with the sale of the
11-1/4% Notes, warrants to purchase 1,185,790 shares of the Company's Common
Stock at $5.50 per share were issued.


<PAGE>
<PAGE>
Recent Developments

     In March 1998, the refinancing of the LM debt was completed. The new
bank facilities include a five-year $55.3 million amortizing revolving credit
facility and a five-year $3.3 million letter of credit facility. The
revolving credit facility expires in March 2003 with semi-annual commitment
step downs and is initially priced at the bank bill rate plus 1.75%, or
approximately 6.6% at December 31, 1997. The bank facilities are secured by
substantially all of LM's assets and the capital stock of the subsidiaries.
The bank facility permits the distribution of dividends of up to 50% of free
cash flow (as defined) which would have been approximately $1.6 million on a
proforma basis under the terms of the facility in 1997. The facility
agreement requires that 75% of the borrowings be hedged for interest rate
risk. In addition, the new facility will extend the current bank maturities
from 2001 to 2003 and will reduce amortization requirements in 1998 and 1999
when compared to the prior bank facility's amortization schedule.

     In March 1998, the Company, through a subsidiary of Sati, completed the
acquisition of MCE S.A. (Monetique Cheque Edit) and CPS S.A. (CPS
Technologies) for $3.3 million plus the refinancing of $1.8 million of
outstanding bank debt.  MCE personalizes bank checks and documents and CPS
personalizes transaction and plastic cards for the French market.  The
acquisition and refinancing of outstanding bank debt was financed with $3.5
million of bank term loans and $1.6 million from the Company in the form of
$1 million in cash and $0.6 million in Common Stock of the Company.  In
addition, the bank financing included a $0.8 million working capital
revolving credit facility.  The term loans have a term of six to seven years
with the working capital revolver renewable on an annual basis.  The loans
are priced at PIBOR plus 2% with the pledge of MCE and CPS stock and a
guarantee of the subsidiary that acquired MCE and CPS securing the bank
facilities.

     In October 1998, the current three-year $20 million Credit Facility will
mature. The Company intends to refinance this revolving credit facility with
a new three to five year facility.  Management believes that it will be able
to accomplish the refinancing of the Credit Facility prior to its maturity.

     For the year ended December 31, 1997, the Company had made all required
interest payments and was in compliance with its financing agreements.
Certain financing agreements contain covenants which restrict the Company
from incurring additional indebtedness without consent; however, borrowings
under certain bank borrowing agreements, lease financings in the normal
course of business, intercompany indebtedness and other obligations entered
into in the ordinary course of business are permitted.  Additionally, the
Company and its subsidiaries are restricted from declaring or paying a cash
dividend or making any distributions on its capital stock, purchasing or
redeeming any equity interests or making investments, with certain
exceptions.

     The Company and its subsidiaries are highly leveraged.  At December 31,
1997, total consolidated long-term debt, excluding the current portion ($17.9
million), was approximately $293.2 million (representing approximately 84% of
total capitalization).


<PAGE>
<PAGE>
     The high level of the Company's indebtedness poses certain risks,
including the risk that the Company might not generate sufficient cash flow
to service its obligations and the risk that the Company's capacity to
respond to market conditions, extraordinary capital needs and other factors
could be adversely affected.  The Company's ability to service its debt
depends upon the future performance of the Company's subsidiaries, which will
be subject to prevailing economic and competitive conditions and to other
factors, including the ability to generate cash at the Company's operating
subsidiaries, to distribute that cash to the Company for debt service and to
repatriate funds from foreign subsidiaries, particularly ABNB.  Other future
acquisitions and joint ventures in which the Company does not maintain 100%
ownership, foreign legal and tax requirements, the terms of acquisition debt
incurred or incurred in the future may further restrict the ability of newly
acquired subsidiaries and joint venture investments to declare and pay
dividends or make distributions.

    The Company expects to refinance the 11-1/4% Notes, 10-3/8% Notes and the
remaining 11-5/8% Notes at or before their respective maturities; however, no
assurance can be given as to the Company's ability to refinance such
obligations, that the Company's revolving credit facility will be available
when required or that prevailing interest rates will be advantageous to the
Company.  In the event that the Company is unable to refinance its
indebtedness as it matures or raise funds through asset sales, sales of
equity or otherwise, its ability to pay principal of or the interest on the
10-3/8% Notes, the 11-1/4% Notes, and the remaining 11-5/8% Notes and other
long-term indebtedness of the Company would be adversely affected.

     Management of the Company believes that cash flows from operations
together with cash balances, availability of funds under its and its
subsidiaries' credit facilities and proceeds from asset sales will be
sufficient to service debt and fund capital expenditures for the next twelve
months. The Company also believes that it and its subsidiaries possess
sufficient unused debt capacity and access to debt and equity markets to
pursue additional acquisition opportunities and meet extraordinary working
capital needs as they arise.

Tax Law Changes

     As a result of Brazilian tax legislation, effective for 1996, the 15%
dividend withholding tax on earnings after 1995 was eliminated. Additionally,
in 1996, tax legislation which permitted Brazilian companies to elect to
deduct dividends in computing taxable income, subject to certain limitations,
also provided for a 15% withholding tax on dividends distributed in this
manner. The statutory tax rate in Brazil is approximately 33%.

Accounting Pronouncements

     The Company anticipates that the 1998 adoption of recently issued
accounting standards, as discussed in Note A, will not have a material impact
on the Company's financial statements.

     During 1997, the Securities and Exchange Commission issued new
disclosure rules related to derivatives and exposures to market risk from
derivative financial instruments, other financial instruments, and certain
derivative commodity instruments.  The Company is currently evaluating these
disclosure requirements which are required to be presented in annual reports
for years ending after June 15, 1998.


<PAGE>
<PAGE>
Impact of Inflation

    In 1994, the Brazilian government introduced a new currency as part of
the government's economic stabilization program designed to reduce the
country's hyper-inflation. As a result of this program, the inflation rate
has decreased substantially to approximately 4.5% for 1997, 10% for 1996 and
23% for 1995 as compared to 941% for 1994. The Company translates ABNB's
financial statements as if ABNB were operating in a hyperinflationary
economy.  Currently, gains and losses resulting from translation and
transactions are determined using a combination of current and historical
rates and are reflected in earnings.  Effective January 1, 1998, the method
of translating ABNB's financial statements will be changed to reflect gains
and losses as a separate component of equity. The effect of the change will
reduce stockholders' equity by approximately $1.7 million with a
corresponding credit to deferred taxes.  The Company's domestic, Australian,
New Zealand and French operations are not significantly affected by
inflation. ABNB's sales represented 42% and 53% of consolidated sales in 1997
and 1996, respectively.

Foreign Operations

     The Company's foreign exchange exposure policy generally calls for
selling its domestic manufactured product in US dollars and, in the case of
LM, ABNB and Sati, selling in their national currencies, in order to minimize
transactions occurring in currencies other than those of the originating
country.  The Company has, from time to time, entered into foreign currency
option contracts to limit the effect of currency fluctuations on future
expected cash receipts from Brazil which are used for general parent company
purposes, including debt service.  The options generally have covered periods
from two to four months from the date of purchase. In addition, the Company
has established restricted investment accounts which are controlled by the
parent, and in the case of ABNB, have funds which are from time to time
invested in US$-indexed money market investments. Such activities may be
discontinued at any time depending on, among other things, management's views
concerning future exchange rates and the cost of such contracts.  The Company
has not engaged in material hedging activities.  Currently, repatriation of
earnings from ABNB is permitted, subject to certain approvals.  Dividends or
distributions from Brazil could be subject to government restrictions in the
future.  In 1997 and 1996, the Company received $8.9 million and $9.9
million, respectively, in dividends from ABNB.

     Earnings on foreign investments, including operations and earnings of
foreign companies in which the Company may invest or rely upon for sales, are
generally subject to a number of risks, including high rates of inflation,
currency exchange rate fluctuations, trade barriers, exchange controls,
government expropriation and political instability and other risks.  These
factors may affect the results of operations in selected markets included in
the Company's growth strategy, such as in Latin America and Asia.  The
Company's financial performance on a dollar-denominated basis can be
significantly affected by changes in currency exchange rates and inflation.
The Company's cash balances and borrowings in foreign currency can mitigate
the effects of fluctuating currency exchange rates; however, borrowings and
investments in foreign currency and markets may not be available or practical
and may face local interest rate and principal risks.  In addition, adverse
changes in foreign interest and exchange rates could adversely affect the
Company's ability to meet its interest and principal obligations as well as
applicable financial covenants with respect to its dollar-denominated debt,
including the 11-1/4% Notes, the 10-3/8% Notes, the remaining 11-5/8% Notes
and other indebtedness of the Company.
<PAGE>
<PAGE>
     See Notes A and M of "Notes to Consolidated Financial Statements" for
the disclosure of certain financial information relating to foreign
operations.

    The Company has from time to time reorganized and restructured, and may
in the future reorganize and restructure, its foreign operations based on
certain assumptions about the various tax laws (including capital gains and
withholding tax), foreign currency exchange and capital repatriation laws and
other relevant laws of a variety of foreign jurisdictions.  While management
believes that such assumptions are correct, there can be no assurance  that
foreign taxing or other authorities will reach the same conclusion.  If such
assumptions are incorrect, or if such foreign jurisdictions were to change or
modify such laws, the Company may suffer adverse tax and other financial
consequences which could impair the Company's ability to meet its payment
obligations on the 11-1/4% Notes, 10-3/8% Notes, the remaining 11-5/8% Notes
and other indebtedness of the Company.

YEAR 2000 ISSUE

     The Year 2000 issue involves the risk that computer systems using
two-digit date fields will fail to properly recognize the Year 2000,
resulting in computer system failures for businesses, government agencies,
service providers, vendors and customers.  The Company has formed a
cross-functional task force for assessing the Company's Year 2000 readiness.
The task force has developed a plan to assess the Company's Year 2000 risk
and is in the process of performing its review.  The Company has initiated
discussions with its key suppliers and customers to determine whether they
have any Year 2000 issues which could impact the Company.

     The Company anticipates that certain software will require replacement
or modification.  However, based on its review to date, the Company does not
expect the cost of software replacement or modification to be material to its
financial position or results of operations.  Estimates of the related costs
are based on assumptions, including the continued availability of certain
resources, the ability to correct all relevant applications and third party
modification plans.  There is no guarantee that the estimates will be
achieved and actual costs could differ materially from those anticipated.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     Certain statements in this Form 10-K, under the captions, "The
Company," "Business," and "Management Discussion and Analysis of
Financial Condition and Results of Operations" and in certain documents
incorporated by reference herein constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 (the "Reform Act").  Such forward-looking statements
involve unknown and uncertain risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the
Company, or industry results, to be materially different from any
future results, performance, or achievements expressed or implied by
such forward-looking statements.  Such factors include, among others,
the following: general economic, political, market and business
conditions, which may, among other things, affect demand for the
Company's products; economic conditions, inflation and currency
exchange rates in those foreign countries in which the Company
generates a large portion of its sales and earnings (including Brazil, 
<PAGE>
<PAGE>
Australia and France, which accounted for approximately 42%, 24% and
3%, respectively, of sales and approximately 41%, 26% and 1%,
respectively, of operating earnings, respectively, in 1997 before
allocation of corporate overhead) which may, among other things, affect
the Company's ability to service its debt; new product development and
technological advances which may, among other things, affect the
Company's printing business and certain government contract
performance; new plant and contract start-up conditions which may,
among other things, affect the profitability of the Company's
operations; seasonality; competition; changes in business strategy or
expansion plans; raw material costs and availability; customer
inventory levels; the loss of any of the Company's significant
customers; the ability to achieve anticipated cost reductions and
synergies; the possibility of unsuccessful bids for government
contracts; changes in, or the failure of the Company to comply with,
government regulations, bid requirements or product specifications; and
other factors referenced in this Report.  The Company's stock and bond
business is also subject to certain risks, such as the trend towards
shorter settlement cycles and book entry ownership, which may impact
future results.  The complete elimination of or substantial reduction
in the domestic use of certificates or changes in NYSE requirements
would have a material adverse effect on the sales and earnings of the
Company.

    The future results of the Company's food coupon printing is subject
to the acceptance and implementation of electronic card-based systems.
Benefit reforms and high levels of food coupon inventory, will continue
to impact the Company's results.  The USDA is promoting the nationwide
issuance of electronic card-based food coupon benefits and by 1998,
approximately one-half of the states had begun implementation or had
awarded contracts for these type of systems.

     Transaction Cards & Systems is subject to certain risks which may
impact future results including continued consumer acceptance and rate
of conversion of coin based telephones and other devices to card
systems.  In Brazil, stored-value telephone card sales volume is
expected to be lower in 1998 due to these factors and customer
inventory levels.  Other forward looking risks affecting the Company's
business are as described in filings with the Securities and Exchange
Commission under the Securities Exchange Act of 1934.  Given these
uncertainties, prospective investors are cautioned not to place undue
reliance on such forward-looking statements.


<PAGE>
<PAGE>
ITEM 8.  Financial Statements and Supplementary Data

     The following consolidated financial statements of the Company and its
subsidiaries are set forth herein:

     Independent Auditors' Report

     Consolidated Statements of Operations - Years Ended
       December 31, 1997, 1996 and 1995

     Consolidated Balance Sheets - December 31, 1997 and 1996

     Consolidated Statements of Stockholders' Equity - Years Ended
       December 31, 1997, 1996 and 1995

     Consolidated Statements of Cash Flows - Years Ended
       December 31, 1997, 1996 and 1995

     Notes to Consolidated Financial Statements

SCHEDULE
     Schedule I - Condensed Financial Information of Registrant
                  For the Year Ended December 31, 1997
<PAGE>
<PAGE>


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
American Banknote Corporation
New York, New York

     We have audited the accompanying consolidated balance sheets of American
Banknote Corporation and subsidiaries as of December 31, 1997 and 1996, and
the related consolidated statements of operations, stockholders' equity and
cash flows for each of the three years in the period ended December 31, 1997.
Our audit also included the consolidated financial statement schedule listed
in Item 14.   These consolidated financial statements and financial statement
schedule are the responsibility of the Company's management.  Our
responsibility is to express an opinion on the consolidated financial
statements based on our audits.

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

     In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of American Banknote
Corporation and subsidiaries as of December 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1997 in conformity with generally accepted
accounting principles.  Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial
statement taken as a whole, present fairly in all material aspects, the
information set forth therein.




DELOITTE & TOUCHE  LLP
March 17, 1998
New York, New York
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
                                                    Year Ended December 31
                                                 1997        1996        1995
<S>                                           <C>         <C>         <C>
Sales . . . . . . . . . . . . . . . . . .     $ 336,359   $ 309,450   $ 206,164

Costs and expenses:
  Cost of goods sold. . . . . . . . . . .       229,812     202,158     149,035
  Selling and administrative. . . . . . .        45,662      48,263      39,851
  Restructuring and idle equipment. . . .                                14,304
  Depreciation and amortization . . . . .        22,937      20,042      14,824
                                                298,411     270,463     218,014

                                                 37,948      38,987     (11,850)

Other (expense) income:
  Interest expense. . . . . . . . . . . .       (32,762)    (28,864)    (23,147)
  Foreign translation losses, net . . . .          (130)       (255)        (38)
  Other, net. . . . . . . . . . . . . . .           342        (135)      2,824
                                                (32,550)    (29,254)    (20,361)
    Income (loss) before taxes on income
      (benefit) and minority interest . .         5,398       9,733     (32,211)

Taxes on income (benefit). .  . . . . . .        (1,435)        400     (11,359)

    Income (loss) before
      minority interest . . . . . . . . .         6,833       9,333     (20,852)

Minority interest . . . . . . . . . . . .         2,993       5,234       1,563

    Income (loss) before
      extraordinary item. . . . . . . . .         3,840       4,099     (22,415)

Extraordinary item - early
    extinguishment of debt. . . . . . . .        (5,589)

     Net income (loss). . . . . . . . . .     $  (1,749)  $   4,099   $ (22,415)


Net income (loss) per common share - Basic:
    Before extraordinary item . . . . . .     $    0.18   $    0.21   $   (1.17)
    Extraordinary item. . . . . . . . . .         (0.28)
                                              $   (0.10)  $    0.21   $   (1.17)

Net income (loss) per common share - Diluted:
    Before extraordinary item . . . . . .     $    0.18   $    0.20   $   (1.17)
    Extraordinary item. . . . . . . . . .         (0.27)
                                              $   (0.09)  $    0.20   $   (1.17)

</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
                                                                December 31
                                                             1997         1996
<S>                                                        <C>          <C>
ASSETS
Current assets
  Cash and cash equivalents . . . . . . . . . . . . . .    $ 17,323     $ 14,256
  Marketable securities -at market (cost $1,746). . . .                    2,133
  Accounts receivable, net of allowance for
    doubtful accounts of $986 and $981. . . . . . . . .      57,422       46,611
  Costs in excess of billings, of $2,848 in 1997,
    on uncompleted contracts. . . . . . . . . . . . . .       5,442          890
  Inventories . . . . . . . . . . . . . . . . . . . . .      41,686       35,622
  Deferred income taxes . . . . . . . . . . . . . . . .       3,046        4,261
  Prepaid expenses and other  . . . . . . . . . . . . .      11,371        9,362
                   Total current assets . . . . . . . .     136,290      113,135

Property, plant and equipment, at cost, net of
  accumulated depreciation and amortization . . . . . .     258,724      253,987

Other assets. . . . . . . . . . . . . . . . . . . . . .      25,918       27,974

Excess of cost of investment in subsidiaries
  over net assets acquired, net of accumulated
  amortization of $8,863 and $5,662 . . . . . . . . . .      82,604       85,282
                                                           $503,536     $480,378
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Revolving credit facilities . . . . . . . . . . . . .     $ 7,523     $  3,103
  Current portion of long-term debt . . . . . . . . . .      17,886       14,450
  Accounts payable and accrued expenses . . . . . . . .      54,761       60,049
                   Total current liabilities. . . . . .      80,170       77,602

Long-term debt . . . . . . . .  . . . . . . . . . . . .     293,215      263,548

Other liabilities . . . . . . . . . . . . . . . . . . .      21,466       24,706

Deferred income taxes . . . . . . . . . . . . . . . . .      32,808       47,456

Minority interest . . . . . . . . . . . . . . . . . . .      20,836       20,789
                                                            448,495      434,101
Commitments and Contingencies

Stockholders' equity
  Preferred Stock, authorized 5,000,000 shares,
    no shares issued or outstanding
  Zero Coupon Convertible Subordinated Debentures . . .       8,326
  Common Stock, par value $.01 per share,
    authorized 50,000,000 shares; issued 21,134,769
    shares and 20,137,880 shares. . . . . . . . . . . .         211          202
  Capital surplus . . . . . . . . . . . . . . . . . . .      74,713       68,609
  Retained-earnings (deficit) . . . . . . . . . . . . .     (23,282)     (21,362)
  Treasury stock, at cost (281,000 shares). . . . . . .      (1,253)      (1,253)
  Cumulative currency translation adjustment. . . . . .      (3,674)          81
                   Total stockholders' equity . . . . .      55,041       46,277
                                                           $503,536     $480,378
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
THREE YEARS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>

                       Zero
                      Coupon                                                         Cumulative
                    Subordinate                           Retained          Pension   Currency
                    Convertible  Common Stock    Capital  Earnings   Treas.  Liabil. Translation
                     Debentures   Shares Amount  Surplus  (Deficit)  Stock   Adjust.   Adjust.   Total
                                                     (Amounts in thousands)
<S>                     <C>       <C>     <C>    <C>      <C>       <C>       <C>    <C>       <C>
Balance -
 January 1, 1995. . .             19,290  $ 193  $66,883  $ (3,046) $(1,253)                   $62,777

Issuance in
  connection with
  option plans. . . .                102      1      208                                           209
Pension liability
  adjustment. . . . .                                                         $(218)              (218)
Net loss. . . . . . .                                      (22,415)                            (22,415)
Balance -
 December 31, 1995. .             19,392    194   67,091   (25,461)  (1,253)   (218)            40,353
Issuance of common
  shares in
  connection with
  acquisitions. . . .                427      5      825                                           830
Issuance in
  connection with
  option and
  compensation plans.                319      3      693                                           696
Foreign currency
  translation
  adjustment . . . .                                                                    $ 81        81
Pension liability
  adjustment. . . . .                                                           218                218
Net income. . . . . .             ______          ______     4,099   ______   _____              4,099
Balance -
 December 31, 1996. .             20,138    202   68,609   (21,362)  (1,253)              81    46,277

Issuance in
  connection with
  an acquisition. . .                423      4    2,130                                         2,134
Issuance in
  connection with
  option and
  compensation plans .               349      3    1,381                                         1,384
Issuance of zero
  coupon
  subordinated
  convertible
  debentures. . . . .   $9,055                       495                                         9,550
Imputed interest on
  zero coupon
  debentures. . . . .      171                                (171)
Conversion of
  zero coupon
  debentures. . . . .     (900)      225      2      898
Issuance of 1997
  Warrant . . . . . .                              1,200                                         1,200
Foreign currency
  translation
  adjustment                                                                          (3,755)   (3,755)
Net (loss). . . . . .                                       (1,749)                             (1,749)
Balance -
 December 31, 1997      $8,326    21,135  $ 211  $74,713  $(23,282) $(1,253)  $   -  $(3,674)  $55,041

</TABLE>

See Notes to Consolidated Financial Statements.

<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                     Year Ended December 31
                                                           (in thousands)
                                                   1997       1996       1995
<S>                                              <C>        <C>        <C>
Operating Activities:
  Income (loss) before extraordinary item. . . . $  3,840   $  4,099   $(22,415)
  Adjustments to reconcile income (loss) to
     net cash provided by operating activities:
  Depreciation and amortization. . . . . . . . .   25,909     24,326     17,742
  Unrealized loss (gain) on
    marketable securities. . . . . . . . . . . .      (45)       819     (1,061)
  Deferred taxes . . . . . . . . . . . . . . . .   (7,776)   (10,667)   (16,650)
  Minority interest. . . . . . . . . . . . . . .    2,993      5,234      1,563
  Provision for litigation . . . . . . . . . . .               2,400
  Restructuring and idle equipment . . . . . . .                         14,223
  Foreign translation losses, net. . . . . . . .      111        255         38
  Changes in operating assets and liabilities,
     net of effects from acquisitions:
     Marketable securities . . . . . . . . . . .    2,144                (1,253)
     Accounts receivable . . . . . . . . . . . .   (6,152)   (15,203)    10,501
     Inventories . . . . . . . . . . . . . . . .   (8,171)    (3,534)     1,734
     Costs in excess of billing on
       uncompleted contracts . . . . . . . . . .   (4,552)      (890)
     Prepaid expenses and other. . . . . . . . .   (2,563)     1,250     (7,466)
     Accounts payable and accrued expenses . . .   (5,591)      (788)    (3,839)
     Other . . . . . . . . . . . . . . . . . . .     (894)       337      2,432
Net cash (used in) provided by
  operating activities . . . . . . . . . . . . .     (747)     7,638     (4,451)
Investing Activities:
  Acquisitions of subsidiaries . . . . . . . . .   (3,841)    (2,491)
  Capital expenditures . . . . . . . . . . . . .  (18,063)   (22,283)   (10,378)
  Proceeds from sale of joint venture. . . . . .                          4,718
  Proceeds from sale of assets . . . . . . . . .      820        699        211
  Other  . . . . . . . . . . . . . . . . . . . .     (717)      (385)      (650)
Net cash used in investing activities. . . . . .  (21,801)   (24,460)    (6,099)

Financing Activities:
  Other long-term borrowings . . . . . . . . . .               8,342      3,415
  Revolving credit facilities, net . . . . . . .    4,420      3,103
  Payment of long-term debt. . . . . . . . . . .  (14,310)    (1,076)      (451)
  Proceeds from zero coupon subordinated
    convertible debentures (net of related
      expenses of $450). . . . . . . . . . . . .    9,550
  Proceeds from financing:
    11-1/4% Senior Subordinated Notes, (net
      of related expenses $4,389). . . . . . . .   89,411
    Warrants . . . . . . . . . . . . . . . . . .    1,200
  Redemption of 11 5/8% Notes . . .  . . . . . .  (62,417)
  Dividend to minority shareholder . . . . . . .   (2,587)    (2,867)
  Other. . . . . . . . . . . . . . . . . . . . .      718                    20
Net cash provided by financing activities. . . .   25,985      7,502      2,984
Effect of foreign currency exchange rate
   changes on cash and cash equivalents. . . . .     (370)        51       (567)
Increase (Decrease) in cash and cash equivalents    3,067     (9,269)    (8,133)
Cash and cash equivalents - beginning of year. .   14,256     23,525     31,658
Cash and cash equivalents - end of year  . . . . $ 17,323   $ 14,256   $ 23,525

Supplemental cash payments:
  Taxes. . . . . . . . . . . . . . . . . . . . . $  6,472   $  9,490   $  3,680
  Interest . . . . . . . . . . . . . . . . . . . $ 32,588   $ 27,130   $ 21,857
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A - Basis of Presentation and Summary of Significant Accounting Policies

American Banknote Corporation is a holding company (the "Company") and through
its subsidiaries in the United States, Brazil, Australia, New Zealand and
France, operates in a single industry, secured products and systems, with
three principal product lines: Transaction Cards & Systems; Printing Services
& Document  Management; and Security Printing Solutions.  The Company's
principal subsidiaries are: American Bank Note Company ("ABN"), American Bank
Note Holographics, Inc. ("ABNH"), American Bank Note Company Grafica e
Servicos Ltda. ("ABNB"), a 77.5% owned Brazilian company, American Banknote
Australasia Holdings, Inc. ("ABAH"), its Australian subsidiary, ABN
Australasia Limited ("LM") and Sati Holdings SA ("Sati"), its French
subsidiary.

1.  Principles of Consolidation:  The accompanying consolidated financial
statements include the accounts of the Company and its subsidiaries. All
significant intercompany items have been eliminated.  Certain
reclassifications have been made to the 1996 and 1995 balances to conform to
the 1997 presentation.

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

3.  Translation of Financial Statements: The results of the ABN's foreign
operations other than ABNB are translated into US dollars using average
exchange rates during the period, while assets and liabilities are translated
using current rates.  Resulting translation adjustments are accumulated as a
separate component of stockholders' equity.  Foreign currency transaction
gains and losses are included in earnings. Through December 31, 1997, ABNB
operated in a hyper-inflationary economy, and gains and losses for ABNB
resulting from translation and transactions were determined using a
combination of current and historical rates.  Effective January 1, 1998, as a
result of continued decreased inflation rates in Brazil, the method of
translating ABNB's financial statements will be changed to reflect gains and
losses as a separate component of stockholders' equity.  The effect of this
change will be to reduce stockholders' equity by approximately $1.7 million,
with a corresponding credit to deferred income taxes.

4.  Cash and Cash Equivalents: All highly liquid investments with a maturity
of three months or less, when purchased, are considered to be cash
equivalents.


<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.  Marketable Securities: Such investments are held for trading purposes and
changes in the market value are reflected in earnings.

6.  Inventories and Revenue Recognition:  Inventories are stated at the lower
of cost or market, cost being determined on the first-in, first-out (FIFO)
method.  Revenue is generally recognized when goods are shipped.  However,
pursuant to terms with certain customers, completed items are sometimes stored
at the Company's premises and, in those instances, revenue is recognized when
the goods are transferred to the on-site secured facility.  At December 31,
1997 and 1996, accounts receivable from these customers totaled $7.8 million
and $1.1 million, respectively.  Additionally, certain contracts are accounted
for by the percentage of completion method.

7.  Depreciation and Amortization:  Depreciation and amortization of property,
plant and equipment is computed principally by the straight-line method over
the estimated useful life of the asset as follows: buildings - 25 to 40 years;
rolls and dies - 40 years; and machinery, equipment and fixtures - 5 to 22
years.

Amortization of leasehold improvements is computed by the straight-line method
based upon the remaining term of the applicable lease or the estimated useful
life of the asset, whichever is shorter.

8.  Intangible Assets:  Patents and other intangibles are amortized over their
useful lives.  The excess of cost of investment in subsidiaries over net
assets acquired is amortized over periods ranging from 20 to 30 years using
the straight-line method.

9.  Long-Lived Assets:  The Company reviews its long-lived assets for
impairment when changes in circumstances indicate that the carrying amount of
an asset may not be recoverable.  Assets to be disposed of and assets not
expected to provide any future service potential to the Company are recorded
at the lower of carrying amount of fair value less cost to sell.

10.  Research and Development:  Research and development costs are expensed as
incurred (1997 - $0.7 million, 1996 - $0.9 million and 1995 - $0.4 million).

11.  Net Income (Loss) Per Share:  In the fourth quarter of 1997, the Company
adopted Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share."  All prior period earnings per share data have been
restated to conform to the provisions of this statement.
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The computation of basic and diluted income (loss) per share follows:
<TABLE>
<CAPTION>
                                                          1997     1996      1995
                                                              (in thousands)
  <S>                                                    <C>      <C>       <C>
  Income (loss)before extraordinary items. . . .         $ 3,840  $ 4,099   $(22,415)
  Accretion of zero coupon subordinated
    convertible debentures . . . . . . . . . . .            (171)       -          -
  Numerator for basic and diluted income per common share
    Income (loss) attributable to common
    stockholders before extraordinary item . . .         $ 3,669  $ 4,099   $(22,415)
  Denominator for basic income (loss) per common share:
    Weighted-average shares. . . . . . . . . . .          20,140   19,650     19,200
    Effect of dilutive employee stock
    options and non-vested share issuances . . .             660      520          -
  Denominator for diluted income (loss) per share-
    weighted-average shares and assumed conversions       20,800   20,170     19,200
</TABLE>
The 1997 denominator for computing diluted income per share excludes
approximately 3.8 million shares of Common Stock that are reserved for the
exercise of warrants to purchase approximately 1.6 million shares of Common
Stock, conversion of zero coupon subordinated convertible debentures into
approximately 1.9 million shares of Common Stock and the exercise of
approximately 0.3 million stock options.  The 1996 and 1995 denominator for
computing diluted income per share excludes approximately 0.1 million shares
and 1.9 million shares of Common Stock, respectively, that are reserved for
the exercise of stock options and warrants. The exercise or conversion prices
of these securities is greater than the average market price of the common
shares and their inclusion would be antidilutive to diluted income per share.

12.  Business Information:  Sales to the United States government (principally
food coupons) were 7%, 7% and 15% of consolidated sales for the years ended
December 31, 1997, 1996 and 1995, respectively.  Sales to a customer in Brazil
(national telephone company) were 11%, 24% and 13% of consolidated sales for
the years ended December 31, 1997, 1996 and 1995, respectively.  Sales to the
ABNB minority owner were 12%, 14% and 12% of consolidated sales in 1997, 1996
and 1995, respectively.

Stock and bond printing accounted for approximately 7%, 8% and 11% of
consolidated sales for the years ended December 31, 1997, 1996 and 1995,
respectively.  The elimination of printed certificates continues to be
advocated by various organizations in favor of the use of book-entry systems
for recording security ownership. The complete elimination of or substantial
reduction in the domestic use of certificates or NYSE requirements would have
a material adverse effect on the sales and earnings of the Company.

Government sales, particularly to the United States government and state and
local governments, is principally dependent on successful competitive bids
which are generally awarded on the basis of price but may also include other
factors.  Many of the Company's contracts are re-bid annually or on a multiple
year basis.  Government sales are generally subject to provisions allowing
termination for the convenience of the government.
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The future results of the Company's food coupon printing is subject to the
acceptance and implementation of electronic card-based systems.  Benefit
reforms and high levels of food coupon inventory, will continue to impact the
Company's results.  The USDA is promoting the nationwide issuance of
electronic card-based food coupon benefits and by 1997, approximately one-half
of the states had begun implementation or had awarded contracts for these type
of systems.

13.  Supplemental Cash Flow Information:  In 1997, shares of Common Stock were
issued or reserved as follows:  423,098 shares were issued in connection with
the Sati acquisition (valued at approximately $2.1 million); 224,688 shares
were issued upon conversion of $1.0 million principal amount of zero coupon
subordinate convertible debentures; and 164,000 shares were issued and
reserved in connection with compensation plans for employees and directors
(valued at approximately $0.7 million).  In addition, in 1997 in connection
with the acquisition of property, plant and equipment, approximately $2.5
million of  seller financing was assumed.  In 1996, 426,617 shares Common
Stock were issued in connection with acquisitions (valued at approximately
$0.8 million and 483,500 shares of Common Stock were issued and reserved in
connection with compensation plans for employees and directors (valued at
approximately $0.7 million).  In addition, in 1996, the Company entered into a
contract payable in connection with the LM acquisition in the face amount of
$4.8 million.  In 1995, 97,725 shares of Common Stock were issued and reserved
in connection with compensation plans for employees and directors (valued at
approximately $0.2 million).  In addition, in 1995 ABNB acquired the security
printing operations of Grafica Bradesco Ltda. ("Grafica Bradesco"), from Banco
Bradesco, S.A., in exchange for 22.5% interest in ABNB.

14.  Export Sales:  US export sales were 5%,6% and 7% of consolidated sales
for the years ended December 31, 1997, 1996 and 1995, respectively.

15.  Foreign Currency Options   The Company periodically enters into foreign
currency options in order to hedge dividends denominated in foreign currency.
The purpose of the foreign currency hedging activities is to protect the
Company from the risk of devaluation of expected dollar cash flows of
dividends from ABNB.  Generally, gains or losses on an option are deferred
until the option expires or is exercised, at which time it is included in the
amount of the underlying transaction.

16.  Impact of Accounting Pronouncements:  SFAS No. 129, "Disclosure of
Information about Capital Structure," issued in February 1997 is effective for
periods ending after December 15, 1997 and establishes standards for
disclosing information about an entity's capital structure by superseding and
consolidating previously issued accounting standards.  The financial
statements of the Company are prepared in accordance with the requirements of
SFAS No. 129.

SFAS No. 130, "Reporting Comprehensive Income," issued in June 1997, is
effective for fiscal years beginning after December 15, 1997 and requires
presentation of total nonowner changes in equity for all periods displayed.
The Company plans to adopt this statement for the year ending December 31,
1998, and is evaluating alternative disclosure formats suggested by the
standard.
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," issued in June 1997 is required to be adopted effective December
31, 1998. SFAS No. 131 requires, among other things, that financial and
descriptive information be provided about its reportable operating segments.
Under this statement operating segments are components of an enterprise about
which separate financial information is available that is regularly evaluated
by the enterprise's chief operating decision-maker in deciding how to allocate
resources and in assessing performance.  The Company continues to evaluate the
effects, if any, of the adoption of the new standard.

SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits," issued in February 1998, is effective for periods beginning after
December 15, 1997.  The Company is currently evaluating the required
disclosures under this new standard.

The AICPA Accounting Standards Executive Committee issued in October 1996,
Statement of Position 96-1, "Environmental Remediation Liabilities.,"  The
adoption of this pronouncement in 1997 did not have a material effect on the
Company's financial condition and results of operations.

Note B - Acquisitions

In 1996, in a two step transaction, the Company acquired a 100% equity
interest in LM.  As of May 1, 1997, the Company acquired the plastic cards
division of a company in Brazil, Menno Equipamentos para Escritorio Ltda.
("Menno"), and on August 26, 1997 acquired a 100% equity interest in Sati.
The total purchase price and the net assets acquired in these acquisitions in
1997 and 1996 follow (in thousands):
                                                       1997        1996
  Net working capital (deficiency) . . . . . . .     $ 1,393     $ (2,124)
  Property, plant and equipment. . . . . . . . .       8,743       23,488
  Excess of cost of investment over
    net assets acquired. . . . . . . . . . . . .       8,669       52,885
  Other long-term assets . . . . . . . . . . . .       2,425        3,914
  Deferred debt expense. . . . . . . . . . . . .         477        3,273
  Long-term liabilities. . . . . . . . . . . . .        (419)      (2,239)
     Net purchase prices . . . . . . . . . . . .      21,288       79,197
  Common Stock issued. . . . . . . . . . . . . .      (2,134)
  Acquisition financings . . . . . . . . . . . .     (15,313)     (76,706)
     Net cash cost of acquisitions . . . . . . .     $ 3,841      $ 2,491

On an unaudited pro-forma basis, assuming the above acquisitions had been made
as of January 1, 1996, consolidated sales for the years ended December 31,
1997 and 1996 would have increased by approximately $16.0 million and $69.3
million, respectively, and net income would have increased by approximately
$0.2 million ($.01 per basic and diluted share) and $1.1 million ($.05 per
basic and diluted share), respectively.

The above transactions were accounted under the purchase method.  The Company
believes the unaudited pro-forma results are not necessarily indicative of the
actual results of operations that would have occurred had the acquisitions
been made as of January 1, 1996 or of the results which will occur in the
future.  The results of operations of the acquired entities are consolidated
in the Company's financial statements from the respective acquisition dates,
except for Sati, which is as of August 1, 1997.
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note C - Inventories
                                                        December 31
                                                       1997         1996
                                                       (in thousands)
   Finished goods. . . . . . . . . . . . .          $  6,454     $  6,288
   Work-in-process . . . . . . . . . . . .            17,356       14,905
   Raw material and supplies . . . . . . .            17,876       14,429
                                                    $ 41,686     $ 35,622

Note D - Property, Plant and Equipment
                                                        December 31
                                                      1997        1996
                                                        (in thousands)
   Land. . . . . . . . . . . . . . . . . .          $  3,612     $  2,852
   Buildings and improvements. . . . . . .            28,408       25,861
   Rolls and dies. . . . . . . . . . . . .           173,557      174,037
   Machinery, equipment and fixtures . . .           157,354      136,309
   Leasehold improvements. . . . . . . . .             5,119        4,905
   Construction in progress. . . . . . . .             4,613        6,408
                                                     372,663      350,372
   Accumulated depreciation
     and amortization. . . . . . . . . . .           113,939       96,385
                                                    $258,724     $253,987

Note E - Accounts Payable and Accrued Expenses
                                                         December 31
                                                      1997        1996
                                                        (in thousands)
   Accounts payable - trade. . . . . . . .          $ 25,387     $ 23,967
   Accrued expenses. . . . . . . . . . . .             9,405        6,658
   Customers' advances . . . . . . . . . .             1,454        2,120
   Salaries and wages. . . . . . . . . . .             6,279        9,431
   Restructuring and acquisition
     related accruals. . . . . . . . . . .             2,849        3,898
   Interest payable. . . . . . . . . . . .             3,311        5,679
   Other . . . . . . . . . . . . . . . . .             6,076        8,296
                                                    $ 54,761     $ 60,049

Note F - Other (Expense) Income

Other (expense) income for the years ended December 31, follows:
                                             1997       1996       1995
                                                   (in thousands)

   Interest income and other. . . . . .    $  2,483   $  2,841   $  1,658
   Gain (loss) on securities. . . . . .         130       (576)     1,166
   Loss on interest rate lock . . . . .      (2,271)
   Litigation provision . . . . . . . .                 (2,400)
                                           $    342   $   (135)  $  2,824

<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note G - Taxes on Income

Deferred income taxes arise from temporary differences between the tax basis
of assets and liabilities, and their reported amounts in the consolidated
financial statements.

Taxes on income (benefit) for the years ended December 31, follows:
                                             1997       1996       1995
                                                   (in thousands)
   Current
     Foreign. . . . . . . . . . . . .      $  5,632   $ 10,624   $  4,755
     State and local. . . . . . . . .           709        443        536
                                              6,341     11,067      5,291
   Deferred
     Federal. . . . . . . . . . . . .        (8,097)    (8,598)   (14,209)
     Foreign. . . . . . . . . . . . .         1,620       (914)    (1,993)
     State and local. . . . . . . . .        (1,299)    (1,155)      (448)
                                             (7,776)   (10,667)   (16,650)
                                           $ (1,435)  $    400   $(11,359)

A reconciliation of the taxes on income (benefit) and the amount computed by
applying the federal income tax statutory rate follows:
                                             1997       1996       1995
                                                   (in thousands)

   Statutory tax (benefit). . . . . . .    $  1,889   $  3,406   $(10,952)
   Adjustments due to rate changes. . .                            (2,837)
   Difference between federal and
     foreign statutory rates. . . . . .        (270)    (1,311)     1,390
   Non-deductible goodwill. . . . . . .       1,229        866
   Brazil dividend deduction. . . . . .      (2,090)    (1,428)       601
   US tax on Brazil dividend. . . . . .       1,643
   Reversal of liabilities no longer
     required . . . . . . . . . . . . .      (4,035)
   State and local income taxes, net
     of federal benefit . . . . . . . .        (179)      (867)        58
   Other. . . . . . . . . . . . . . . .         378       (266)       381
                                           $ (1,435)  $    400   $(11,359)

In 1995, the Company adjusted its deferred tax assets and liabilities for the
estimated effect of a decrease in Brazil's tax rates enacted in the fourth
quarter of 1995.  The effect of this non-cash item was to decrease deferred
income taxes in 1995 by $2.8 million.

The Company files a US corporate consolidated federal income tax return which
includes its domestic subsidiaries.  The Company has an alternative minimum
tax credit carryforward of approximately $0.8 million, which is available to
offset future US federal income tax.  At December 31, 1997, the Company's US
net operating loss carryforwards were approximately $71.0 million, which are
scheduled to expire as follows: $2.7 million, $20.9 million, $24.5 million and
$22.9 million in 2009, 2010, 2011 and 2012, respectively.


<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Effective for 1996, as a result of Brazilian tax legislation, the 15% dividend
withholding tax on earnings generated after 1995 was eliminated. Additionally,
in 1996, tax legislation was enacted which permits Brazilian companies to
elect, subject to certain limitations, to deduct dividends in computing
taxable income.   However, there is a 15% withholding tax on dividends
distributed in this manner.

At December 31, 1997, the unrepatriated earnings of ABNB, LM and Sati are
approximately $23.8 million, $5.0 million and $0.1, respectively, and are
considered permanently invested overseas.

The tax effects of the items comprising the Company's deferred income tax
assets and liabilities are as follows:

                                                        December 31
                                                      1997         1996
                                                        (in thousands)
   Current deferred tax assets:
     Accrued expenses. . . . . . . . . . . . . .    $    869     $  1,544
     Other . . . . . . . . . . . . . . . . . . .       2,177        2,717
                                                    $  3,046     $  4,261

   Long-term deferred tax assets
     included in other assets. . . . . . . . . .    $      -     $  1,108

   Deferred tax liabilities:
     Difference between book and tax basis of assets
       acquired in acquisitions and mergers. . .    $ 61,084      $65,952
     Excess tax over book depreciation . . . . .       6,256        6,524
     Other . . . . . . . . . . . . . . . . . . .       1,548        2,780
                                                      68,888       75,256
   Non-current deferred tax assets:
     Operating loss carryforwards
       and tax credits . . . . . . . . . . . . .     (28,480)     (17,979)
     Restructuring expenses. . . . . . . . . . .      (1,199)      (4,114)
     Litigation. . . . . . . . . . . . . . . . .        (451)        (984)
     Other . . . . . . . . . . . . . . . . . . .      (5,950)      (4,723)
                                                     (36,080)     (27,800)
           Net deferred tax liabilities. . . . .    $ 32,808     $ 47,456

Note H - Revolving Credit and Long-Term Debt

In 1996, the Company entered into a $20 million revolving credit facility (the
"Credit Facility") which matures on October 30, 1998. At maturity, the Company
intends to refinance this Credit Facility with a new facility.  At December
31, 1997, interest under the Credit Facility, as defined, was 9.0%.  The
weighted average interest rate in 1997 and 1996 was approximately 9.0% and
9.25%, respectively.  The Credit Facility is an asset-based facility secured
by certain accounts receivable and inventory (total carrying value of
approximately $24.0 million at December 31, 1997).  At December 31, 1997, the
Company had approximately $18.5 million of availability under the Credit
Facility before reductions for $3.6 million of outstanding letters of credit
and $3.2 million of borrowings. At December 31, 1997, LM had outstanding
approximately $3.3 million under a working capital facility which was
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

refinanced as discussed below.  Additionally, a subsidiary of  the Company had
an outstanding bank borrowing of approximately $0.6 million, which is
amortized monthly and bears interest at 9.0%.  Sati had outstanding
approximately $0.4 million in connection with a working capital facility
discussed below. The unused availability in connection with the Sati facility
was approximately $1.3 million.

Long-Term Debt consists of the following (in thousands):
                                                            December 31
                                                         1997      1996

  10-3/8% Senior Notes, due June 1, 2002 (a). . . . .  $126,500  $126,500
  11-1/4% Senior Subordinated Notes, due December 1,
    2007, net of unamortized discount of $1,188 (b) .    93,812
  11-5/8% Senior Notes, due August 1, 2002, net of
    unamortized discount of $105 and $1,005 (c) . . .     7,897    63,995
  LM non-recourse debt (d). . . . . . . . . . . . . .    50,417    70,756
  ABNB financing (e). . . . . . . . . . . . . . . . .    15,933    10,277
  Sati borrowings (f) . . . . . . . . . . . . . . . .     9,352
  Other, ranging from 8% to 9.5%. . . . . . . . . . .     7,190     6,470
                                                        311,101   277,998
  Less current portion. . . . . . . . . . . . . . . .   (17,886)  (14,450)
                   Net long-term debt . . . . . . . .  $293,215  $263,548

(a)  The 10-3/8% Senior Notes(the "10 3-/8% Notes") are redeemable at the
option of the Company, in whole or in part, on or after June 1, 1997, at
stated redemption prices.  Equal mandatory sinking fund payments on June 1,
2000 and June 1, 2001 are required to retire an aggregate of 50% of the
original principal amount.

The 10-3/8% Notes are senior indebtedness of the Company and rank equally in
right of payment, on a pari passu basis, with all existing and future senior
indebtedness of the Company and are secured by a pledge of all the issued and
outstanding shares of capital stock of ABN and ABNH and by 65% of the shares
of ABNB.  ABN, ABNH and the 77.5% interest in ABNB constitute a substantial
portion of the assets of the Company.

(b)  On December 12, 1997, the Company completed a private placement of 95,000
units consisting of $95 million principal amount of 11-1/4% Senior
Subordinated Notes due December 1, 2007 (the "11-1/4% Notes") and 95,000
warrants to purchase 1,185,790 shares of Common Stock (the "1997 Warrants") at
$5.50 per share.  A portion of the proceeds was used to purchase approximately
87.7% of the outstanding 11-5/8% Senior Notes (as defined and discussed below)
and amounts then outstanding under the Credit Agreement.  The 11-1/4% Notes
were issued as Series A Notes.  In January 1998, a registration statement, as
required pursuant to the private placement offering, was filed to register
Series B Notes under the Securities Act of 1933, as amended, and when declared
effective will be exchanged for the Series A Notes. The form and terms of both
notes will generally be the same.  The registration statement must be declared
effective prior to April 11, 1998 and the exchange consummated prior to May
21, 1998, otherwise the interest rate on the 11-1/4% Notes will increase by
100 basis points until the registration statement is declared effective.

<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The 11-1/4% Notes were recorded net of the fair value of $1.2 million ascribed
to the 1997 Warrants issued in connection with the 95,000 units.  This
discount and related deferred financing costs will be amortized by the
interest method.  At the Company's option, the 11-1/4% Notes are redeemable in
whole or in part, on and after December 1, 2002, at stated redemption prices
with accrued interest.  In addition, up to 35% of the original principal
amount issued may be redeemed from the proceeds of equity offerings, as
defined, at stated redemption prices with accrued interest.  Furthermore, upon
a change of control, as defined, the Company is required to offer to redeem
the 11- 1/4% Notes for 101% of the principal amount thereof.  The 11-1/4%
Notes are unsecured and subordinated in right of payment to all existing and
future senior indebtedness of the Company and rank pari passu in right of
payment with any future senior subordinated indebtedness of the Company and
will rank senior to all subordinated indebtedness, as defined, of the Company.

The 11-1/4% Notes have been guaranteed jointly and severally on a senior
subordinated basis on the issue date, by all of the Company's direct and
indirect domestic operating subsidiaries (the "Guarantors"). The guarantees
are general unsecured senior subordinated obligations of the Guarantors.

(c)  The 11-5/8% Senior Notes (the "11-5/8% Notes)are redeemable at the option
of the Company, in whole or in part, on and after August 1, 1998, at stated
redemption prices.  The 11-5/8% Notes are unsecured senior indebtedness of the
Company and rank equally in right of payment, on a pari passu basis, with all
existing and future senior indebtedness of the Company. The 11-5/8% Notes are
effectively subordinated to the 10-3/8% Notes.

In connection with the financing on December 12, 1997, and pursuant to a
Tender Offer and Consent Solicitation Offer, the Company purchased
approximately $57.0 million principal amount of the 11-5/8% Notes for an
aggregate amount of approximately $62.4 million ($1,094.47 per $1,000
principal amount) which included a consent fee.  Pursuant to the Consent
Solicitation, the 11-5/8% Note Indenture was amended, which, among other
things, eliminated substantially all of the restrictive covenants contained
therein.  In connection with this early extinguishment, the Company recorded
an extraordinary charge of approximately $5.6 million which is net of
applicable income tax benefits of approximately $3.0 million.

(d)  In March 1998, LM entered into a five-year revolving credit and letter of
credit facility (the "LM Credit Facilities"), proceeds of which were used to
repay the outstanding LM senior and subordinated non-recourse debt.  The LM
Credit Facilities are non-recourse debt denominated in Australian dollars,
bear interest at the 90-day bank bill benchmark rate (approximately 6.6%
including a 1.75% interest rate margin), permit cash dividends of 50% of free
cash flow, (as defined), and include various default provisions.

The LM Credit Facilities include a five-year amortizing revolving credit
facility with a maximum commitment of approximately $55.3 million with
semi-annual














commitment stepdowns and a $3.3 million letter of credit facility. The
five-year committed letter of credit facility in turn secures a $3.3 million
working capital facility for borrowing and letter of credit purposes. This

<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

working capital facility is renewable on an annual basis.  The LM Credit
Facilities are secured by substantially all of LM's assets and the capital
stock of its subsidiaries.  Approximately $0.5 million of letters of credit
are outstanding under the working capital facility.  The maximum amount of
availability under the LM Credit Facilities reduces by approximately $3.3
million in 1998 and 1999, $6.5 million in 2000, 2001 and 2002, with the
balance repayable in 2003.

(e) The ABNB financing includes BNDES financing (Brazilian Federal Government
Development Bank debt) denominated in Brazilian reais and bears interest at
approximately 16.3% (6.4% above the TJLP government-administered, long-term
interest rate).  As of December 31, 1997, the TJLP rate was approximately
9.9%.  Amounts outstanding under the BNDES borrowings were approximately $6.8
million and $10.3 million at December 31, 1997 and 1996, respectively.  At
December 31, 1997, the borrowings were secured by an interest in equipment
(carrying value of approximately $6.6 million).  As of December 31, 1997, ABNB
had outstanding approximately $9.1 million of unsecured borrowings incurred in
May and December 1997 in connection with an acquisition and the purchase of
assets.  The borrowings are denominated in reais and bears interest at
December 31, 1997, at rates varying from approximately 12.0% to 24.6%, with a
weighted average rate of approximately 20.2%.

(f) In August 1997, in connection with the Sati acquisition, Sati entered into
bank term loans in the aggregate of $9.4 million, comprised of a $6.7 million
seven-year holding company term loan and a $2.7 million six-year operating
company term loan.  At the same time, Sati entered into a $1.7 million
operating company working capital revolver facility which is renewable on an
annual basis.  At December 31, 1997, approximately $0.4 million was
outstanding under this facility.  The borrowings at December 31, 1997 bear
interest at approximately 5.3% (PIBOR plus 2%). The seven-year term loan is
secured by a pledge of Sati's operating subsidiaries stock and the six-year
term loan and working capital revolver by an assignment of receivables
(approximately $6.5 million at December 31, 1997) and cross guarantees by each
of the operating company borrowers. The facility permits the distribution of
dividends of up to 25% of excess cash flow as defined.

The Company's financing agreements contain covenants concerning interest
coverage ratios, EBITDA, sales of assets, sale and leaseback transactions,
liens, transactions with affiliates, distributions from subsidiaries,
indebtedness, capital expenditures, mergers and acquisitions, payment of cash
dividends, redemptions of capital stock and provide for certain limitations on
distributions from subsidiaries among other matters.  The Company is a holding
company and has no significant assets or operations, accordingly, the
Company's ability to service its debt depends upon the future performance of
its subsidiaries, which will be subject to prevailing economic and competitive
conditions and to other factors, including the continued ability to generate
cash, to distribute that cash to the Company for debt service and to
repatriate funds from foreign subsidiaries, particularly ABNB.  LM and Sati
have limitations on the amount of dividend payments to the Company under the
terms of their respective loan agreements.  At December 31, 1997, under the
most restrictive covenants, approximately $16.7 million of net assets of the
Company's subsidiaries were not available for dividends.  
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The high level of the Company's indebtedness poses certain risks, including
the risk that it might not generate sufficient cash flow to service the
Company's obligations and the risk that the Company's capacity to respond to
market conditions, extraordinary capital needs and other factors could be
adversely affected.  The Company's ability to service its debt depends upon
the future performance of the Company's subsidiaries, which will be subject to
prevailing economic and competitive conditions and to other factors, including
the ability to generate cash at the Company's operating subsidiaries, to
distribute that cash to the Company for debt service and to repatriate funds
from foreign subsidiaries, particularly ABNB.  Other future acquisitions and
joint ventures in which the Company does not maintain 100% ownership, foreign
legal and tax requirements and the terms of any acquisition debt incurred may
further restrict the ability of newly acquired subsidiaries and joint venture
investments to declare and pay dividends or make distributions.

The Company expects to refinance the 10-3/8% Notes, the 11-5/8% Notes and the
11-1/4% Notes, at or before their respective maturities; however, no assurance
can be given as to the Company's ability to refinance such obligations or that
the Credit Facility will be available when required.  In the event that the
Company is unable to refinance its indebtedness as it matures or raise the
funds through asset sales, sales of equity or otherwise, its ability to pay
principal of or interest on the 10-3/8% Notes, the 11-5/8% Notes, the 11-1/4%
Notes and other long-term indebtedness of the Company would be adversely
affected.

The fair value of the 10-3/8% Notes, the 11-5/8% Notes and the 11-1/4% Notes
based on market quotes at December 31, 1997 was approximately $125.2 million,
$8.1 million and $94.7 million, respectively.  The fair value of the 10-3/8%
Notes and the 11-5/8% Notes based on market quotes at December 31, 1996 was
approximately $124.6 million and $62.4 million, respectively.  The fair value
of all other debt approximates their carrying values.
<TABLE>
<CAPTION>
Principal maturities of long-term debt, which gives effect to the maturities
under the LM Credit Facilities, follow:
                               Domestic     ABNB       LM       Sati
                                             (in millions)
      <S>                       <C>        <C>       <C>        <C>
      1998 . . . . . . . . .    $ 2.7      $ 9.4                $  .5
      1999 . . . . . . . . .      1.8        4.5     $ 1.5         .9
      2000 . . . . . . . . .     32.8        1.7       6.5        1.7
      2001 . . . . . . . . .     31.9         .3       6.5        1.7
      2002 . . . . . . . . .     71.5                  6.5        1.7
      2003 and thereafter. .     96.0                 29.4        2.9
</TABLE>
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note I - Capital Stock

The Company is authorized to issue 5,000,000 shares of Preferred Stock, with
such terms as the Board of Directors may determine.

The Board of Directors, in 1994, adopted a Preferred Stock Purchase Rights
Plan pursuant to which it declared a dividend of one Preferred Stock Purchase
Right (the "Rights") for each outstanding share of Common Stock on March 24,
1994.  Each Right entitles the registered holder to purchase from the Company
one one-hundredth (1/100) of a share of preferred stock, designated as Series
A Junior Preferred Stock, at a price of $15.50.  The Rights will become
exercisable only in the event, with certain exceptions, an acquiring party
accumulates 15 percent or more of the Company's voting stock or if a party
announces an offer to acquire 30 percent or more of the voting stock.  The
Rights expire on March 24, 2004.  Upon the occurrence of certain events,
holders of the Rights will be entitled to purchase either the Company's stock
or shares in an "acquiring entity" at half of market value.  The Company will
generally be entitled to redeem the Rights at $.01 per Right at any time until
the tenth day following the acquisition of 15 percent of its voting stock by
an acquirer.  The Rights are not exercisable if redeemed.

At December 31, 1997, 176,500 warrants issued to operating management in 1993
("Warrants"), are outstanding and exercisable at $0.011 per share. The
Warrants expire in 2000.

In July 1997, the Company sold in a private placement $5 million accreted
value (at issuance) of a Zero Coupon Subordinated Convertible Debenture due
August 2, 2002, (the "July Security") and in November 1997 $5 million accreted
value (at issuance) of a Zero Coupon Subordinated Convertible Debenture due
November 25, 2002, (the "November Security") (in the aggregate the
"Securities"), plus warrants.  The conversion prices of the Securities at
issuance were in excess of the market value of the Common Stock.  At maturity,
the outstanding Securities are automatically converted into Common Stock
resulting in their treatment as a component of stockholders' equity for
financial reporting purposes.  The Securities are subordinated to all existing
or future bank, institutional, financial transaction or acquisition
indebtedness. Interest accretes at a nominal rate of 6% per annum on the July
Security and 5% per annum on the November Security.

Holders may convert the Securities into Common Stock at the averages of the
closing prices during 25 trading days prior to conversion yielding the lowest
average price (a two day average for the July Security and a five day average
for the November Security) but not in excess of $6.00 for the July Security
and $6.56 for the November Security.  However, during the first 25 trading
days following issuance, the conversion prices were fixed at $4.56 for the
July Security and $5.25 for the November Security.  No more than 20% may be
converted during the first 90-day period and each successive 60-day period
until the 210th day, and 20% each 90 days thereafter following closing unless
the closing price exceeds certain amounts, whereupon full conversion is
permitted on that day. The Company has agreed to seek and maintain
registration, under the Securities Act of 1933, as amended, of the underlying
shares of Common Stock into which the Securities and warrants are convertible.
If registration has not become effective by April 30, 1998, the holders of a
majority of the principal amount of the November Security, may elect to
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

declare the debenture immediately due and payable and require the payment of
the greater of 110% of the accreted value of the debenture plus certain
additional amounts or such amount divided by their applicable conversion price
multiplied by the closing price of the common stock on the day of the election
as described in the debenture and registration rights agreement.  If the
foregoing amount is unpaid for five business days the Holders may require the
Company to issue the number of shares of Common Stock equal to the foregoing
amount divided by the conversion price then in effect, as its sole and
exclusive remedy.  In addition, certain payments are required to be made under
certain circumstances set forth in the November Security registration rights
agreement if the registration is not effective within 120 days.  In September
1997, $1.0 million principal amount of the July Security was converted into
224,688 shares of Common Stock.  At December 31, 1997, the remaining
Securities were convertible into approximately 1.9 million shares of Common
Stock.

The Securities, at the election of the Company, may be redeemed in cash in
lieu of issuing shares of Common Stock depending on the market price of the
Common Stock.  Redemption prices vary depending on the type of redemption
transaction from the closing price on the date of conversion (or an average of
5 days prices) multiplied by the number of shares that would have been issued
upon conversion to 110% of the principal amount called for redemption.

In connection with the July Security, the Company issued 140,000 two-year
warrants exercisable at $5.70 per share and 75,000 three-year warrants
exercisable at $6.4125 per share. In connection with the November Security the
Company issued 150,000 three-year warrants exercisable at $7.09 per share.  If
the Company redeems the Securities, additional 5 year warrants for 21 shares
for each $1,000 redeemed are issuable with an exercise price equal to 105% of
the closing price on the redemption date. The fair value of the warrants
issued in 1997 (approximately $0.5 million), together with the notional
interest and related issuance expenses will be accreted over the respective
terms of the Securities, using the interest method.

At December 31, 1997, approximately 7,680,000 shares of Common Stock were
reserved for warrants, stock-based compensation plans and convertible
securities.

Note J - Stock-Based Compensation Plans

The Company has four stock-based compensation plans, as follows: the 1990
Employee Stock Option Plan (the "1990 Plan"), the Long-Term Performance Plan
(the "LTP Plan"), the Executive Incentive Plan, and the Deferred Stock and
Compensation Plan for Non-Employee Directors (the "Directors Plan").  The
terms of option awards are determined on the date of grant, generally have an
exercise life of ten years, are granted at not less than the market price and
become exercisable in equal amounts over a three-year period from the date of
grant.

<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of the option plans is presented below:
<TABLE>
<CAPTION>
                                  1997                   1996                   1995
                                      Weighted-              Weighted-              Weighted-
                                       Average                Average                Average
                                      Exercise               Exercise               Exercise
                           Shares      Price       Shares      Price       Shares     Price
<S>                       <C>          <C>       <C>           <C>        <C>         <C>
Options outstanding,
   beginning of year. .   1,561,000    $2.22      1,701,783    $4.55      1,771,783   $5.05
  Exercised . . . . . .     (84,051)    3.07         (2,000)    1.88        (10,000)   1.81
  Forfeited . . . . . .     (49,133)    2.87        (38,200)    3.59       (345,000)   5.20
  Granted . . . . . . .     460,000     4.63      1,083,750     2.06        285,000    2.19
  Canceled. . . . . . .                          (1,184,333)    5.38
Options outstanding,
   end of year. . . . .   1,887,816     2.74      1,561,000     2.22      1,701,783    4.55

Option price range        $1.38 to               $1.38 to                 $1.81 to
   at end of year . . .     $6.19                  $6.31                    $6.63

Option price range for
   exercised shares . .   $1.38 to               $1.88                    $1.81
                          $4.38
Options available for grant
   at end of year . . .   2,013,000               2,502,000               2,666,000
</TABLE>
Weighted average exercise price             Exercise Price       Fair value
   of options granted:                     1997      1996      1997    1996
     At market price. . .                  $4.63     $1.77     $1.51   $1.08
     Above market price . .                none       2.14     none      .79

The following table summarizes information about fixed-price stock options
outstanding at December 31, 1997:
<TABLE>
<CAPTION>
                               Options Outstanding                       Options Exercisable
                                    Weighted-        Weighted-                       Weighted-
                                     Average          Average                         Average
 Range of             Number        Remaining        Exercise           Number        Exercise
 Exercise Prices   Outstanding   Contractual Life     Price           Exercisable      Price
  <S>                <C>            <C>                <C>              <C>            <C>
  $1.38 to 1.88        333,016      8.1 years          $1.50            108,018        $1.51
  $2.00 to 2.25      1,054,800      7.5 years          $2.18            505,933        $2.20
  $3.44 to 4.38        262,500      9.2 years          $3.55             10,001        $4.38
  $6.00 to 6.19        237,500      9.3 years          $6.02             25,000        $6.19
  $1.38 to 6.19      1,887,816      8.1 years          $2.74            648,952        $2.27
</TABLE>

<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In 1997, 1996 and 1994, 140,000, 317,500 and 90,000 shares of restricted stock
were issued under the LTP Plan that fully vest after three years, four years
and three years, respectively.  The market value of the shares on the date of
grant was approximately $3.88, $1.63 and $2.87 per share, respectively, and
the cost of the grant based on the market price is being amortized over the
vesting period.  The vesting for the restricted stock awards granted in 1996
may be accelerated if certain performance goals are achieved.

In 1996, as part of a compensation review, 1,184,333 outstanding options were
canceled under the 1990 Plan and the LTP Plan and 705,750 options with a
weighted average exercise price of $2.24 were issued under the same plans.

In 1995, an award under the Executive Incentive Plan for 91,875 restricted
shares was issued in lieu of a cash bonus.

Under the Directors Plan in 1997, 1996 and 1995, directors received rights to
24,000, 66,000 and 5,850 equivalent shares, respectively, that are issuable
only following their service on the Board of Directors.  The per share market
value of the Common Stock on the dates of grant was approximately $4.88, $4.00
and $2.19, respectively.  The aggregate cost is charged to operations. At
December 31, 1997, an aggregate of 101,050 shares of Common Stock are reserved
for issuance pursuant to this plan, and 82,650 shares may be issued for future
grants.

The Directors Plan further provides that directors may elect to defer
receiving directors' fees until after their service on the Board ceases.  At
that time the deferred fees may be paid in cash plus interest, or in shares of
Common Stock issuable by converting the amounts deferred into Common Stock
based on the market price in the year following the year of deferral, 16,300
shares at December 31, 1997.

Had compensation cost for the Company's stock option plans been determined
based on the fair value at the grant date for awards in 1997, 1996 and 1995,
consistent with the provisions of SFAS 123 "Accounting for Stock-Based
Compensation," net income (loss) and net income (loss) per common share -
basic and diluted share would have been reduced (increased) by approximately
($0.5 million) or ($.02) per share, $0.3 million or $.02 per share and ($0.1
million) or ($.01) per share, respectively.  Because SFAS 123 method of
accounting has not been applied to options granted prior to 1995, the
resulting pro-forma compensation cost may not be representative of that
expected in future years.

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants: no dividend yield; expected volatility of 50%;
expected lives of 7.5 years, and risk-free interest rates of 6.0% in 1997 and
7.0% in 1996 and 1995.


<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note K - Employee Benefits Plans

Postretirement Health Care and Life Insurance Plans.  The Company provides
certain health care and life insurance benefits for certain eligible retired
employees.  The Company's employees, including employees subject to certain
collective bargaining agreements, may become eligible for these benefits if
they reach normal retirement age, with certain service requirements.

The Company accrues the estimated cost of retiree benefit payments other than
pensions during the years an employee provides services.  The plan is not
funded.

The following table sets forth the status of this obligation:
                                                         December 31
                                                      1997         1996
                                                        (in thousands)
   Accumulated postretirement
     benefit obligation:
       Retirees. . . . . . . . . . .  . . .         $  5,129     $  7,965
       Eligible active plan participants. .              347          361
       Other active plan participants. . .             1,254        1,822
      Accumulated postretirement
        benefit obligation. . . . . . . . .            6,730       10,148
      Unrecognized transition obligation. .           (2,760)      (2,944)
      Unrecognized net gain (loss). . . . .            2,583         (876)
        Accrued postretirement
          benefit obligation. . . . . . . .         $  6,553     $  6,328

Net postretirement benefit costs consisted of the following components:
                                             1997       1996       1995
                                                   (in thousands)
   Service cost-benefits earned . . . .    $    104   $    160   $    154
   Interest cost on accumulated
     postretirement benefit obligation.         471        684        715
   Partial plan termination (1) . . . .                               430
   Amortization of transition obligation        184        184        209
   Amortization of gain . . . . . . . .        (141)
                                           $    618   $  1,028   $  1,508

(1)  A portion of the previously unrecognized transition obligation was
charged to the 1995 restructuring reserve (see Note L).

The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation, as of January 1, 1997, was 11.5% for 1997
decreasing each successive year until it reaches 5.5%, after which it remains
constant.  A one-percentage-point increase in the assumed health care cost
trend rate for each year would increase service cost plus interest on the
accumulated postretirement benefit obligation by approximately 11.8%.  The
assumed discount rates used in determining the accumulated postretirement
benefit obligation was 7.0% at December 31, 1997 and 7.5% at December 31, 1996
and December 31, 1995.


<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pension Plans.  ABN and ABNH are obligated to make regular defined
contributions to several multi-employer plans and contributions to a single
employer defined benefit pension fund, under the terms of various union
contracts.  The aggregate contribution to such multi-employer plans for
retirement and welfare benefits was approximately $0.3 million, $0.6 million,
and $1.7 million for the years ended December 31, 1997, 1996 and 1995,
respectively.  Retirement benefits are also provided by ABN and ABNH, to
eligible union and nonunion employees, through defined contributions to an
employee's retirement plan; the aggregate contribution to such plan and
charged to operations was $1.1 million, $1.1 million and $1.2 million for the
years ended December 31, 1997, 1996 and 1995, respectively.

ABN and ABNH also have a trusteed noncontributory defined benefit pension
plan.  Benefits under the noncontributory defined benefit plan which were
frozen in 1992 were based on years of service and average final compensation.
The funding policy is to pay at least the minimum amounts required by the
Employee Retirement Income Security Act of 1974.  The net pension expense
(income) for this defined benefit pension plan was approximately 0.1 million
and $0.2 million in 1996 and 1995, respectively.

The following table sets forth the 1997 and 1996 funded status and amounts
recognized for the Company's defined benefit pension plan in the consolidated
balance sheets (in thousands):
                                                      1997         1996
   Actuarial present value of accumulated
     plan benefits, including vested
     benefits of $9,371 and $9,112 . . . .          $  9,379     $  9,122

   Projected benefit obligation for
     service rendered to date. . . . . . .          $  9,379     $  9,122
   Unrecognized net gain . . . . . . . . .             1,001          206
   Plan assets at fair value, primarily
     equity securities . . . . . . . . . .            (9,789)      (8,698)
       Accrued pension liability . . . . .          $    591     $    630

The weighted average discount rate used in determining the actuarial present
value of the projected benefit obligation was 7.0% at December 31, 1997 and
1996.  The expected long-term rate of return was 8.5% in 1997 and in 1996.

LM, prior to November 30, 1996 participated in defined contribution and
benefit plans operated for employees of the predecessor companies. As of
December 1, 1996, LM established a new plan which includes a defined
contribution section and a defined benefit section.  The relevant net assets
of the previous plan were transferred to the new plan. The defined
contribution section is funded on a current basis whereas the defined benefit
section is funded in accordance with actuarial recommendations.


<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth the December 31, 1997 status of the LM defined
benefit section: (in thousands):

   Actuarial present value of accumulated
     plan benefits, 100% vested    . . . .          $  1,994

   Projected benefit obligation for
     service rendered to date. . . . . . .          $  2,242
   Unrecognized net loss . . . . . . . . .               (44)
   Unrecognized net asset as of the
     beginning of year . . . . . . . . . .               139
   Plan assets at fair value,
     primarily diversified funds . . . . .            (2,372)
       Accrued pension asset . . . . . . .          $    (35)

Net periodic pension cost in 1997 consisted of the following
components (in thousands):
   Service cost-benefits earned . . . . .           $    292
   Interest cost on projected benefit obligation         186
   Expected return on plan assets . . . .               (213)
   Amortization of unrecognized assets. .                (11)
                                                    $    254

The weighted average discount rate and rate of increase in future compensation
levels used in determining the actuarial present value of the projected
benefit obligation were 7.0% and 4.5% as of November 30, 1997 and 8% and 5.5%
as of December 1, 1996.  The expected long-term rate of return was 8% since
the inception of the new plan.

Retirement benefits provided under the new LM defined contribution section,
and charged to operations was $0.8 million for the year ended December 31,
1997.  In 1996, in connection with the previous defined contribution and
benefit plans operated for employees of the predecessor companies, the
subsidiaries expensed and funded approximately $0.9 million, which
approximated the pension expense that would be incurred using US Generally
Accepted Accounting Principles.

The Company has a noncontributory supplemental executive retirement plan
("SERP") for certain senior management employees.  Benefits under the
noncontributory plan are based on years of service and average final
compensation.  The plan is unfunded and benefits will be paid from the assets
of the Company.


<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth the status of this obligation (in thousands):

                                                         December 31
                                                      1997         1996
   Accumulated benefit, including vested
     benefits of $2,279 and $1,935 . . . .          $  2,563     $  2,153

   Projected benefit obligation  . . . . .          $  3,172     $  3,021
   Prior service cost. . . . . . . . . . .            (1,355)      (1,457)
   Unrecognized net loss . . . . . . . . .              (290)        (427)
   Preliminary accrued pension costs . . .             1,527        1,137
   Additional minimum liability* . . . . .             1,036        1,016
       Accrued pension cost
         for financial statements. . . . .          $  2,563     $  2,153

*There is an intangible asset equal to the additional minimum liability.

Net periodic pension cost consisted of the following components:
                                             1997       1996       1995
                                                   (in thousands)
   Service cost-benefits earned . . . .    $    146   $    146   $    185
   Interest cost on projected
     benefit obligation . . . . . . . .         214        189        191
   Amortization of prior service cost .         109        107        103
                                           $    469   $    442   $    479

The weighted average discount rate used in determining the actuarial present
value of the projected benefit obligation was 7.0% at December 31, 1997 and
1996.


<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note L - Restructuring and Idle Equipment

In 1995, the Company recorded a pre-tax restructuring charge of approximately
$14.3 million pursuant to a restructuring plan developed by management for the
Company's domestic security printing operations, including the downsizing of
its corporate offices.  The plan was substantially completed in the second
quarter of 1996.  Remaining obligations under this plan relate to lease
commitments.  Restructuring activities prior to 1995 related primarily to the
closing of a plant by ABN.

The following presents the Company's restructuring activities:
                         Severance        Asset         Leases
                        and Related    Revaluations     and Other
                           Cost       and Writedowns   Obligations   Total
                                               (in millions)
  Balance at
     January 1, 1995. .                                $   5.7     $   5.7
  Restructuring charge.   $  2.9        $  5.0             6.4        14.3
  Imputed interest. . .                                    0.3         0.3
  Noncash items . . . .     (1.8)         (5.0)                       (6.8)
  Cash payments             (0.1)                         (1.4)       (1.5)
  Balance at
     December 31, 1995.      1.0                          11.0        12.0
  Imputed interest. . .                                     .4          .4
  Noncash items . . . .                                   (1.6)       (1.6)
  Cash payments . . . .     (1.0)                         (4.8)       (5.8)
  Balance at
     December 31, 1996.   $    -        $     -            5.0         5.0
  Imputed interest. . .                                     .4          .4
  Cash payments . . . .                                   (2.6)       (2.6)
  Balance at
     December 31, 1997.                                $   2.8     $   2.8

Future cash outlays for the remaining restructuring activities are anticipated
to be $1.3 million in 1998, $1.3 million in 1999 and $0.2 million in 2000.

Note M - Condensed Financial Information and Geographic Area Data:

ABNB is domiciled in Brazil, LM is domiciled in Australia and New Zealand,
Sati is domiciled in France and all other subsidiaries of the Company are
predominately domiciled in the United States.

The following condensed consolidating financial information (amounts in
millions) illustrates the composition of the pledged subsidiaries (See Note H
- Revolving Credit and Long-Term Debt) and provides additional information
which is useful in assessing the financial composition of the pledged
subsidiaries.  Investments in subsidiaries are accounted for by the parent on
the equity method.  Intercompany investments and transactions are eliminated
in consolidation.  Other is composed of LM and Sati (principally LM) in 1997
and LM in 1996.

<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                        Condensed Balance Sheets
                                                  Domestic    ABNB      Other    Consol.
<S>                                               <C>       <C>       <C>       <C>
As at December 31, 1997
     Cash and cash equivalents.     . . . . .     $ 11.7    $  4.8    $   .8    $ 17.3
     Accounts receivable, net . . . . . . . .       27.0      14.5      15.9      57.4
     Costs in excess of billings
       on uncompleted contracts . . . . . . .        5.4                           5.4
     Inventories. . . . . . . . . . . . . . .       18.0      11.7      12.0      41.7
     Deferred income taxes. . . . . . . . . .        2.2        .0        .8       3.0
     Prepaid expenses and other . . . . . . .       12.8        .7      (2.2)     11.3*
     Property, plant and equipment, net . . .      165.7      63.8      29.3     258.8
     Other assets . . . . . . . . . . . . . .      103.9+      6.7       5.1      26.0*
     Excess of cost of investment in subsidiaries
       over net assets acquired, net. . . . .        9.7      27.9      45.0      82.6
     Total assets . . . . . . . . . . . . . .     $356.4    $130.1    $106.7    $503.5

     Total current liabilities. . . . . . . .     $ 26.8    $ 20.3    $ 33.1    $ 80.2
     Long-term debt. . . . . . . .. . . . . .      235.1       3.7      54.4     293.2
     Other liabilities . . . . . .. . . . . .       10.5       9.0       1.9      21.4
     Deferred income taxes. . . . . . . . . .       29.0       3.3        .6      32.9
     Minority interest. . . . . . . . . . . .                 20.8                20.8
     Total stockholders' equity . . . . . . .       55.0      73.0      16.7      55.0*
     Total liabilities and stockholders' equity   $356.4    $130.1    $106.7    $503.5

As at December 31, 1996
     Cash and cash equivalents.     . . . . .     $  2.8    $  8.7    $  2.7    $ 14.2
     Marketable securities. . . . . . . . . .        2.1                           2.1
     Accounts receivable, net . . . . . . . .       23.4      14.4       8.8      46.6
     Costs in excess of billings
       on uncompleted contracts . . . . . . .         .9                            .9
     Inventories. . . . . . . . . . . . . . .       12.9      11.5      11.2      35.6
     Deferred income taxes. . . . . . . . . .        2.9        .3       1.0       4.2
     Prepaid expenses and other . . . . . . .        5.0       2.5       1.9       9.4
     Property, plant and equipment, net . . .      172.1      59.4      22.5     254.0
     Other assets . . . . . . . . . . . . . .       98.0+      8.4       6.1      28.0*
     Excess of cost of investment in subsidiaries
       over net assets acquired, net. . . . .        9.4      24.4      51.6      85.4
     Total assets . . . . . . . . . . . . . .     $329.5    $129.6    $105.8    $480.4

     Total current liabilities. . . . . . . .     $ 38.0    $ 17.6    $ 22.0    $ 77.6
     Long-term debt. . . . . . . .. . . . . .      189.6       6.9      67.0     263.5
     Other liabilities . . . . . .. . . . . .       14.8       7.4       2.5      24.7
     Deferred income taxes. . . . . . . . . .       40.8       6.7                47.5
     Minority interest. . . . . . . . . . . .                  20.8                20.8
     Total stockholders' equity . . . . . . .       46.3      70.2      14.3      46.3*
     Total liabilities and stockholders' equity   $329.5    $129.6    $105.8    $480.4
</TABLE>
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                   Condensed Statements of Operations
                                                 Domestic    ABNB     Other    Consol.
<S>                                               <C>       <C>       <C>       <C>
Year Ended December 31, 1997
     Sales . . . . . . . . . . . . . . . . .      $103.9    $141.8    $ 90.7    $336.4
     Cost of goods sold. . . . . . . . . . .        63.8     104.4      61.6     229.8
     Selling and administrative. . . . . . .        17.6      10.1      11.5      39.2
     Depreciation and amortization . . . . .         8.3       9.2       5.5      23.0
                                                    89.7     123.7      78.6     292.0
                                                    14.2      18.1      12.1      44.4
     Unallocated corporate overhead. . . . .        (6.4)                         (6.4)
     Interest expense. . . . . . . . . . . .       (24.0)     (2.8)     (5.9)    (32.7)
     Foreign translation losses, net . . . .          .0       (.1)                (.1)
     Other income, net . . . . . . . . . . .        12.1+      2.1                  .3*
     Income (loss) before taxes on income
       (benefit) and minority interest . . .        (4.1)     17.3       6.2       5.5
     Taxes on income (benefit) . . . . . . .        (8.0)      4.0       2.6      (1.4)
     Income before minority interest . . . .         3.9      13.3       3.6       6.9
     Minority interest . . . . . . . . . . .                   3.0                 3.0
     Income before extraordinary item. . . .         3.9      10.3       3.6       3.9
     Early extinguishment of debt. . . . . .        (5.6)                         (5.6)
        Net income (loss). . . . . . . . . .      $ (1.7)   $ 10.3    $  3.6    $ (1.7)

Year Ended December 31, 1996
     Sales . . . . . . . . . . . . . . . . .      $ 98.1    $163.3    $ 48.1    $309.5
     Cost of goods sold. . . . . . . . . . .        62.9     109.1      30.1     202.1
     Selling and administrative. . . . . . .        16.7      16.0       7.3      40.0
     Depreciation and amortization . . . . .         8.3       8.4       3.3      20.0
                                                    87.9     133.5      40.7     262.1
                                                    10.2      29.8       7.4      47.4
     Unallocated corporate overhead. . . . .        (8.3)                         (8.3)
     Interest expense. . . . . . . . . . . .       (23.3)     (1.9)     (3.7)    (28.9)
     Foreign translation losses, net . . . .                   (.3)                (.3)
     Other income, net . . . . . . . . . . .        15.7+      2.3                  .2*
     Income (loss) before taxes on income
       (benefit) and minority interest . . .        (5.7)     29.9       3.7       9.7
     Taxes on income (benefit) . . . . . . .        (9.8)      8.5       1.7        .4
     Income before minority interest . . . .         4.1      21.4       2.0       9.3
     Minority interest. . . . . . . .. . . .                   4.8        .4       5.2
        Net income . . . . . . . . . . . . .      $  4.1    $ 16.6    $  1.6    $  4.1

Year Ended December 31, 1995
     Sales . . . . . . . . . . . . . . . . .      $108.1    $ 98.1              $206.2
     Cost of goods sold. . . . . . . . . . .        76.5      72.5               149.0
     Selling and administrative. . . . . . .        17.7       9.9                27.6
     Restructuring and idle equipment. . . .        14.3                          14.3
     Depreciation and amortization . . . . .         9.3       5.6                14.9
                                                   117.8      88.0               205.8
                                                    (9.7)     10.1                  .4
     Unallocated corporate overhead. . . . .       (12.3)                        (12.3)
     Interest expense. . . . . . . . . . . .       (23.1)                        (23.1)
     Other income, net . . . . . . . . . . .         8.5+       .2                (2.8)*
     Income (loss) before taxes on income
       (benefit) and minority interest. . .        (36.6)     10.3               (32.2)
     Taxes on income (benefit) . . . . . . .       (14.2)      2.8               (11.4)
     Income (loss) before minority interest.       (22.4)      7.5               (20.8)
     Minority interest . . . . . . . . . . .                   1.6                 1.6
        Net income (loss). . . . . . . . . .      $(22.4)   $  5.9              $(22.4)
</TABLE>
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                    Condensed Statements of Cash Flows
                                                 Domestic     ABNB      Other    Consol.
<S>                                               <C>       <C>       <C>       <C>
Year Ended December 31, 1997
     Net cash - operating activities. . . .       $(37.0)   $ 21.8    $ 14.5    $  (.7)
     Investing activities
       Acquisitions of subsidiaries . . . .          (.4)     (3.4)               (3.8)
       Capital expenditures . . . . . . . .         (2.2)     (7.9)     (8.0)    (18.1)
       Other. . . . . . . . . . . . . . . .          (.2)                 .3        .1
     Net cash - investing activities. . . .         (2.8)    (11.3)     (7.7)    (21.8)
     Financing activities
       Proceeds from borrowings . . . . . .         90.1                 3.7      93.8
       Repayments of borrowing. . . . . . .        (61.8)     (2.9)    (12.0)    (76.7)
       Dividends to minority shareholder. .          8.9     (11.5)               (2.6)
     Other. . . . . . . . . . . . . . . . .         11.5                          11.5
     Net cash - financing activities. . . .         48.7     (14.4)     (8.3)     26.0
     Effect of foreign currency exchange rate
       changes on cash and cash equivalents                              (.4)      (.4)
     Increase (decrease) in cash and
       cash equivalents:. . . . . . . . . .          8.9      (3.9)     (1.9)      3.1
     Beginning of period  . . . . . . . . .          2.8       8.7       2.7      14.2
     End of period  . . . . . . . . . . . .       $ 11.7    $  4.8    $   .8    $ 17.3

Year Ended December 31, 1996
     Net cash - operating activities. . . .       $(17.1)   $ 25.2    $  (.5)   $  7.6
     Investing activities
       Acquisition of LM. . . . . . . . . .         (7.3)                4.8      (2.5)
       Capital expenditures . . . . . . . .         (3.6)    (17.9)      (.8)    (22.3)
       Other. . . . . . . . . . . . . . . .           .2                  .1        .3
     Net cash - investing activities. . . .        (10.7)    (17.9)      4.1     (24.5)
     Financing activities
       Proceeds from borrowings . . . . . .          4.3       7.1                11.4
       Repayments of borrowing. . . . . . .          (.1)               (1.0)     (1.1)
       Dividends to minority shareholder. .          9.9     (12.7)               (2.8)
     Net cash - financing activities. . . .         14.1      (5.6)     (1.0)      7.5
     Effect of foreign currency exchange rate
       changes on cash and cash equivalents                               .1       0.1
     Increase in (decrease) cash and
       cash equivalents: . . . . . . . . . .       (13.7)      1.7       2.7      (9.3)
     Beginning of period . . . . . . . . . .        16.5       7.0                23.5
     End of period . . . . . . . . . . . . .      $  2.8    $  8.7    $  2.7    $ 14.2
</TABLE>

<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                    Condensed Statements of Cash Flows
                                                 Domestic     ABNB               Consol.
<S>                                               <C>       <C>                 <C>
Year Ended December 31, 1995
     Net cash- operating activities. . . . .      $(15.9)   $ 11.4              $ (4.5)
     Investing activities
       Capital expenditures. . . . . . . . .        (1.2)     (9.2)              (10.4)
       Proceeds from sales of assets . . . .         4.9                           4.9
       Other . . . . . . . . . . . . . . . .         (.6)                          (.6)
     Net cash - investing activities . . . .         3.1      (9.2)               (6.1)
     Financing activities
       Proceeds from borrowings. . . . . . .                   3.4                 3.4
       Other . . . . . . . . . . . . . . . .        (0.4)                         (0.4)
     Net cash - financing activities . . . .        (0.4)      3.4                 3.0
     Effect of foreign currency exchange rate
       changes on cash and cash equivalents                   (0.6)               (0.6)
     Increase (decrease) cash and
       cash equivalents: . . . . . . . . . .       (13.2)      5.0                (8.2)

     Beginning of period . . . . . . . . . .        29.7       2.0                31.7
     End of period . . . . . . . . . . . . .      $ 16.5    $  7.0              $ 23.5

+Includes investment in subsidiaries, which is eliminated in consolidation.
* After elimination of investment in subsidiaries.
</TABLE>

Note N - Commitments and Contingencies

     In January 1994, Vladimir v. United States Banknote Corporation, et al.,
and in February 1994, Sinay v. United States Banknote Corporation, et al.,
were filed in the United States District Court for the Southern District of
New York (the "Class Action"). On June 16, 1995, the Court approved
certification of a class in Vladimir consisting of all persons who purchased
stock in the open market from April 1, 1993 through January 6, 1994. On
February 26, 1996, the Court dismissed the Sinay action, without prejudice.
The parties reached a settlement in Vladimir prior to entry of a judgment and
ruling on the Company's and Mr. Weissman's pending Motions for Summary
Judgment, Judgment as a Matter of Law and for a new trial.  On September 30,
1997, the Court approved the settlement dismissing the action, with prejudice,
which became final on March 11, 1998. Under the terms of the settlement, the
Company's full contribution of $0.5 million was paid in December 1997 and the
balance paid by the Company's insurers.

     In January 1994, Atencio v. Morris Weissman, et al. was filed in the
Court of Chancery for the State of Delaware, New Castle County, against
various directors and/or officers of the Company, on behalf of a purported
class and derivatively on behalf of the Company. In February 1994, Rosenberg
v. Morris Weissman, et al. was filed in the same court. The Atencio and
Rosenberg actions assert claims for breach of fiduciary duty and allege the
sale of Common Stock while in possession of material non-public information.
These cases have not been actively pursued. As derivative actions, the
Company's insurers have been responsible for the costs of defending against
such actions.
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     On November 1, 1994, the Company filed an action against Thomas De La
Rue, AG ("DLR") and its parent, De La Rue Plc which is pending in the United
States District Court for the Southern District of New York. The complaint
alleges breach of contract in connection with the 1993 purchase of the
Company's Brazilian subsidiary from DLR and seeks approximately $1.5 million
in damages. DLR has asserted approximately $400,000 in counterclaims. On
September 17, 1997, the Court denied DLR's motions for summary judgment,
ruling the contract language ambiguous, and directed as an issue for the jury
whether the Company may pierce the corporate veil and proceed with its claims
against DLR and DLR's parent, De La Rue, Plc.

    On November 2, 1994, Thomas De La Rue AG v. United States Banknote
Corporation, et al. was commenced in the United States District Court for the
Southern District of New York. DLR alleges, among other things, breach of
contract in connection with the Brazil purchase agreement and the alleged
failure to expeditiously register 944,538 shares of Company Common Stock
issued to DLR. DLR seeks approximately $4.0 million in connection with its
claims. A trial has been scheduled for June 1998.

     During the year ended December 31, 1996, the Company recorded a $2.4
million provision relating to pending litigation. The Company's cost of
settlement of the Vladimir litigation and certain legal fees have been charged
against the provision during 1997.

     The Company and its subsidiaries are also parties to various additional
lawsuits (as both plaintiff and defendant) related to various matters in the
normal course of business, including patent infringement, contract, labor and
environmental, which in the opinion of management, are not anticipated to have
a material impact on its consolidated financial position or results of
operations.

     During 1997, ABNB received assessments form the Brazilian tax authorities
for approximately $25 million relating to taxes other than income.  The
Company is appealing the assessments, believes it has grounds for appeal, and
has not recorded a provision for these assessments.  Management of the Company
believes that the ultimate resolution of these assessments will not have a
material impact on its consolidated financial position or results of
operations.

The Company has long-term operating leases for offices, manufacturing
facilities and equipment which expire through 2007.  The Company has renewal
options on some locations, which provide for renewal rents based upon
increases tied to the consumer price index.

Net rental expense was $15.8 million, $7.7 million and $8.0 million for the
years ended December 31, 1997, 1996 and 1995, respectively.

At December 31, 1997, future minimum lease payments under noncancelable
operating leases are as follows: $13.9 million in 1998; $10.3 million in 1999;
$8.3 million in 2000; $6.9 million in 2001; $3.0 million in 2002; and $5.8
million thereafter.
<PAGE>
<PAGE>
AMERICAN BANKNOTE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note O - Quarterly Results of Operations - unaudited
                      (dollars in thousands, except per share data)
<TABLE>
<CAPTION>
    1997                            1st Qtr     2nd Qtr     3rd Qtr     4th Qtr
    <S>                             <C>         <C>         <C>         <C>
    Sales                           $81,096     $79,168     $88,152     $87,943
    Cost of sales                    55,371      52,457      58,435      63,549
    Extraordinary item                                                   (5,589)
    Net income (loss)(1)                117       2,139       2,367      (6,437)
    Per share income (loss) - Basic:
      Before extraordinary item     $   .01     $   .11     $   .12     $  (.05)
      Extraordinary item                                                   (.27)
      Net income                    $   .01     $   .11     $   .12     $  (.32)

    Per share income (loss) - Diluted:
      Before extraordinary item     $   .01     $   .10     $   .11     $  (.05)
      Extraordinary item                                                   (.27)
      Net income                    $   .01     $   .10     $   .11     $  (.32)
</TABLE>
<TABLE>
<CAPTION>
    1996                            1st Qtr     2nd Qtr     3rd Qtr     4th Qtr
    <S>                             <C>         <C>         <C>         <C>
    Sales                           $59,917     $70,764     $86,879     $91,890
    Cost of sales                    42,004      46,566      54,223      59,365
    Net income (loss)(2)               (802)      1,365       2,228       1,308
    Per share income (loss)
      Basic                         $  (.04)    $   .07     $   .11     $   .07
      Diluted                       $  (.04)    $   .07     $   .11     $   .06

(1)In the fourth quarter, pre tax income was charged $2.3 million ($1.5 million
net of tax) for certain treasury interest rate agreements.  In addition, the
fourth quarter of 1997 includes $1.1 million of interest income on the refund
of certain prior year tax deposits.  These transactions are classified within
other, net in the consolidated statement of operations.  Additionally, during
the first, second and fourth quarters approximately $0.7 million, $0.1 million
and $1.0 million of pre-tax liabilities no longer required were reversed.
Furthermore, for the nine months ended September 30, 1997, the effective income
tax rate reflected the reversal of $2.7 million of liabilities no longer
required.  For the fourth quarter of 1997, an additional $1.3 million of tax
liabilities no longer required were reversed.

(2) In the fourth quarter, pre-tax income was charged $2.4 million ($1.4
million net of tax) in connection with certain litigation (see Note N).  This
charge is classified within other, net in the consolidated statement of
operations.
</TABLE>
<PAGE>
<PAGE>


ITEM  9.    Changes in and Disagreements with Accountants on Accounting and
            Financial Disclosure

         None.
                                    PART III

ITEM 10.    Directors and Executive Officers of the Company

         See Item 13

ITEM 11.    Executive Compensation

         See Item 13

ITEM 12.    Security Ownership of Certain Beneficial Owners
            and Management

         See Item 13

ITEM 13.    Certain Relationships and Related Transactions

        Information required for Items 10, 11, 12 and 13 will be set forth
either (i) in the Company's definitive Proxy Statement for the 1997 Annual
Meeting of Stockholders, or (ii) in an amendment to this Report on Form 10-K/A,
which in either case will be filed with the Securities and Exchange Commission
not later than 120 days after December 31, 1997, and which information is
incorporated herein by reference.  In addition, reference is made to Item 10 in
Part I of this Report.

<PAGE>
<PAGE>


                                    PART IV

ITEM 14. Exhibits, Financial Statements, Schedules and Reports
         on Form 8-K

(a)(1)   List of Financial Statements.

         The following consolidated financial statements of
         American Banknote Corporation and subsidiaries
         are included in Item 8:

         Consolidated Statements of Operations - Years Ended
           December 31, 1997, 1996 and 1995

         Consolidated Balance Sheets - December 31, 1997 and 1996

         Consolidated Statement of Stockholders' Equity - Years Ended
           December 31, 1997, 1996 and 1995

         Consolidated Statements of Cash Flows - Years Ended
           December 31, 1997, 1996 and 1995

         Notes to Consolidated Financial Statements

(a)(2)   List of Financial Statement Schedules.

         The following schedules of American Banknote Corporation
         and subsidiaries are included in Item 14(d):

         Schedule I -
         Condensed Financial Information of Registrant -
           Year Ended December 31, 1997......................Page  S-1

         All other schedules for which provision is made in the
         applicable accounting regulation of the Securities and
         Exchange Commission are not required under the related
         instructions or are inapplicable, and therefore have
         been omitted.

(a)(3)   List of Executive Compensation Plans and Arrangements.

         Second Amended and Restated Employment Agreement dated as
         of October 1, 1993, between the Company, American Bank
         Note Company and Morris Weissman is incorporated herein
         by reference to Exhibit 10.1 to the Company's Annual
         Report on Form 10-K (as amended) for the year ended
         December 31, 1993 (the "1993 10-K").

         Employment Agreement dated July 24, 1990 between the
         Company and John T. Gorman is incorporated herein by
         reference to Exhibit (c)(32) to Amendment No. 3 to the
         Company's Rule 13E-3 Transaction Statement on Schedule
         13E-3 dated July 31, 1990 (the "Schedule 13E-3").
<PAGE>
<PAGE>


         Employment Agreement Amendment Number 2 dated September
         3, 1996 between the Company and John T. Gorman is
         incorporated herein by reference to Exhibit 10.1 to the
         Company's Quarterly Report on Form 10-Q for the quarter
         ended September 30, 1996.

         Form of Performance Warrants dated July 25, 1990, is
         incorporated herein by reference to Exhibit (c)(29) to
         the Company's Rule 13E-3 Transaction Statement on
         Schedule 13E-3 dated April 18, 1990.

         Amended and Restated 1990 Employee Stock Option Plan
         dated as of February 19, 1992 is incorporated herein by
         reference to Exhibit 10.37 to the Annual Report on Form
         10-K for the year ended December 31, 1991 (the "1991
         10-K").

         Amendment dated September 23, 1993 to Amended and
         Restated 1990 Employee Stock Option Plan dated as
         of February 19, 1992 is incorporated herein by reference
         to Exhibit 10.13 to the 1993 10-K.

         Supplemental Executive Retirement Plan ("SERP") of the
         Company effective as of April 1, 1994, is incorporated
         herein by reference to Exhibit 10.22 to Amendment No. 2
         to the Company's Registration Statement on Form S-4
         (File No. 33-79726) filed July 18, 1994.

         Amendments to SERP effective April 1, 1994 is hereby
         incorporated by reference to Exhibit 10.12 to the
         Annual Report on Form 10-K for the year ended
         December 31, 1995.

         Amendment to SERP effective July 1, 1997.

         Form of severance agreement for designated officers is
         incorporated herein by reference to Exhibit 10.25 to the
         Annual Report on Form 10-K for the year ended
         December 31, 1994 (the "1994 10-K").

         Long-Term Performance Plan for key employees is
         incorporated herein by reference to Exhibit 10.26 to
         the 1994 10-K.

         Executive Incentive Plan for executive officers, as
         amended, is incorporated herein by reference to Exhibit
         10.27 to the 1994 10-K.

<PAGE>
<PAGE>


         Deferred Stock and Compensation Plan for Non-employee
         Directors (as amended April 25, 1996) is incorporated
         herein by reference to Annex A of the Company's
         definitive Proxy Statement for the 1996 Annual Meeting
         of Stockholders, as filed with the Commission on
         Schedule 14A on May 6, 1996.

         Long Term Performance Plan and Executive Incentive
         Plan 1996 Challenge 2000 Criteria Schedule of vesting
         and unit valuation is incorporated herein by reference to
         Exhibit 10.13 to the Annual Report on Form 10-K for the year
         ended December 31, 1996 (the "1996 10-K").

         Amendment to Long-Term Performance Plan for Key
         employees adopted June 11, 1997 is incorporated herein
         by reference to Exhibit 10.1 to the September 30, 1997 10-Q.

(b)     Reports on Form 8-K.

          Form 8-K filed October 9, 1997   - Item 5 - Other Events
          Form 8-K filed October 24, 1997  - Item 5 - Other Events
          Form 8-K filed October 29, 1997  - Item 5 - Other Events
          Form 8-K filed November 4, 1997  - Item 5 - Other Events
          Form 8-K filed November 7, 1997  - Item 5 - Other Events
          Form 8-K filed November 10, 1997 - Item 5 - Other Events
          Form 8-K filed November 10, 1997 - Item 5 - Other Events
          Form 8-K filed November 17, 1997 - Item 5 - Other Events
          Form 8-K filed November 20, 1997 - Item 7 - Financial Statements,
                   Pro Forma Financial Information and Exhibits
          Form 8-K filed November 24, 1997 - Item 5 - Other Events
          Form 8-K filed December 2, 1997  - Item 5 - Other Events
          Form 8-K filed December 9, 1997  - Item 5 - Other Events
          Form 8-K filed December 10, 1997 - Item 5 - Other Events
          Form 8-K filed December 12, 1997 - Item 5 - Other Events
          Form 8-K filed January 9, 1998   - Item 5 - Other Events

(c)    Exhibits.

 2.1     Agreement of Plan of Merger and Certificate of Merger of
         United States Banknote Corporation (a New York  corporation)
         ("USBN-NY") and United States Banknote Corporation (a Delaware
         corporation) dated as of June 29, 1993 are incorporated herein
         by reference to Exhibits 2.1 and 2.2 to the Company's Quarterly
         Report on Form 10-Q for the quarter ended June 30, 1993.

 2.2     Certificate of Ownership and Merger of USBN-NY into the
         Company dated as of July 14, 1994 is incorporated herein
         by reference to Exhibit 3.1 to the Company's
         Registration of Successor Issuer on Form 8-B filed
         September 30, 1993 (the "Form 8-B").
<PAGE>
<PAGE>


 2.3     Certificate of Merger of USBN-NY into the Company dated
         as of July 14, 1994 is incorporated herein by reference
         to Exhibit 3.2 to the Form 8-B.

 3.1     Certificate of Incorporation of the Company including
         Amendment No. 1 thereto is incorporated herein by
         reference to Exhibit 3.1 to the Company's Quarterly
         Report on From 10-Q for the quarter ended
         June 30, 1995 (the "June 30, 1995 10-Q").

 3.2     Certificate of Designation of the Company authorizing
         Preferred Stock as Series A is incorporated herein by
         reference to Exhibit 4 to the Company's Report on Form 8-A
         filed April 6, 1994.

 3.3     Rights Agreement dated as of March 24, 1994 between
         the Company and Chemical Bank, N.A., as Rights Agent,
         including the form of Rights Certificate and form
         of Certificate of Designation is incorporated herein
         by reference to Exhibit 1 to the Company's Current
         Report on Form 8-K dated March 24, 1994.

 3.4     By-Laws of the Company including amendments thereto are
         incorporated herein by reference to Exhibit 3.2 to the
         June 30, 1995 10-Q.

 3.5     By-Laws of ABNB, as amended, are incorporated herein by
         reference to the Company's Current Report on Form
         8-K dated July 10, 1995.

 3.6     Certificate of Incorporation and By-Laws of subsidiaries is
         incorporated herein by to Exhibits 3.1(b) through (m) and
         Exhibits 3.2(b) through (m) to the Company's Registration
         Statement on Form S-4 (File No. 333-44069) filed
         January 12, 1998 (the"January 12, 1998 Form S-4").

 4.1     Indenture dated as of May 15, 1992 between the Company
         and Chemical Bank, as Trustee, relating to the 10-3/8%
         Senior Notes due June 1, 2002 is incorporated herein by
         reference to Exhibit 4.2 to the Company's Current
         Report on Form 8-K dated May 26, 1992 (the "May 26,
         1992 Form 8-K").

 4.2     Pledge Agreement, as amended, dated as of May 26, 1992
         between the Company and Chemical Bank, as Trustee,
         relating to the Company's 10-3/8% Senior Notes due June
         1, 2002 is incorporated herein by reference to Exhibit
         4.3 to the May 26, 1992 Form 8-K.
<PAGE>
<PAGE>


 4.3     First Supplemental Indenture to 10-3/8% Senior
         Notes due June 1, 2002 between the Company and Chemical
         Bank, N.A., dated as of May 23, 1994 is incorporated
         herein by reference to Exhibit 4.1 to the Company's
         Quarterly Report on Form 10-Q for the quarter ended
         June 30, 1994 (the "June 30, 1994 10-Q.")

 4.4     First Amendment to the Pledge Agreement dated as of May
         26, 1992 between the Company and Chemical Bank, N.A.,
         dated as of May 23, 1994 is incorporated herein by
         reference to Exhibit 4.2 to the June 30, 1994 Form 10-Q.

 4.5     Pledged Share Amendment dated as of June 23, 1993
         between the Company and Chemical Bank, N.A., as Trustee,
         relating to the 10-3/8% Senior Notes due June 1, 2002. *

 4.6     Pledged Share Amendment dated as of July 19,1993
         between the Company and Chemical Bank, N.A., as Trustee,
         relating to the 10-3/8% Senior Notes due June 1, 2002. *

 4.7     Pledged Share Amendment dated as of August 1, 1994
         between the Company and Chemical Bank, N.A., as Trustee,
         relating to the 10-3/8% Senior Notes due June 1, 2002. *

 4.8     Pledged Share Amendment dated as of July 31, 1995
         between the Company and Chemical Bank, N.A., as Trustee,
         relating to the 10-3/8% Senior Notes due June 1,
         2002 is incorporated herein by reference to Exhibit 4.5
         to the Company's Annual Report on Form 10-K for the
         year ended December 31, 1995 (the "1995 10-K").

 4.9     Pledged Share Amendment dated as of August 15, 1997
         between the Company and Chemical Bank, N.A., as Trustee,
         relating to the 10-3/8% Senior Notes due June 1, 2002. *

 4.10    Pledged Share Amendment dated as of August 27, 1997
         between the Company and Chemical Bank, N.A., as Trustee,
         relating to the 10-3/8% Senior Notes due June 1, 2002. *

 4.11    Pledged Share Amendment dated as of December 1, 1997
         between the Company and Chemical Bank, N.A., as Trustee,
         relating to the 10-3/8% Senior Notes due June 1, 2002. *

 4.12    Pledged Share Amendment dated as of December 11, 1997
         between the Company and Chemical Bank, N.A., as Trustee,
         relating to the 10-3/8% Senior Notes due June 1, 2002. *

 4.13    Pledged Share Amendment dated as of December 23, 1997
         between the Company and Chemical Bank, N.A., as Trustee,
         relating to the 10-3/8% Senior Notes due June 1, 2002. *
<PAGE>
<PAGE>


 4.14    Indenture dated as of May 1, 1994 between the Company
         and The First National Bank of Boston, as Trustee,
         relating to the 11-5/8% Senior Notes Due August 1,
         2002, Series B, of the Company and Form of Series B
         Note, is incorporated herein by reference to Exhibit
         4.1 and 4.3 to the Company's Registration Statement on
         Form S-4 (File No. 33-79726) dated August 5, 1994.

 4.15    First Supplement dated as of October 8, 1997 to the Indenture
         dated as of May 1, 1994 between the Company and State Street
         Bank & Trust Company (as successor to First National Bank of
         Boston), as Trustee, relating to the 11 5/8% Senior Notes due
         August 1, 2002, Series B. is incorporated herein by
         reference to Exhibit 4.5 to the January 12, 1998 Form S-4.

 4.16    Indenture for the 11 1/4% Senior Subordinated Notes due 2007,
         Series A (the "Old Notes") and 11 1/4% Senior Subordinated
         Notes due 2007, Series B (the "Exchange Notes"), dated as of
         December 12, 1997 among the Company, the Guarantors (the
         Guarantors under the Indenture were American Bank Note Company,
         ABN Securities Systems, Inc., Horsham Holding Company, Inc.,
         American Bank Note Holographics, Inc., American Banknote
         Card Services, Inc., American Banknote Merchant Services,
         Inc., ABN Investments, Inc., ABN Equities Inc., American
         Banknote Australasia Holdings, Inc., ABN Government Services,
         Inc., USBC Capital Corp. and ABN CBA, Inc.) and The Bank
         of New York, as trustee is incorporated herein by reference
         to Exhibit 4.1 of the January 12, 1998 Form S-4.

 4.17    Forms of Guarantee (included in Exhibit 4.16) are
         incorporated herein by reference to Exhibit 4.4 to the
         January 12, 1998 Form S-4.

 4.18    Credit Agreement dated as of January 29, 1996 among
         American Bank Note Company and American Bank Note
         Holographics, Inc.,the Company and Chemical Bank, N.A.
         as Agent and Lender, is incorporated herein by reference to
         Exhibit 4.8 to the 1995 10-K.

 4.19    Waiver and Amendment to Credit Agreement dated as of
         September 30, 1996 among American Bank Note Company
         and American Bank Note Holographics, Inc., the Company,
         and The Chase Manhattan Bank (formerly Chemical Bank
         N.A.), as Agent and Lender, is incorporated herein by reference
         to Exhibit 4.1 to the Company's Quarterly Report on
         Form 10-Q for the quarter ended September 30, 1996
         (the "September 30, 1996 10-Q").

 4.20    Security Agreement dated as of January 29, 1996, among
         American Bank Note Company and American Bank Note
         Holographics, Inc. and Chemical Bank, N.A., as Agent,
         is incorporated herein by reference to Exhibit 4.9 to
         the 1995 10-K.
<PAGE>
<PAGE>


 4.21    Waiver and Amendment to Credit Agreement dated as of
         March 25, 1997, among American Bank Note Company and
         American Bank Note Holographics, Inc., American Banknote
         Corporation and The Chase Manhattan Bank), as Agent and
         Lender is incorporated herein by reference to Exhibit 4.11
         to the Company's Annual Report on Form 10-K for the
         year ended December 31, 1996 (the "1996 10-K").

 4.22    Amendment to Credit Agreement dated as of April 14, 1997
         among American Bank Note Company and American Bank Note
         Holographics, Inc., the Company and The Chase Manhattan
         Bank as Agent and Lender is incorporated herein by reference
         to Exhibit 4.1 to the Company's Quarterly Report on
         Form 10-Q for the quarter ended March 31, 1997.

 4.23    Amendment to Credit Agreement dated as of July 1, 1997
         among American Bank Note Company and American Bank Note
         Holographics, Inc., the Company and The Chase Manhattan
         Bank as Agent and Lender is incorporated herein by reference
         to Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q
         for the quarter ended June 30, 1997 (the "June 30, 1997 10-Q").

 4.24    Amendment to Credit Agreement dated as of November 14, 1997
         among American Bank Note Company and American Bank Note
         Holographics, Inc., the Company and The Chase Manhattan Bank
         as Agent and Lender is incorporated herein by reference to
         Exhibit 4.1 to the Company's Quarterly Report on Form 10-Q for
         the quarter ended June 30, 1997 (the "September 30, 1997 10-Q").

 4.25    Amendment to Credit Agreement, dated December 3, 1997,
         among American Bank Note Company and American Bank Note
         Holographics, Inc., the Company, and The Chase Manhattan Bank,
         as Agent and Lenders is incorporated herein by reference to
         Exhibit 10.5 to the Company's Current Report on Form 8-K dated
         December 10, 1997 (the "December 10, 1997 Form 8-K").

 4.26    Zero Coupon Convertible Subordinated Debenture dated
         July 24, 1997 is incorporated herein by reference to Exhibit 2.1
         to the June 30, 1997 10-Q.

 4.27    Securities Purchase Agreement by and among American
         Banknote Corporation, RGC International Investors, dated
         as of July 24, 1997.  *

 4.28    Forms of Warrant to purchase 140,00 shares and 75,000 shares
         of common stock of American Banknote Corporation, dated as
         of July 24, 1997. *
<PAGE>
<PAGE>


 4.29    Securities Purchase Agreement by and among the Company,
         RGC International Investors, LDC and Halifax Fund, L.P.,
         dated as of November 25, 1997 is incorporated herein by
         reference to Exhibit 10.1 to the December 10, 1997
         Form 8-K.

 4.30    Zero Coupon Convertible Subordinated Debenture, Form of
         Warrant to purchase 150,000 shares of common stock of the
         Registration Rights Agreement by and among the Company,
         RGC International Investors, LDC and Halifax Fund, L.P.,
         dated November 25, 1997 is incorporated herein by reference to
         Exhibits 10.2, 10.3 and 10.4 to the December 10, 1997 Form 8-K.

10.1     Second Amended and Restated Employment Agreement dated
         as of October 1, 1993, between the Company, American
         Bank Note Company and Morris Weissman is incorporated
         herein by reference to Exhibit 10.1 to the Company's
         Annual Report on From 10-K (as amended) for the year
         ended December 31, 1993 (the "1993 10-K").

10.2     Employment Agreement dated July 24, 1990 between the
         Company and John T. Gorman is incorporated herein by
         reference to Exhibit (c)(32) to Amendment No. 3 to the
         Company's Rule 13E-3 Transaction Statement on Schedule
         13E-3 dated July 31, 1990 (the "Schedule 13E-3").

10.3     Employment Agreement Amendment Number 2 dated September
         3, 1996 between the Company and John T. Gorman is
         incorporated herein by reference to Exhibit 10.1 to
         the September 30, 1996 10-Q.

10.4     Form of Performance Warrants dated July 25, 1990, is
         incorporated herein by reference to Exhibit (c)(29) to
         the Company's Rule 13E-3 Transaction Statement on
         Schedule 13E-3 dated April 18, 1990.

10.5     Amended and Restated 1990 Employee Stock Option Plan
         dated as of February 19, 1992 is incorporated herein by
         reference to Exhibit 10.37 to the Annual Report on
         Form 10-K for the year ended December 31, 1991.

10.6     Amendment dated September 23, 1993 to Amended and
         Restated 1990 Employee Stock Option Plan dated as of
         February 19, 1992, is incorporated herein by reference
         to Exhibit 10.13 to the 1993 10-K.

10.7     Supplemental Executive Retirement Plan ("SERP") of the
         Company effective as of April 1, 1994, is incorporated
         herein by reference to Exhibit 10.22 to Amendment
         No. 2 to the Company's Registration Statement on Form
         S-4 (File No. 33-79726) filed July 18, 1994.
<PAGE>
<PAGE>


10.8     Amendments to SERP effective April 1, 1994 is
         incorporated herein by reference to Exhibit 10.12
         to the 1995 10-K.

10.9     Amendment to SERP effective July 1, 1997. *

10.10    Form of severance agreement for designated officers is
         incorporated herein by reference to Exhibit 10.25 to the
         Company's Annual Report on Form 10-K for the
         year ended December 31, 1994 (the "1994 10-K").

10.11    Long-Term Performance Plan for Key employees is
         incorporated herein by reference to Exhibit 10.26 to
         the 1994 10-K.

10.12    Executive Incentive Plan for executive officers, as
         amended, is incorporated herein by reference to Exhibit
         10.27 to the 1994 10-K.

10.13    Deferred Stock and Compensation Plan for Non-employee
         Directors (as amended April 25, 1996) is incorporated
         herein by reference to Annex A of the Company's
         Definitive Proxy Statement for the 1996 Annual Meeting
         of Stockholders as filed with the Commission on May 6,
         1996, is incorporated herein by reference to
         Exhibit 10.26 to the 1994 10-K.

10.14    Long Term Performance Plan and Executive Incentive
         Plan 1996 Challenge 2000 Criteria Schedule of vesting
         and unit valuation is incorporated herein by reference to
         Exhibit 10.13 to the 1996 10-K.

10.15    Amendment to Long-Term Performance Plan for Key
         employees adopted June 11, 1997 is incorporated herein
         by reference to Exhibit 10.1 to the September 30, 1997 10-Q.

10.16    Sublease dated January 31, 1996 between Grow Group, Inc.
         and the Company for the Company's headquarters at 200
         Park Avenue, New York is incorporated herein by
         reference to Exhibit 10.17 to the 1995 10-K.

10.17    Real Estate Rental Agreement, dated February 29, 1996,
         between Walter Torre Junior LTDA. And American Bank Note
         Company Grafica E Servicos Ltda for property located in
         Barueri, Sao Paulo, Brazil is incorporated herein by
         reference to Exhibit 10.18 to the 1995 10-K.

10.18    Agreement of Lease, dated as of July 23, 1992, between
         Robert Martin Company and American Banknote
         Holographics, Inc. is incorporated herein by reference
         to Exhibit 10.17 to the Company's Annual Report on
         form 10-K for the year ended December 31, 1992.
<PAGE>
<PAGE>


10.19    Contract dated September 4, 1995 with Telecomunicacoes
         Brasileiras S.A. (Telebras) is incorporated herein
         by reference to Exhibit 10.26 to the 1995 10-K.

10.20    Agreement for Services, effective October 1, 1995 between
         Kelly, Anderson, Pethick & Associates, Inc. and the
         Company is incorporated herein by reference to Exhibit
         10.2 to the Company's quarterly report on Form 10-Q
         for the quarter ended September 30, 1995.

10.21    Alfred Teo Director's Agreement dated April 30, 1996 is
         incorporated herein by reference to Exhibit 10.20 to the
         1996 10-K.

10.22+   Shareholder and Subscription Agreement between, American
         Banknote Australasia Holdings, Inc., Leigh-Mardon Pty
         Limited and American Banknote Australasia Limited dated
         June 3, 1996 is incorporated herein by reference to
         Exhibit 2.1 to the Company's Current Report on Form 8-K
         dated June 3, 1996 (the "June 3, 1996 Form 8-K").

10.23+   Senior Debt Facility Agreement dated June 3, 1996 between
         American Banknote Australasia Limited, ABN Holdings Pty
         Ltd, ABN Pacific Pty Ltd, ABN Security Pty Ltd, ABN New
         Zealand Limited, Dresdner Australia Limited, Societe
         Generale Australia Limited, AIDC Limited, ABN AMRO
         Australia Limited, Bankers Trust Australia Limited, BT
         Management Services Pty Limited, is incorporated herein
         by reference to Exhibit 2.2 to the June 3, 1996 Form 8-K.

10.24+   Subordinated Debt Facility Agreement dated June 3, 1996
         between American Banknote Australasia Limited, Amcor
         Investments Pty Limited and ABN Holdings Pty Ltd, ABN
         Pacific Pty Ltd, ABN Security Pty Ltd, ABN New Zealand
         Limited, is incorporated herein by reference to Exhibit
         2.3 to the June 3, 1996 Form 8-K.

10.25+   Australian Sale Agreement between Leigh-Mardon Pty
         Limited, ABN Security Pty Ltd , ABN Holdings Pty Ltd ,
         ABN Pacific Pty Ltd, Containers Pty Limited and
         American Banknote Australasia Limited dated April 10,
         1996 is incorporated herein by reference to
         Exhibit 2.4 to the June 3, 1996 Form 8-K.

10.26+   Master Agreement between Leigh-Mardon Pty Limited
         Containers Packaging (N.Z.) Limited, Kiwi Packaging
         (Cartons) Limited, Leigh-Mardon (NZ)Limited, ABN
         Security Pty Ltd ABN Holdings Pty Ltd, ABN Pacific Pty
         Ltd, ABN New Zealand Limited, American Banknote
         Australasia Limited and Containers Pty Limited dated
         April 10,1996 is incorporated herein by reference to
         Exhibit 2.5 to the June 3, 1996 Form 8-K.
<PAGE>
<PAGE>


10.27    Share Sale and Exit Deed dated November 1, 1996 between
         Leigh-Mardon Pty Limited, Containers Packaging (N.Z.)
         Limited Kiwi Packaging (Cartons) Limited, Leigh-Mardon
         (NZ) Limited, ABN Security Pty Ltd, ABN Holdings Pty Ltd
         and ABN Pacific Pty Ltd ABN New Zealand Limited,
         American Banknote Australasia Limited, Containers Pty
         Limited, American Banknote Australasia Holdings Inc.,
         Amcor Investments Pty Limited is incorporated herein
         by reference to Exhibit 2 to the Company's Current
         Report on form 8-K dated, November 14, 1996 Form 8-K
         (the "November 14, 1996 8-K").

10.28    Share Mortgage between Leigh-Mardon Pty Limited
         (Mortgagee) and American Banknote Australasia Holdings
         Inc (Mortgagor) Share Mortgage is incorporated herein
         by reference to Exhibit 3 to the November 14, 1996 8-K.

10.29    Contract dated June 2, 1995 with Banco Bradesco S.A.
         for printing services.    *

10.30    Contracts dated November 28, 1997 for the production of
         stored-value telephone cards with the following
         telephone companies in Brazil: Telecomunicac Es Do Esp
         Rito Santo - Telest Telecomunicacoes De Roraima S/a -
         Telelaima Telecomunicacoes De Alagoas S/a - Telasa
         Telecomunicacoes De Mato Grosso Do Sul S/a - Telems
         Telecomunicacoes Do Rio De Janeiro S/a - Telerj
         Telecomunicacoes De Rondonia S/a - Teleron

21       Subsidiaries of the Registrant.  *

23.1     Consent of Deloitte & Touche LLP.  *

23.2     Consent of KPMG.  *

27       Article 5 Financial Data Schedule. *


*    Filed herewith

+    Portions deleted pursuant to grant of Confidential Treatment pursuant to
Rule 246-2 of the Securities Exchange Act of 1934.

<PAGE>
<PAGE>


SIGNATURES

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

AMERICAN BANKNOTE CORPORATION
Registrant

 s/ Morris Weissman
 Morris Weissman
 Chairman and Chief Executive Officer
 March 30, 1998

 s/ John T. Gorman
 John T. Gorman
 Executive Vice President,
 Chief Financial Officer
 and Chief Accounting Officer
 March 30, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Company and in
the capacities and on the dates indicated:

 s/ Morris Weissman
 Morris Weissman
 Director, Chairman and
 Chief Executive Officer
 March 30, 1998

 s/ Bette B. Anderson                  s/ Ira J. Hechler
 Bette B. Anderson                     Ira J. Hechler
 Director                              Director
 March 30, 1998                        March 30, 1998

                                       s/ David S. Rowe-Beddoe
 Dr. Oscar Arias S                     David S. Rowe-Beddoe
 Director                              Director
 March 30, 1998                        March 30, 1998

 s/ C. Gerald Goldsmith                s/  Alfred S. Teo
 C. Gerald Goldsmith                   Alfred S. Teo
 Director                              Director
 March 30, 1998                        March 30, 1998


<PAGE>
<PAGE>



 CONDENSED FINANCIAL INFORMATION OF REGISTRANT - continued       SCHEDULE I
 <TABLE>
 <CAPTION>
 AMERICAN BANKNOTE CORPORATION
 BALANCE SHEET
 December 31, 1997
 (Dollars in thousands, except share data)

 <S>                                                      <C>
 ASSETS
 Current assets:
   Cash and cash equivalents . . . . . . . . . . . . .    $  9,859
   Receivables and other assets  . . . . . . . . . . .          33
                                                          --------
       Total current assets  . . . . . . . . . . . . .       9,892
 Investments in subsidiaries . . . . . . . . . . . . .     209,612
 Due from subsidiaries - net . . . . . . . . . . . . .      34,424
 Deferred taxes  . . . . . . . . . . . . . . . . . . . .    28,178
 Other assets. . . . . . . . . . . . . . . . . . . . .       8,299
                                                          --------
                                                          $290,406
                                                          ========
 LIABILITIES AND STOCKHOLDER'S EQUITY
 Current liabilities:
  Current maturities of long-term debt. . . . . . . .     $    975
  Accrued expenses and other current liabilities. . .        3,979
                                                          --------
       Total current liabilities . . . . . . . . . . .       4,954
 Long-term debt - net (note) . . . . . . . . . . . . .     228,209
 Other liabilities . . . . . . . . . . . . . . . . . .       2,202
 Stockholders' equity
   Preferred Stock, authorized 5,000,000 shares,
     no shares issued or outstanding
   Zero Coupon Convertible Subordinated Debentures . .       8,326
   Common Stock, par value $.01 per share,
     authorized 50,000,000 shares; issued
     21,134,769 shares . . . . . . . . . . . . . . . .         211
   Capital surplus . . . . . . . . . . . . . . . . . .      74,713
   Retained-earnings (deficit) . . . . . . . . . . . .     (23,282)
   Treasury stock, at cost (281,000 shares). . . . . .      (1,253)
   Cumulative currency translation adjustment. . . . .      (3,674)
                                                          --------
                    Total stockholders' equity . . . .      55,041
                                                          --------
                                                          $290,406
                                                          ========

 Note- The aggregate maturities of long-term debt is approximately
       as follows: 1998 - $1.0 million; 2000 - $31.6 million;
       2001 - $31.6 million; 2002 - $71.3 million; and
       2007 - $95.0 million.
    Also see Note H of Notes to Consolidated Financial Statements.
 </TABLE>

                                         S - 1
<PAGE>
<PAGE>


CONDENSED FINANCIAL INFORMATION OF REGISTRANT - continued       SCHEDULE I
 <TABLE>
 <CAPTION>
 AMERICAN BANKNOTE CORPORATION
 STATEMENT OF OPERATIONS
 FOR THE YEAR ENDED DECEMBER 31, 1997
 (Dollars in thousands)



 <S>                                                      <C>
 Equity in net earnings of subsidiaries:
   Dividends received  . . . . . . . . . . . . . . . .    $  8,913
   Undistributed earnings  . . . . . . . . . . . . . .       8,184
                                                          --------
                                                            17,097

 Costs and expenses. . . . . . . . . . . . . . . . . .        (643)

 Interest expense. . . . . . . . . . . . . . . . . . .     (24,436)

 Interest and other income - net . . . . . . . . . . .         196
                                                          --------
 Loss before income tax benefit and
   extraordinary item  . . . . . . . . . . . . . . . . .    (7,786)

 Income tax benefit. . . . . . . . . . . . . . . . . . .    11,626
                                                          --------
 Income before extraordinary item  . . . . . . . . . . .     3,840

 Extraordinary item - early extinguishment of debt,
  net of tax benefit. . . . . . . . . . . . . . . . . .     (5,589)
                                                          --------
 Net loss . . . . . . . . . . . . . . . . . . . . . . .   $ (1,749)
                                                          ========
 </TABLE>


                                         S - 2
<PAGE>
<PAGE>


CONDENSED FINANCIAL INFORMATION OF REGISTRANT - concluded       SCHEDULE I
 <TABLE>
 <CAPTION>
 AMERICAN BANKNOTE CORPORATION
 STATEMENT OF CASH FLOWS
 FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in thousands)



 <S>                                                       <C>
 Operating Activities:
   Income before extraordinary item  . . . . . . . . . .   $  3,840
   Adjustments to reconcile income to net
      cash provided by operating activities:
     Items not requiring (providing) cash:
       Unremitted earnings of subsidiaries . . . . . . .     (8,184)
       Deferred taxes  . . . . . . . . . . . . . . . . .    (11,626)
       Depreciation and amortization . . . . . . . . . .      1,262
   Changes in operating assets and liabilities:
      Marketable securities. . . . . . . . . . . . . . .      1,920
      Receivables and other assets . . . . . . . . . . .       (327)
      Accounts payable and accrued expenses  . . . . . .     (4,650)

                                                           --------
 Net cash used in by
   operating activities  . . . . . . . . . . . . . . . .    (17,765)
                                                           --------
 Investing Activities:
   Acquisitions of subsidiaries  . . . . . . . . . . . .       (464)
                                                            -------

 Financing Activities:
   Due from subsidiaries         . . . . . . . . . . . .     (7,077)
   Payment of long-term debt . . . . . . . . . . . . . .     (3,755)
   Proceeds from zero coupon subordinated
     convertible debentures
       (net of related expenses of $450) . . . . . . . .      9,550
   Proceeds from financing:
     11-1/4% Senior Subordinated Notes,
       (net of related expenses of $4,389) . . . . . . .     89,411
     Warrants  . . . . . . . . . . . . . . . . . . . . .      1,200
   Redemption of 11 5/8% Notes . . . . . . . . . . . . .    (62,417)
   Other . . . . . . . . . . . . . . . . . . . . . . . .        718
                                                           --------
 Net cash provided by financing activities . . . . . . .     27,630
                                                           --------
 Increase in cash and cash equivalents . . . . . . . . .      9,401
 Cash and cash equivalents - beginning of year . . . . .        458
                                                           --------
 Cash and cash equivalents - end of year . . . . . . . .   $  9,859
                                                           ========
 Interest paid ......................................      $ 23,092
 Income taxes paid ..................................      $      0
</TABLE>
                                      S - 3
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