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, 1998

                                       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 1-3521

                                  ARISTAR, INC.
             (Exact name of registrant as specified in its charter)

             DELAWARE                                      95-4128205
   (State or other jurisdiction of                     (I.R.S. Employer
    incorporation or organization)                  Identification Number)
    8900 Grand Oak Circle, Tampa, FL                       33637-1050
   (Address of principal executive offices)                (Zip Code)

                                 (813) 632-4500
              (Registrant's telephone number, including area code)

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

                                                        Name of each exchange
         Title of each class                            on which registered

 7 3/4 % Senior Notes due June 15, 2001                New York Stock Exchange
 7 1/2 % Senior Subordinated Notes due July 1, 1999    New York Stock Exchange

 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 (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                     Yes X                        No

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  the  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:

                                 Not applicable

The aggregate  market value of Common Stock held by  non-affiliates:  None As of
February 28, 1999, there were 1,000 shares of Common Stock outstanding.

Documents incorporated by reference:              None

Registrant meets the conditions set forth in General  Instruction  (I)(1)(a) and
(b) of Form 10-K and is therefore  filing this Form with the reduced  disclosure
format.

<PAGE> 2



                                  ARISTAR, INC.

                           ANNUAL REPORT ON FORM 10-K


                                Table of Contents



                                                                            Page
                                            PART I


Item 1.        Business........................................................3
Item 2.        Properties.....................................................11
Item 3.        Legal Proceedings..............................................11


                                            PART II

Item 5.        Market for the Registrant's Common Equity
                  and Related Stockholder Matters.............................12
Item 7.        Management's Analysis of the Results of Operations
                  for the Year Ended December 31, 1998........................12
Item 8.        Financial Statements and Supplementary Data....................19
Item 9.        Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure.........................41

                                            PART IV

Item 14.       Exhibits, Financial Statement Schedules and
                  Reports on Form 8-K.........................................41


Note:  Items 4, 6, 10, 11, 12 and 13 are not included as per  conditions  met by
       Registrant set forth in General Instruction I(1)(a) and (b) of Form 10-K.

<PAGE> 3


                                     PART I

Item 1.   Business

Aristar,  Inc. (the "Company"),  incorporated in Delaware in 1986 as a successor
to a company incorporated in 1927, is a holding company  headquartered in Tampa,
Florida  whose  subsidiaries  are  engaged in the  consumer  financial  services
business.  All of the  Company's  equity  securities  are  owned  indirectly  by
Washington Mutual, Inc. ("Washington Mutual").

The Company's  operations consist  principally of a network of approximately 500
branch offices  located in 24 states,  primarily in the Southeast and Southwest.
These offices generally operate under the names Blazer Financial Services,  City
Finance Company and First Community  Financial  Services.  The Company's  branch
offices are generally  located in small to medium-sized  communities in suburban
or rural areas and are managed by individuals  who generally  have  considerable
consumer lending experience. The primary market for the Company's consumer loans
consists of households with an annual income of $30,000 to $60,000.

The Company makes consumer  loans,  both real estate secured and unsecured,  and
purchases  retail  sales  contracts  from  local  retail  establishments.  These
consumer  credit  transactions  are primarily for personal,  family or household
purposes.  The Company also provides  consumer  financial  services  through its
industrial  banking  subsidiary  branches in Colorado  and Utah.  In addition to
making  consumer loans and purchasing  retail sales  contracts,  this subsidiary
also takes customers' savings deposits (insured by the Federal Deposit Insurance
Corporation ("FDIC")).

The Company is managed along two major lines of business:  consumer  finance and
consumer banking. The financial  performance of these business lines is measured
by the  Company's  profitability  reporting  processes,  which  utilize  various
management  accounting  techniques to ensure that both business line's financial
results reflect the underlying performance of that business.

Consumer  loans are  originated by customer  application  throughout  the branch
network.  Loan  originations  are  a  result  of  business  development  efforts
consisting of direct mail, telemarketing and branch office sales personnel.

Personal  loans are typically  unsecured  and primarily  used by the customer to
make specific purchases of consumer goods or personal debt consolidation.  As of
December  31,  1998  and  1997,  the  average  balance  of a  personal  loan was
approximately $2,100 and $1,800, respectively.

Real estate loans are  typically  secured by first or second  mortgages  and are
primarily used by the customer for debt  consolidation.  The Company has focused
on high growth in this segment of the portfolio due to the high quality inherent
in the customer  base.  This is a result of the fact that the primary  source of
these loans is the portion of the existing  personal and sales contract customer
base which has maintained a high level of payment  performance  over an extended
period of time.  In addition,  the larger  average  balances make this loan type
more cost effective to originate and service.  As of December 31, 1998 and 1997,
the average balance of a real estate secured loan was approximately  $26,600 and
$24,500,  respectively.  

Retail  sales  contracts  are  generally   acquired   without  recourse  to  the
originating  merchant and provide a vehicle for developing future loan business.
Where  these  contracts  result  from the sale of  consumer  goods,  payment  is
generally  secured by such goods.  Retail  installment  contracts  are generally
acquired  through the originating  merchant;  the Company had such  arrangements
with over 3,000 merchants at December 31, 1998.  Contracts are typically written
with  original  terms from 3 to 60 months  and for 1998 had an average  original
term of 27 months. A portion of the Company's retail  installment  contracts are
"same as cash".  This  provides a period during which the customer is allowed to
pay the account balance in full without interest charges. The Company recognizes
interest income only on the portion of these receivables which it estimates will
not  exercise  the "same as cash"  option.  At December  31, 1998 and 1997,  the
average balance of a retail sales contract was $800 and $750, respectively.
<PAGE> 4


Consumer  loans written in 1998 had original terms ranging from 12 to 360 months
and averaged 63 months.  As of December 31, 1998,  45.0% of the Company's  total
portfolio  was either  unsecured  or secured by  automobiles  or other  personal
property  ("personal  loans") and 43.6% of the  Company's  total  portfolio  was
secured by real estate.  In 1997,  these loan types comprised 44.0% and 42.0% of
the  portfolio,  respectively.  This  change  in  portfolio  mix is a result  of
management's focus on growth in these higher margin components of the portfolio.
While the interest  yield on real estate  secured loans is generally  lower than
for other  installment  loans,  such loans are typically larger and the ratio of
cost to amounts loaned is lower.  Additionally,  credit loss  experience on real
estate  secured  loans has been  significantly  lower than on other loan  types.
During 1998,  personal loans  (excluding  unearned  finance charges and deferred
loan fees) increased $134.5 million,  or 13.1%, as compared to $85.9 million, or
9.2%, in 1997. Also during 1998, real estate secured loans  (excluding  unearned
finance charges and deferred loan fees) increased  $145.1 million,  or 14.8%, as
compared to $97.6  million,  or 11.1%,  in 1997.  This growth was achieved while
improving the net interest spread by 69 basis points over the prior year.

The  following  table  sets forth the  Company's  loan  originations,  including
renewals, for the periods indicated:

<TABLE>

                                           Year Ended December 31,
(Dollars in thousands)                  1998             1997            1996
                                 -----------     ------------     -----------

<S>                             <C>              <C>             <C>         
Real estate secured loans       $    699,175     $    490,522    $    453,821
Personal loans                     1,398,278        1,283,553       1,090,601
Retail sales contracts               379,885          409,409         451,274
                                ------------     ------------     -----------
                                $  2,477,338      $ 2,183,484    $  1,995,696
                                ============     ============    ============

</TABLE>

<PAGE> 5


Portfolio Composition

The  following  table  provides an analysis  by type of the  Company's  consumer
finance receivables  (excluding unearned finance charges and deferred loan fees)
at the dates shown:
<TABLE>

                                                         December 31,
(Dollars in thousands)                       1998             1997          1996
                                      -----------      -----------    ----------

Notes and contracts receivable:
<S>                                   <C>              <C>            <C>       
  Amount                              $ 2,574,398      $ 2,328,715    $2,193,147
  Number of accounts                      966,048        1,029,532     1,064,142
Type as a percent of
  total receivables
    Real estate secured loans                43.6%            42.0%         40.7%
    Personal loans                           45.0             44.0          42.6
    Retail sales contracts                   11.4             14.0          16.7
                                      -----------      -----------    ----------
                                            100.0%           100.0%      100.0%
                                      ===========     ============   ==========

</TABLE>

At December 31, 1998,  the average  portfolio  yield written by loan type was as
follows:

                                             Average Yield

        Real estate secured loans                    12.7%
        Personal loans                               25.1%
        Retail sales contracts                       19.0%

The following  table sets forth the percentage of consumer  finance  receivables
(excluding unearned finance charges and deferred loan fees) by state at December
31, 1998.

State                        %               State                         %
-----                     ----               -----                      ----
Alabama                   3.7%               Mississippi                4.3%
California                6.0%               New Mexico                 1.2%
Colorado                  9.2%               North Carolina             9.0%
Delaware                  2.9%               Oklahoma                   3.1%
Florida                   4.2%               Oregon                     0.8%
Georgia                   2.7%               Pennsylvania               2.8%
Idaho                     1.2%               South Carolina             5.7%
Illinois                  0.5%               Tennessee                  10.6%
Kansas                    0.2%               Texas                      13.4%
Kentucky                  2.1%               Utah                       2.7%
Louisiana                 4.9%               Virginia                   5.1%
Maryland                  1.8%               West Virginia              1.9%

Geographic   diversification  of  consumer  finance   receivables   reduces  the
concentration of credit risk associated with a recession in any one region.


<PAGE> 6


Credit Loss Experience

The Company closely monitors  portfolio  delinquency and loss rates in measuring
the quality of the portfolio and the potential for ultimate credit losses. Under
the Company's policy,  non-real estate secured delinquent accounts generally are
charged  off when they  become  180 days  contractually  delinquent.  Collection
efforts  continue  after an  account  has been  charged  off until the  customer
obligation  is satisfied or until it is  determined  that the  obligation is not
collectible or that the cost of continuing collection efforts will not be offset
by the potential recovery.

Management  of the Company  attempts  to control  customer  delinquency  through
careful evaluation of each borrower's application and credit history at the time
the loan is made or acquired,  and appropriate  collection activity. The Company
seeks to reduce its risk by focusing  on  individual  lending,  making a greater
number of smaller  loans than would be  practical  in  commercial  markets,  and
maintaining disciplined control over the underwriting process. The Company has a
geographically  diverse  portfolio as described  in  Portfolio  Composition.  An
account is considered delinquent for financial reporting purposes when a payment
is 60 days or more past due, based on the original or terms of the contract.

In order to establish the Company's  allowance for credit  losses,  the consumer
finance  receivables  portfolio is segmented  into two  categories:  real estate
secured and non-real estate secured (personal loans and retail sales contracts).
The  determination  of the  level  of  the  allowance  for  credit  losses  and,
correspondingly,  the provision for loan losses for these homogeneous loan pools
rests  upon  various  judgments  and  assumptions  used to  determine  the  risk
characteristics of the portfolio. These judgments are supported by analyses that
fall into  three  general  categories:  (i)  current  and  anticipated  economic
conditions as they relate to the Company's  current customer base and geographic
distribution; (ii) a predictive analysis of the outcome of the current portfolio
(a  migration  analysis);  and (iii) prior loan loss  experience.  Additionally,
every real estate  secured loan that reaches 90 days  delinquency is reviewed by
the Company's  credit  administration  management to assess  collectibility  and
future course of action.  These systematic  analyses  provide a  self-correcting
mechanism to reduce differences  between estimated and actual observed losses in
the portfolios. 

Interest Rate Spreads and Cost of Borrowed Funds

A  relatively  high ratio of  borrowings  to invested  capital is  customary  in
consumer  finance  activities due to the liquidity of the assets employed by the
business.  The spread  between the  revenues  received  from loans and  interest
expense is a significant factor in determining the net income of the Company.

The Company funds its consumer finance operations  principally  through net cash
flows from operating  activities,  short-term borrowings in the commercial paper
market,  issuances of  long-term  debt and  customer  deposits.  The Company had
commercial  paper  outstanding  at December 31, 1998 of $515.8 million at a 5.7%
weighted average interest rate.

<PAGE> 7


In 1996, the Company entered into a $550 million revolving credit agreement with
several  domestic and foreign  banks.  The agreement  has a four-year  term with
repayment  in full of any balance  outstanding  in August,  2000.  There were no
borrowings under the above-described revolving credit agreement in 1998 or 1997.

The Company issues debt securities  under shelf  registration  statements  filed
with the Securities Exchange  Commission  ("SEC").  Borrowings under these shelf
registration statements totaled approximately $1.40 billion at December 31, 1998
and $1.45 billion at December 31, 1997.

The Company also has  borrowings  with the Federal  Home Loan Bank  ("FHLB") and
accepts  customer  deposits  through its  industrial  banking  subsidiary.  FHLB
borrowings  totaled  $73.9  million at December  31,  1998 and $24.9  million at
December 31, 1997. Customer deposits totaled $187.5 million at December 31, 1998
and $163.2 million at December 31, 1997.

Provisions of certain of the Company's debt  agreements  restrict the payment of
dividends  to  a  maximum  prescribed  proportion  of  cumulative  earnings  and
contributed  capital and provide for the maintenance of minimum levels of equity
and maximum leverage ratios. At December 31, 1998,  approximately  $43.6 million
was available under the debt agreement restriction for future dividends.

Other products

As part of its consumer  finance line of business,  the Company makes available,
at the option of its customers,  credit life,  credit  accident and health,  and
credit  casualty  insurance  products.  The Company  does not sell  insurance to
non-customers.  Credit  insurance sold by the Company is written by unaffiliated
insurance  companies and is  substantially  all reinsured by the Company,  which
earns reinsurance premiums thereon.

The Company issues VISA credit cards,  which are serviced by a  third-party,  to
its qualified  existing  customers.  At December 31, 1998, the Company had $35.3
million in credit card receivables outstanding.

An  additional  service  offered  to  existing  customers  is  membership  to  a
third-party auto club. The Company earns  commission  income for each membership
sold, which provides emergency road-side assistance,  as well as other benefits,
to its members.

Risk Factors

In addition to the other  information  in this Annual  Report on Form 10-K,  the
following factors should be considered carefully:

<PAGE> 8



Decline of Collateral Value May Adversely Affect Portfolio Credit Quality

Approximately 44% of the Company's finance receivables  outstanding were secured
by real estate at December 31, 1998.  The Company's  lending  policies limit the
loan to value ("LTV") ratio of such loans to a maximum of 85%. Nevertheless, any
material  decline in real estate values  reduces the ability of borrowers to use
home equity to support  borrowings  and increases the LTV's of loans  previously
made by the Company,  thereby weakening  collateral  coverage and increasing the
possibility   of  a  loss  in  the  event  of  a  borrower   default.   Further,
delinquencies,  foreclosures  and  losses  generally  increase  during  economic
slowdowns or recessions.  Any sustained period of such increased  delinquencies,
foreclosures  and  losses  could  adversely  affect  the  Company's  results  of
operations and financial condition.

Change in Delinquency Rate

While the  Company  employs  underwriting  criteria  and  collection  methods to
mitigate the risks inherent in loans made to its customers,  no assurance can be
given that such criteria or methods will afford adequate protection against such
risks. In the event the Company's portfolio of finance  receivables  experiences
higher  delinquencies,  foreclosures or losses than  anticipated,  the Company's
results of operations or financial condition could be adversely affected.

Impact of Regulation and Legislation; Regulatory Enforcement

The  Company's  business is subject to  extensive  regulation,  supervision  and
licensing by governmental  authorities in the United States (including  federal,
state and local  authorities).  The  Company is also  subject  to various  laws,
regulations and judicial and administrative  decisions imposing requirements and
restrictions on part or all of its operations.  The Company's lending activities
are subject to the Truth-in-Lending Act (including the Home Ownership and Equity
Protection Act of 1994), the Fair Housing Act, the Equal Credit Opportunity Act,
the Fair Credit  Reporting Act, the Real Estate  Settlement  Procedures Act, the
Home  Mortgage  Disclosure  Act and the Fair Debt  Collection  Practices Act and
regulations  promulgated  thereunder,  as well as other federal, state and local
statutes and regulations affecting the Company's activities. The Company is also
subject to the rules and regulations of, and  examinations  by, state regulatory
authorities with respect to originating,  processing, underwriting and servicing
loans.  These rules and  regulations,  among other things,  (i) impose licensing
obligations  on the Company,  (ii) establish  eligibility  criteria for mortgage
loans,  (iii)  prohibit   discrimination,   (iv)  provide  for  inspections  and
appraisals of properties,  (v) require credit reports on loan  applicants,  (vi)
regulate assessment,  collection, foreclosure and claims handling, (vii) mandate
certain  disclosures  and notices to  borrowers  and (viii) in some  cases,  fix
maximum  interest  rates,  fees and loan  amounts.  Failure to comply with these
requirements  can lead to termination or suspension of the Company's  ability to
make and collect loans,  certain rights of rescission for mortgage loans,  class
action  lawsuits  and  Administrative   enforcement   actions.   Recent  Federal
legislation,  the Riegle Community  Development and Regulatory  Improvement Act,
has focused  additional  regulation on mortgage loans having  relatively  higher
origination fees and interest rates, such as those made by the Company,  and the
Company expects its business to be the focus of additional United States federal
and state legislation, regulation and possible enforcement in the future.


<PAGE> 9


Additionally,  the Company's sale of credit life, credit accident and health and
credit  casualty  insurance  to its  customers  is subject to state and  federal
statutes and regulations.  Failure to comply with any of the foregoing state and
federal requirements could lead to imposition of civil penalties on the Company,
class  action  lawsuits and  administrative  enforcement  actions.  

The  laws  and   regulations   described   above  are  subject  to  legislative,
administrative  and  judicial  interpretation,  and  certain  of these  laws and
regulations  have  been  infrequently  interpreted  or  only  recently  enacted.
Infrequent  interpretations  of these laws and  regulations or an  insignificant
number  of  interpretations  of  recently  enacted  regulations  can  result  in
ambiguity  with respect to permitted  conduct under these laws and  regulations.
Any ambiguity  under the regulations to which the Company is subject may lead to
regulatory  investigations or enforcement  actions and private causes of action,
such as class action lawsuits, with respect to the Company's compliance with the
applicable laws and regulations. As a consumer lender, the Company has been, and
expects to continue to be, subject to regulatory enforcement actions and private
causes  of  action  from  time to  time  with  respect  to its  compliance  with
applicable laws and  regulations.  The Company's  lending  practices have in the
past  been  and  currently  are  under   regulatory   review  by  various  state
authorities.  Although the Company utilizes systems and procedures to facilitate
compliance with these legal  requirements  and believes that it is in compliance
in all material respects with applicable laws, rules and regulations,  there can
be no assurance that more  restrictive  laws,  rules and regulations will not be
adopted  in the  future,  or that  existing  laws  and  regulations  will not be
interpreted  in a more  restrictive  manner,  which could make  compliance  more
difficult or expensive. See Governmental Regulation.
Risk of Litigation

In the ordinary  course of its  business,  the Company is subject to claims made
against it by  borrowers  arising  from,  among  other  things,  losses that are
claimed to have been  incurred  as a result of  alleged  breaches  of  fiduciary
obligations, misrepresentations, errors and omissions of employees, officers and
agents of the Company,  incomplete  documentation and failures by the Company to
comply with various laws and regulations applicable to its business. The Company
believes that liability with respect to any currently  asserted  claims or legal
actions is not likely to be material to the  Company's  consolidated  results of
operations or financial  condition.  However,  any claims asserted in the future
may result in legal expenses or liabilities  that could have a material  adverse
effect on the Company's results of operations and financial  condition and could
distract members of management from the general operations of the Company.

Fluctuations in Interest Rates May Adversely Affect Profitability

The  profitability of the Company is likely to be adversely  affected during any
period of rapid changes in interest rates. A substantial and sustained  increase
in interest rates could adversely affect the spread between the rate of interest
received by the Company on its loans and the interest  rates  payable  under its
debt  agreements.  Such interest rate increases could also affect the ability of
the Company to originate  loans.  A significant  decline in interest rates could
decrease  the balance of the finance  receivables  portfolio by  increasing  the
level of loan prepayments.

<PAGE> 10



Competition Could Adversely Affect Results of Operations

Competition in the consumer  finance  business is intense.  The consumer lending
market is highly  fragmented and has been serviced by commercial  banks,  credit
unions and savings institutions, as well as by other consumer finance companies.
Many of  these  competitors  have  greater  financial  resources  and  may  have
significantly lower costs of funds than the Company.  Even after the Company has
made a loan to a borrower,  the Company's  competitors may seek to refinance the
Company's  loan in order to offer  additional  loan amounts or reduce  payments.
Furthermore,  the  profitability  of the  Company and other  similar  lenders is
attracting  additional  competitors into the market, with the possible effect of
reducing the  Company's  ability to charge its  customary  origination  fees and
interest rates. In addition, if the Company expands into new geographic markets,
it will face  competition  from  lenders  with  established  positions  in these
locations.  There can be no assurance  that the Company will be able to continue
to compete  successfully  in the  markets it serves.  Such an event could have a
material  adverse  effect on the Company's  results of operations  and financial
conditions.

Environmental Liabilities

Substantially  all of the  Company's  real  estate  receivables  are  secured by
single-family  dwellings.  In  the  course  of its  business,  the  Company  has
acquired, and may acquire in the future, such properties securing loans that are
in default.  There is a risk that hazardous  substances or waste,  contaminants,
pollutants  or sources  thereof could be  discovered  on such  properties  after
acquisition by the Company. In such event, the Company may be required by law to
remove  such  substances  from the  affected  properties  at its  sole  cost and
expense.  There can be no assurance  that (i) the cost of such removal would not
substantially  exceed the value of the affected  properties or the loans secured
by the  properties,  (ii) the Company would have adequate  remedies  against the
prior owner or other responsible parties, or (iii) the Company would not find it
difficult  or  impossible  to sell the  affected  properties  either prior to or
following  such removal.  At December 31, 1998,  the Company held sixty-one (61)
foreclosed  single-family  dwellings with a carrying value of approximately $2.6
million.

Governmental Regulation

The Company's  operations are, for the most part, regulated by federal and state
consumer finance laws or similar legislation. All of the states in which finance
subsidiaries  of the Company are licensed to do business  have laws,  which vary
from state to state, regulating the consumer finance business. These laws, among
other things,  typically limit the size of loans, set maximum interest rates and
maximum  maturities  and regulate  certain  lending and  collection  activities.
Although consumer finance laws have been in effect for many years,  amending and
new legislation is frequently proposed. The Company is unable to predict whether
or when any such proposals might ultimately be enacted into law or to assess the
impact any such enactment might have on the Company. In addition,  as it accepts
customers' deposits,  the industrial banking subsidiary is subject to regulation
by the FDIC and the relevant state banking authorities.

Employees

The Company employs  approximately 2,600 full-time  employees.  The Company also
employs part-time employees. None of these employees are represented by a union.
Management considers relations with its employees to be satisfactory.

<PAGE> 11



Item 2.  Properties

The  Company  owns its 71,000  square foot  headquarters  building on 6 acres of
land, which it built in 1994 at a total cost of approximately $8 million.

The Company's  branch offices,  located in 24 states,  are leased  typically for
terms of three to five years with options to renew.  Typical  locations  include
shopping  centers,  office  buildings and  storefronts,  generally of relatively
small size sufficient to accommodate a staff of four to eight employees.

See Note 12 to the Consolidated  Financial Statements for additional information
on rental expense and lease commitments.

Item 3.  Legal Proceedings

The Company and certain of its  subsidiaries are parties to various lawsuits and
proceedings  arising in the ordinary  course of  business.  The Company has also
been named as a defendant in a number of class action  suits,  in which  various
industry-wide  practices  arising from  routine  business  activities  are being
challenged and various  damages are being sought.  Certain of these lawsuits and
proceedings arise in jurisdictions,  such as Alabama,  that permit damage awards
disproportionate to the actual economic damages incurred. Based upon information
presently  available,  the Company  believes  that the total  amounts  that will
ultimately be paid arising from these lawsuits and  proceedings  will not have a
material adverse effect on the Company's  consolidated results of operations and
financial  position.  However,  it should be noted that the  frequency  of large
damage awards,  including large punitive  damage awards,  that bear little or no
relation to actual economic damages incurred by plaintiffs in jurisdictions like
Alabama  continues to increase and creates the  potential  for an  unpredictable
judgment in any given suit. In December,  1998, the Company  reached a tentative
agreement to settle one such outstanding lawsuit, the total cost of which is not
expected  to  exceed  $4.5  million.  The  Company's   consolidated  results  of
operations for 1998 reflect the recording of this amount in its entirety.


<PAGE> 12


                                     PART II

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

The Company is an indirect wholly-owned  subsidiary of Washington Mutual and the
Company's  common stock is not traded on any  national  exchange or in any other
established market.

Payment  of  dividends  is  within  the  discretion  of the  Company's  Board of
Directors.  Provisions of certain of the Company's debt agreements  restrict the
payment of dividends to a maximum prescribed  proportion of cumulative  earnings
and  contributed  capital and otherwise  provide for the  maintenance of minimum
levels  of equity  and  maximum  leverage  ratios.  Dividends  will be paid when
capital exceeds the amount of debt to tangible  capital  (leverage ratio) deemed
appropriate  by  management.  This  leverage  ratio  will be  managed  with  the
intention  of  maintaining   the  existing   credit  ratings  on  the  Company's
outstanding obligations.  The Company declared and paid dividends totaling $36.5
million during 1998 and $17.5 million during 1997.

Item 7.  Management's  Analysis of the Results of Operations  for the Year Ended
         December 31, 1998

Results of Operations

Net income for the year ended December 31, 1998 of $52.9 million increased 14.3%
from $46.3  million for the year ended  December 31, 1997.  The  improvement  is
primarily  due to an  increase  in net  interest  income  resulting  from higher
consumer finance receivables and net interest spread.

The Company's net interest income before  provision for credit losses  increased
$36.0 million,  or 14.6%,  to $283.2 million for 1998, as compared to 1997. This
increase  reflects  growth in average net consumer  finance  receivables to $2.4
billion,  which is $173.1 million, or 7.9%, greater than the average balance for
1997.  This is a result of  management's  implementation  of an internal  growth
initiative throughout the branch network. Due to management's focus on growth in
the higher margin core  products,  average real estate secured and personal loan
balances  increased  $121.4 million and $109.8 million,  or 13.1% and 11.8% over
the prior  year,  respectively.  This  growth  was  partially  offset by a $49.5
million, or 14.7% decrease in average retail sales contracts, as compared to the
prior year.  This decline was the result of  management's  decision to eliminate
several dealer  relationships  for profitability  reasons.  As a result of these
factors, total originations,  excluding renewals, for 1998 totaled $1.8 billion,
which was an improvement of 12.5%, as compared to 1997.

The overall  portfolio yield increased 44 basis points to 17.04% from 16.60% for
the year ended  December  31,  1998,  as  compared  to 1997.  As a result,  loan
interest and fee income  increased $39.2 million,  or 10.7%,  for the year ended
December  31,  1998,  as compared  to 1997.  Due to a $9.6  million  increase in
average investment securities,  income from investment securities increased $1.1
million,  or 10.4% over the prior year. As a result of the activity above, total
interest income increased $40.3 million, or 10.7% over the prior year.

<PAGE> 13



In  order to  finance  the  growth  in  receivables,  average  debt  outstanding
increased $116.5 million,  or 6.2%, to $2 billion for 1998, as compared to 1997.
As a result of this increase,  offset partially by a decrease of 18 basis points
in the  weighted  average  interest  rate paid on such debt,  interest  and debt
expense  increased  $4.3  million,  or 3.4% over the prior year.  However,  as a
percentage of average consumer finance  receivables  (excluding unearned finance
charges and deferred  loan fees),  interest and debt expense  decreased 25 basis
points,  as compared  to the prior  year.  This  improvement,  coupled  with the
increased yield earned on the receivables portfolio, resulted in the significant
increase in net interest income noted above.

The table below sets forth certain  percentages  relative to the spread  between
interest  and fee income  received on the loan  portfolio  and interest and debt
expense:

<TABLE>


                                            Year Ended December 31,
                                          1998             1997             1996
                                      --------         --------         --------
Ratio to Average Consumer Finance
  Receivables, Net:
<S>                                      <C>              <C>              <C>   
  Interest and Fee Income                17.04%           16.60%           17.72%
  Interest and Debt Expense               5.60             5.85             5.78
                                 -------------      -----------        ---------

Net Interest Spread                      11.44%           10.75%           11.94%
                                 =============     ============       ==========

</TABLE>


Efficiency,  defined as the ratio of non-interest operating expenses,  excluding
the amortization of goodwill,  to total revenue,  improved to 44.9% for the year
ended  December  31,  1998 as  compared to 45.3% for 1997.  The  improvement  is
primarily  the result of increased  revenues from  consumer  finance  receivable
growth resulting from a heightened focus on productivity and a change in product
mix to an increased emphasis on higher margin products.

Provision for Credit Losses

The provision  for credit losses for the year ended  December 31, 1998 was 3.36%
as a percentage of average  consumer  finance  receivables  (excluding  unearned
finance  charges  and  deferred  loan  fees),  as  compared  to 3.02%  for 1997.
Charge-offs,  as a percentage of average consumer finance receivables (excluding
unearned finance charges and deferred loan fees),  increased to 3.12% in 1998 as
compared to 2.96% in 1997.  Net credit  charge-offs  for the year ended December
31, 1998 were $73.9 million as compared to $65.1 million for 1997.  The increase
was due primarily to higher net charge-offs on personal  loans,  which increased
$7.7 million.

At December  31,  1998,  the  allowance  for credit  losses as a  percentage  of
consumer finance  receivables  (excluding  unearned finance charges and deferred
loan fees) at period end equaled  3.13% as  compared  to 3.19% at  December  31,
1997.  This  decrease is  primarily a  reflection  of the  increased  collection
efforts which have  resulted in a modest 20 basis point  decrease in the over 60
day  delinquency  rate as compared to the prior year.  As of December  31, 1998,
total  delinquent  loans  (60  days or more  past  due) as a  percentage  of the
Company's  portfolio of finance  receivables  was 2.53%  compared to 2.73% as of
December 31, 1997.

<PAGE> 14



Activity in the Company's allowance for credit losses is as follows:
<TABLE>

                                                Year Ended December 31,
(Dollars in thousands)                     1998            1997            1996
                                    -----------     -----------     -----------

<S>                                 <C>             <C>             <C>        
Balance, January 1                  $    74,323     $    70,045     $    55,568
Provision for credit losses              79,760          66,600          58,800
Amounts charged off:
  Real estate secured loans              (2,125)         (1,292)         (1,582)
  Personal loans                        (73,210)        (64,460)        (50,086)
  Retail sales contracts                (14,417)        (13,946)        (10,947)
                                    ------------    -----------     -----------
                                        (89,752)        (79,698)        (62,615)
Recoveries:
  Real estate secured loans                 521             556             442
  Personal loans                         12,593          11,538          12,892
  Retail sales contracts                  2,774           2,553           2,863
                                    -----------     -----------     -----------
                                         15,888          14,647          16,197
                                    -----------     -----------     -----------
Net charge-offs (1)                     (73,864)       (65,051)         (46,418)

Allowances on notes purchased               274           2,729           2,095
                                    -----------     -----------     -----------
Balance, December 31                $    80,493     $    74,323     $    70,045
                                    ===========     ===========     ===========

Allowance for credit losses as a
  percentage of December 31 consumer
  finance receivables (excluding 
  unearned finance charges and 
  deferred loan fees)                      3.13%           3.19%           3.19%

Net charge-offs as a percentage of 
  average consumer receivables 
  (excluding unearned finance charges
   and deferred loan fees)                 3.12%           2.96%           2.20%



(1)
<FN>
Under the Company's  policy,  non-real  estate secured  delinquent  accounts are
charged off when they become 180 days  contractually  delinquent (120 days prior
to October 1, 1996).  Because of this change in policy,  the charge-offs for the
three years presented are not  comparable.  The Company is not able to determine
what the charge-offs would have been in 1996 under the new policy had it been in
effect January 1, 1996.
</FN>
</TABLE>

<PAGE> 15


The following  table sets forth the ratio of receivables  delinquent for 60 days
or  more,  on  a  contractual  basis,  to  gross  consumer  finance  receivables
outstanding:
<TABLE>

                                                  December 31,
                                         1998            1997            1996
                                   ----------       ---------       ---------

<S>                                      <C>             <C>             <C>  
Real estate secured loans                0.64%           0.79%           0.88%
Personal loans                           4.14            4.32            4.01
Retail sales contracts                   3.10            3.17            2.65
                                    ---------       ---------       ---------

Total                                    2.53%           2.73%           2.56%
                                    =========      ==========      ==========

</TABLE>


Asset / Liability Management

The  Company's  philosophy is to maintain an  approximate  match of the interest
rate  sensitivity  between  its  interest-bearing  assets and  liabilities.  The
Company's consumer finance receivables are primarily fixed rate and have initial
terms ranging from 3 to 360 months.  However,  loans are  generally  paid off or
refinanced   prior  to  their  stated   maturity.   Therefore,   the   Company's
asset/liability  management  requires a high degree of analysis and  estimation.
The Company funds its interest-bearing  assets through both internally generated
equity and external debt financing.

Liquidity / Capital Management

The Company funds its operations through a variety of corporate borrowings which
provide the flexibility needed to properly manage the liquidity risk inherent in
consumer  lending.  The primary  source of these  borrowings  is corporate  debt
securities issued by the Company.  At December 31, 1998, eleven different senior
debt issues totaling $1.4 billion were outstanding, with a weighted average cost
of 6.72%.  To meet the  Company's  short-term  funding  needs,  daily  trades of
commercial  paper are  executed.  At December 31, 1998,  twenty-three  different
commercial paper  borrowings  totaling $515.8 million were  outstanding,  with a
weighted average cost of 5.67%. The Company's  banking  subsidiary  raises funds
through both customer  deposits and borrowings  with the Federal Home Loan Bank.
At December 31, 1998, the banking  subsidiary's  outstanding debt totaled $261.4
million,  with a weighted  average cost of 5.51%.  The Company also  maintains a
revolving credit agreement with twenty-four  syndicate  lenders which provides a
credit line of up to $550  million  primarily  to support the  commercial  paper
borrowings.  There were no borrowings  under this revolving  credit agreement in
1998 or 1997.

Long-term debt at December 31, 1998 and 1997 consisted of the following:

(Dollars in thousands)                                1998            1997
                                             -------------    ------------

Senior Notes and Debentures                  $    1,298,342   $  1,248,205
Senior Subordinated Notes
  and Debentures                                     99,925        199,767
Federal Home Loan Bank Notes                         28,900         24,900
                                             --------------   ------------
                                             $    1,427,167   $  1,472,872
                                             ==============   ============

<PAGE> 16



Customer deposits at December 31, 1998 and 1997 consisted of the following:

(Dollars in thousands)                                 1998           1997
                                             --------------   ------------

Money market accounts                        $       15,382   $     15,883
Savings accounts                                      1,340          1,493
Certificates of deposit under $100,000              155,287        133,041
Certificates of deposit $100,000 and over            15,509         12,768
                                             --------------   ------------
                                             $      187,518   $    163,185
                                             ==============   ============

The Company  manages its capital by establishing  equity leverage  targets based
upon the ratio of debt (including  customer  deposits) to tangible  equity.  The
debt to tangible  equity ratio at December  31, 1998 of 5.86 to 1 has  increased
from 5.72 to 1 at December 31, 1997. The determination of the Company's dividend
payments and resulting  capital leverage will be managed in a manner  consistent
with the Company's desire to maintain strong and improving credit ratings.

Year 2000

This section contains forward-looking  statements that have been prepared on the
basis of the Company's best judgments and currently  available  information  and
constitutes a Year 2000 Readiness Disclosure within the meaning of the Year 2000
Readiness  Disclosure  Act  of  1998.  These   forward-looking   statements  are
inherently   subject  to  significant   business,   third-party  and  regulatory
uncertainties  and  contingencies,  many of which are beyond the  control of the
Company.  In  addition,  these  forward-looking  statements  are  based  on  the
Company's current  assessments and remediation plans, which are based on certain
representations  of third  party  service  providers  and are subject to change.
Accordingly,  there can be no assurance that the Company's results of operations
will not be adversely  affected by  difficulties  or delays in the  Company's or
third parties' Year 2000 readiness efforts.  See Risks below for a discussion of
factors  that may cause such  forward-looking  statements  to differ from actual
results.

The  Company  has  implemented  a  company-wide  program to  renovate,  test and
document  the  readiness  ("Year 2000  readiness")  of its  electronic  systems,
programs  and  processes  ("Computer  Systems"),   and  facilities  to  properly
recognize  dates to and through the year 2000 (the "Year 2000  Project").  While
the Company is in various stages of modification  and testing of individual Year
2000  Project  components,  the Year 2000  Project is  proceeding  generally  on
schedule.

The Company has assigned its Senior Vice  President  of  Information  Systems to
oversee the Year 2000 Project,  has set up a Year 2000 Project  Office,  and has
charged a senior management team representing all significant  operational areas
of the  Company to act as a Steering  Committee.  The  Company  has  dedicated a
substantial  amount of management  and staff time on the Year 2000 Project.  The
Company has, in conjunction with Washington Mutual,  engaged IBM Global Services
to provide  technical and management  resources  where necessary and has engaged
Deloitte  Consulting  Group LLC to assist in documenting  certain aspects of the
Year 2000 Project.  Monthly  progress reports are made to the Company's Board of
Directors,  and Washington  Mutual's Board of Directors' Audit Committee reviews
Year 2000 Project progress on a quarterly basis.


<PAGE> 17


(a) Project.  The Company has divided its Year 2000  Project into the  following
general  phases,  consistent  with  guidance  issued  by the  Federal  Financial
Institutions  Examinations  Council (the "FFIEC):  (i) inventory and assessment;
(ii) renovation,  which includes repair or replacement;  (iii) validation, which
includes  testing of Computer  Systems and the Company's  connections with other
computer systems;  (iv) due diligence on third party service providers;  and (v)
development  of  contingency  plans.  The Year 2000 Project is divided into four
categories:   mainframe  systems,  non-mainframe  systems,  third-party  service
providers, and facilities.

The  inventory  and  assessment  phases  are  substantially  complete,  and each
component  that has  been  identified  has  been  assigned  a  priority  rating,
corresponding to its significance.  The rating has allowed the Company to direct
its  attention to those  Computer  Systems,  third party  service  providers and
facilities  that  it  deems  more  critical  to its  ongoing  business  and  the
maintenance of good customer relationships.

The Company has  substantially  completed  the process of repairing or replacing
and  testing  the  most  significant  components  of its  Computer  Systems  and
facilities.  The Company has also  adopted  business  contingency  plans for the
Computer  Systems and  facilities  that it has  determined to be most  critical.
These  plans  conform to  recently  issued  guidance  from the FFIEC on business
contingency planning for Year 2000 readiness.  Contingency plans include,  among
other actions, manual workarounds and extra staffing.

The Company continues to assess its risk from other  environmental  factors over
which it has little control, such as electrical power supply, and voice and data
transmission.  Because of the nature of the factors, however, the Company is not
actively  engaged  in any  repair,  replacement  or  testing  efforts  for these
services.

(b) Costs.  While the Company  does not  believe  that the process of making its
Computer  Systems Year 2000 ready will result in material  cost,  it is expected
that a substantial  amount of management  and staff time will be required on the
Year 2000 Project.  The Company has spent  approximately $2.9 million in 1998 on
its Year 2000  Project,  and it currently  expects to spend  approximately  $750
thousand  more before it concludes  its Year 2000  readiness  efforts.  Prior to
1998,  the  Company  spent  approximately  $360  thousand  on Year 2000  related
initiatives.

(c) Risks. Based on its current assessments and its remediation plans, which are
based in part on certain  representations of third party service providers,  the
Company does not expect that it will experience a significant  disruption of its
operations as a result of the change to the new millenium.  Although the Company
has no reason to conclude that a failure will occur, the most reasonably  likely
worst-case  Year 2000  scenario  would  entail a  disruption  or  failure of the
Company's  power  supply or voice and data  transmission  suppliers,  a Computer
System, a third-party  servicer, or a facility. If such a failure were to occur,
the Company would  implement  its  contingency  plan.  While it is impossible to
quantify the impact of such a scenario,  the most reasonably  likely  worst-case
scenario  would  entail  a  diminishment  of  service   levels,   some  customer
inconvenience  and additional  costs from the contingency  plan  implementation,
which are not currently  estimable.  While the Company has contingency  plans to
address a temporary disruption in these services, there can be no assurance that

<PAGE> 18

any disruption or failure will be only temporary, that the Company's contingency
plans will  function as  anticipated,  or that the results of  operations of the
Company will not be adversely affected in the event of a prolonged disruption or
failure.

There can be no assurance  that the FFIEC or other federal  regulators  will not
issue new regulatory  requirements  that require  additional work by the Company
and, if issued,  that new regulatory  requirements will not increase the cost or
delay the completion of the Company's Year 2000 Project.




<PAGE> 19


Item 8.  Financial Statements and Supplementary Data

Report of Independent Certified Public Accountants

To the Board of Directors and Stockholder of
Aristar, Inc.

We have audited the accompanying  consolidated statements of financial condition
of Aristar,  Inc. and subsidiaries (the "Company") as of and for each of the two
years in the period  ended  December  31,  1998,  and the  related  consolidated
statements of operations,  comprehensive  income and retained  earnings,  and of
cash flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated  financial  statements based on our audits. The
consolidated financial statements of the Company for the year ended December 31,
1996 were  audited by other  auditors  whose  report,  dated  January 17,  1997,
expressed an unqualified opinion on those consolidated statements.

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 condition of the Company as of and for the two
years in the period ended  December 31, 1998,  and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.




DELOITTE & TOUCHE LLP
Tampa, Florida
January 19, 1999


<PAGE> 20


Report of Independent Certified Public Accountants

To the Board of Directors and Stockholder of
Aristar, Inc.

In our opinion, the consolidated statements of operations,  comprehensive income
and  retained  earnings  and of cash flows for the year ended  December 31, 1996
(appearing  on pages 21  through  40 of this Form 10-K  Annual  Report)  present
fairly,  in all material  respects,  the results of operations and cash flows of
Aristar,  Inc. and its  subsidiaries  for the year ended  December 31, 1996,  in
conformity  with  generally  accepted  accounting  principles.  These  financial
statements   are  the   responsibility   of  the   Company's   management;   our
responsibility  is to express an opinion on these financial  statements based on
our  audit.  We  conducted  our audit of these  statements  in  accordance  with
generally accepted auditing standards which 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,
assessing the accounting  principles used and the significant  estimates made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe  that our audit  provides a reasonable  basis for the opinion  expressed
above.  We have not audited the  consolidated  financial  statements of Aristar,
Inc. and its subsidiaries for any period subsequent to December 31, 1996.

As described in Note 3, during 1996, the Company  acquired two  businesses  from
affiliated  companies.  Both transactions were accounted for in a manner similar
to a pooling of interests, which gave retroactive effect to these acquisitions.





PricewaterhouseCoopers LLP
Tampa, Florida
January 17, 1997


<PAGE> 21


ARISTAR, INC. and Subsidiaries
Consolidated Statements of Financial Condition

<TABLE>

(Dollars in thousands, except par value and        December 31, 1998        December 31, 1997 
 share information)                                -----------------        ------------------
  

ASSETS
<S>                                                   <C>                       <C>           
Consumer finance receivables, net                     $ 2,493,903               $    2,254,389
Investment securities                                     150,820                      154,475
Cash and cash equivalents                                  24,180                       26,446
Property,  equipment and leasehold improvements,
 less accumulated depreciation and amortization:
 1998, $24,120; 1997, $22,310                              12,411                        9,687
Goodwill, less accumulated amortization:
 1998, $63,319; 1997, $59,702                              48,166                       49,591
Other assets                                               15,230                       15,018
                                                      -----------                  -----------

   TOTAL ASSETS                                       $ 2,744,710                 $  2,509,606
                                                      ===========                 ============

LIABILITIES AND STOCKHOLDER'S EQUITY

Liabilities
Short-term debt                                       $   560,823                  $   357,532
Long-term debt                                          1,427,167                    1,472,872
                                                      -----------                  -----------
   Total debt                                           1,987,990                    1,830,404
Customer deposits                                         187,518                      163,185
Accounts payable and other liabilities                    145,430                      117,627
Federal and state income taxes                              4.442                          206
                                                      -----------                  -----------
   Total liabilities                                    2,325,380                    2,111,422
                                                      -----------                  -----------

Commitments and contingencies
 (Notes 12 and 13)

Stockholder's equity
Common stock: $1.00 par value;
 10,000 shares authorized; 1,000
 shares issued and outstanding                                  1                            1
Paid-in capital                                            48,960                       44,894
Retained earnings                                         369,143                      352,756
Accumulated other comprehensive income:
  Net unrealized holding gains on
   investment securities, net of tax                        1,226                          533
                                                      -----------                  -----------
     Total stockholder's equity                           419,330                      398,184
                                                      -----------                  -----------

   TOTAL LIABILITIES AND
     STOCKHOLDER'S EQUITY                             $ 2,744,710                  $ 2,509,606
                                                      ===========                  ===========
</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE> 22




ARISTAR, INC. and Subsidiaries
Consolidated Statements of Operations, Comprehensive Income
and Retained Earnings
<TABLE>

                                              Year Ended December 31,
(Dollars in thousands)                     1998             1997            1996
                                      ---------        ---------       ---------
<S>                                   <C>              <C>             <C>      
Loan interest and fee income          $ 404,954        $ 365,719       $ 366,750
Investment securities income             11,449           10,373           9,183
                                      ---------        ---------       ---------
  Total interest income                 416,403          376,092         375,933

Interest and debt expense               133,211          128,887         120,758
                                      ---------        ---------       ---------
Net interest income before
  provision for credit losses           283,192          247,205         255,175

Provision for credit losses              79,760           66,600          58,800
                                      ---------        ---------       ---------
  Net interest income                   203,432          180,605         196,375
                                      ---------        ---------       ---------
Other income                             27,147           26,555          27,205
                                      ---------        ---------       ---------

Other expenses
  Personnel expenses                     76,664           69,468          71,724
  Occupancy expense                      10,434           10,068           9,919
  Advertising expense                     6,516            5,807           4,848
  Goodwill amortization expense           3,617            7,064           7,063
  Other operating expenses               45,761           38,722          30,508
                                      ---------        ---------       ---------
                                        142,992          131,129         124,062
                                      ---------        ---------       ---------

Income before income taxes               87,587           76,031          99,518

Provision for federal and state 
income taxes                             34,700           29,744          37,000
                                      ---------        ---------       ---------

Net Income                               52,887           46,287          62,518

Net unrealized holding gains
 (losses) on securities arising 
 during period, net of tax                  693              157            (140)
                                      ---------        ---------       ---------

Comprehensive income                  $  53,580        $  46,444       $  62,378
                                      =========        =========       =========

Retained earnings
  Beginning of year                   $ 352,756        $ 323,969       $ 428,273
  Net income                             52,887           46,287          62,518
  Dividends                             (36,500)         (17,500)       (116,800)
  Transfer to Great Western Bank,
    A Federal Savings Bank                                               (15,192)
  Transfer to Great Western
     Financial Corporation                                               (34,830)
                                      ---------        ---------       ---------
  End of year                         $ 369,143        $ 352,756       $ 323,969
                                      =========        =========       =========

</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE> 23


ARISTAR, INC. and Subsidiaries
Consolidated Statements of Cash Flows

<TABLE>
                                                             Year Ended December 31,           
(Dollars in thousands)                                   1998              1997              1996
                                                   ----------       -----------       -----------
Cash flows from operating activities
<S>                                                <C>              <C>               <C>        
  Net income                                       $   52,887       $    46,287       $    62,518
  Adjustments to reconcile net income to net
       cash provided by operating activities
     Provision for credit losses                       79,760            66,600            58,800
     Depreciation and amortization                      6,611            11,282            11,907
     Increase (decrease) in
      Accounts payable and other liabilities           27,803             5,759           (20,576)
      Federal and state income taxes payable            3,819             6,732           (14,243)
     (Increase) decrease in other assets                 (212)            6,533            (7,954)
                                                   -----------      -----------       ----------

    Net cash provided by operating activities         170,668           143,193            90,452
                                                   ----------       -----------        ----------

Cash flows from investing activities
  Investment securities purchased                     (91,477)          (62,582)          (40,331)
  Investment securities matured and sold               96,275            45,454            43,317
  Consumer finance receivables originated
   or purchased                                    (1,627,907)       (1,493,059)       (1,407,333)
  Consumer finance receivables repaid               1,305,915         1,293,161         1,308,184
  Net change in property, equipment and
   leasehold improvements                              (4,583)             (998)             (665)
                                                   ----------       -----------        ----------

    Net cash used in investing activities            (321,777)         (218,024)          (96,828)
                                                   ----------       -----------        ----------

Cash flows from financing activities
  Net change in customer deposits                      24,333            17,047           (14,634)
  Net change in short-term debt                       203,291           (40,474)           85,130
  Proceeds from issuance of long-term debt            209,653           326,344           453,539
  Repayments of long-term debt                       (256,000)         (206,800)         (105,000)
  Net change in due to affiliate                                                         (237,576)
  Dividends paid                                      (36,500)          (17,500)         (116,800)
  Transfer to Great Western Bank,
    A Federal Savings Bank                                                                (15,192)
  Transfer to Great Western Financial Corporation                                         (34,830)
  Proceeds from affiliate transfer                      4,066                                    
                                                   ----------       -----------       -----------
    Net cash provided by financing activities         148,843            78,617            14,637
                                                   ----------       -----------       -----------

Net increase (decrease) in cash 
 and cash equivalents                                  (2,266)            3,786             8,261

Cash and cash equivalents
  Beginning of year                                    26,446            22,660            14,399
                                                   ----------       -----------       -----------
  End of year                                      $   24,180       $    26,446       $    22,660
                                                   ==========       ===========       ===========

Supplemental disclosures of cash flow 
  information
 Interest paid                                     $  133,160       $   125,841       $   118,038
 Intercompany payments in lieu of federal
  and state income taxes                           $   30,881       $    23,011       $    49,612

</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE> 24


ARISTAR, INC. and Subsidiaries
Notes to Consolidated Financial Statements


Note 1    Ownership and Operations

At June 30, 1997,  Aristar,  Inc. was an indirect,  wholly-owned  subsidiary  of
Great Western Financial  Corporation  ("GWFC").  On July 1, 1997, pursuant to an
Agreement and Plan of Merger  announced March 6, 1997, GWFC merged with and into
a wholly-owned  subsidiary of Washington Mutual, Inc. ("Washington Mutual") (the
"Great Western  Merger").  As a result of this merger,  Aristar,  Inc. became an
indirect, wholly-owned subsidiary of Washington Mutual. The Great Western Merger
was  accounted  for as a pooling  of  interests.  Accordingly,  these  financial
statements reflect historical cost. Aristar,  Inc. and its subsidiaries,  all of
which are wholly-owned, are referred to hereinafter as the "Company."

The Company is engaged primarily in the consumer financial services business and
its  operations  consist  principally of a network of  approximately  500 branch
offices  located in 24 states,  primarily in the Southeast and Southwest.  These
offices  generally  operate  under the names  Blazer  Financial  Services,  City
Finance  Company and First  Community  Financial  Services.  The  Company  makes
consumer installment loans and purchases retail installment contracts from local
retail  establishments.  These consumer  credit  transactions  are primarily for
personal,  family  or  household  purposes.  The  Company  also  engages  in the
industrial banking business through its subsidiary with branches in Colorado and
Utah. In addition to making  consumer  installment  loans and purchasing  retail
installment contracts, this subsidiary also takes customers' savings deposits.

Note 2    Summary of Significant Accounting Policies

Principles of Consolidation.  The consolidated  financial statements include the
accounts of Aristar,  Inc. and its subsidiaries,  all of which are wholly-owned,
after  elimination  of all  material  intercompany  balances  and  transactions.
Certain amounts in prior years have been  reclassified to conform to the current
year's presentation.

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.

Income  Recognition  from Finance  Operations.  Unearned  finance charges on all
types of consumer finance  receivables are recognized on an accrual basis, using
the interest method.  Accrual generally is suspended when payments are more than
three months contractually overdue. Loan fees and directly related lending costs
are deferred and amortized using the interest  method over the contractual  life
of the  related  receivables.  A portion  of the  Company's  retail  installment
contracts  are "same as cash".  This provides a period during which the customer
is allowed to pay the account  balance in full  without  interest  charges.  The
Company  recognizes  interest  income only on the  portion of these  receivables
which it estimates will not exercise the "same as cash" option.




<PAGE> 25


Provision and Allowance for Credit Losses. The Company provides, through charges
to  income,  an  allowance  for credit  losses  which,  based upon  management's
evaluation  of numerous  factors,  including  current and  anticipated  economic
conditions,  a  predictive  analysis of the outcome of the current  portfolio (a
migration analysis) and prior loan loss experience,  is deemed adequate to cover
reasonably  expected losses on outstanding  receivables.  The Company's consumer
finance  receivables are a large group of smaller-balance  homogenous loans that
are  collectively  evaluated  for  impairment.  Additionally,  every real estate
secured  loan that  reaches 90 days  delinquency  is reviewed  by the  Company's
credit  administration  management to assess collectibility and future course of
action. These systematic analyses provide a self-correcting  mechanism to reduce
differences between estimated and actual observed losses in the portfolio.

Losses on receivables  are charged to the allowance for credit losses based upon
the number of days delinquent or when  collectibility  becomes  questionable and
the underlying collateral,  if any, is considered  insufficient to liquidate the
receivable balance. Non-real estate secured delinquent receivables are generally
charged  off when  they are 180 days  contractually  delinquent.  Recoveries  on
previously written-off receivables are credited to the allowance.

Investment  Securities.  Debt and equity  securities are classified as available
for sale and are  reported  at fair  value,  with  unrealized  gains and  losses
excluded from earnings and reported,  net of taxes,  as a separate  component of
stockholder's  equity and comprehensive  income.  Gains and losses on investment
securities are recorded when realized on a specific  identity basis.  Investment
security transactions are recorded using trade date accounting.

Property,   Equipment  and  Leasehold  Improvements.   Property,  equipment  and
leasehold  improvements  are stated at cost,  net of  accumulated  depreciation.
Depreciation  is provided for principally on the  straight-line  method over the
estimated useful life, ranging from three to thirty years, or, if less, the term
of the lease.

Goodwill.  The  excess of cost over the fair  value of net  assets of  companies
acquired is amortized on a straight-line basis,  generally over periods of up to
25 years. The Company periodically reviews intangibles to assess  recoverability
and impairment is recognized in operations if permanent loss of value occurs.

Income Taxes.  The Company is included in the  consolidated  Federal  income tax
return filed by Washington  Mutual.  Currently payable Federal income taxes will
be paid to  Washington  Mutual.  Federal  income  taxes  are  allocated  between
Washington   Mutual  and  its  subsidiaries  in  proportion  to  the  respective
contribution to consolidated income or loss.  Allocations for state income taxes
approximate  the amount the Company would have paid on a separate  entity basis.
Deferred  income  taxes are  provided on elements of income or expense  that are
recognized in different periods for financial and tax reporting purposes.

Taxes on income  are  determined  by using the  asset  and  liability  method as
prescribed by Statement of Financial  Accounting  Standards No. 109, "Accounting
for Income  Taxes" ("FAS  109").  This  approach  requires  the  recognition  of
deferred tax assets and liabilities for the expected future tax  consequences of
events that have been  recognized in the Company's  financial  statements or tax
returns.   In  estimating  future  tax   consequences,   FAS  109  requires  the
consideration  of all expected future events other than enactments of changes in
the tax law or rates.


<PAGE> 26


Statement  of Cash Flows.  For  purposes of  reporting  cash flows,  the Company
considers all highly liquid  investments with a maturity of three months or less
when purchased to be cash equivalents.

Fair Value  Disclosures.  Quoted market  prices are used,  where  available,  to
estimate  the fair  value of the  Company's  financial  instruments.  Because no
quoted market prices exist for a significant  portion of the Company's financial
instruments,  fair value is estimated using comparable market prices for similar
instruments or using  management's  estimates of appropriate  discount rates and
cash  flows for the  underlying  asset or  liability.  A change in  management's
assumptions  could  significantly  affect  these  estimates;   accordingly,  the
Company's  fair value  estimates  are not  necessarily  indicative of the value,
which would be realized upon disposition of the financial instruments.

The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:

        Consumer  finance  receivables.  The approximate  fair value of consumer
        finance  receivables is estimated by  discounting  the future cash flows
        using  current  rates at which  similar loans would be made with similar
        maturities to borrowers with similar credit  ratings.  The fair value is
        not adjusted  for the value of potential  loan  renewals  from  existing
        borrowers.

        Investment  securities.  Fair values for investment securities are based
        on quoted market prices,  where  available.  If quoted market prices are
        not  available,  fair  values  are  based on  quoted  market  prices  of
        comparable instruments.

        Debt.  The  carrying  amount  reported  in the  statement  of  financial
        condition  for  short-term  debt  approximates  its fair value given its
        brief maximum term.  The  approximate  fair value for long-term  debt is
        estimated using rates  currently  available to the Company for debt with
        similar terms and remaining maturities.

        Customer  deposits.  The fair values  disclosed for  fixed-rate  savings
        certificates  of deposit  are  estimated  using a  discounted  cash flow
        calculation  that applies  interest  rates  currently  being  offered on
        certificates  to a schedule of  aggregate  expected  maturities  on time
        deposits.  The fair  values  disclosed  for  savings  and  money  market
        accounts are, by  definition,  equal to the amount  payable on demand at
        the reporting date.

Adoption  of  Recently  Issued  Accounting  Standards.  Statement  of  Financial
Accounting  Standards  ("SFAS") No. 130,  "Reporting  Comprehensive  Income" was
issued in June 1997 and requires businesses to disclose comprehensive income and
its  components  in  their  financial   statements.   This  statement  has  been
incorporated into these financial  statements and does not affect the results of
operations or financial position of the Company.

SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise  and  Related
Information"  was issued in June 1997 and redefines  how operating  segments are
determined  and  requires   disclosure  of  certain  financial  and  descriptive
information  about a company's  operating  segments.  SFAS No. 131 is  effective
beginning  January  1,  1998  and has been  incorporated  into  these  financial
statements. The statement does not affect the results of operations or financial
position of the Company.

<PAGE> 27



Recently Issued Accounting  Standard Not Yet Adopted.  SFAS No.133,  "Accounting
for Derivative Instruments and Hedging", was issued in June 1998 and establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts,  and for hedging activities.
SFAS No. 133 is effective for fiscal periods  beginning after June 15, 1999. The
impact of the  adoption of the  provisions  of this  statement on the results of
operations or financial condition of the Company has not yet been determined.

Note 3    Transfers from Related Parties

On April 30, 1996, Great Western Bank, a Federal Savings Bank ("GWB"), then also
a wholly owned  subsidiary of GWFC,  transferred to the Company a portion of its
consumer finance  business,  hereinafter  referred to as Great Western Financial
Services ("GWFS"). GWFS was comprised primarily of approximately $242 million in
consumer finance receivables, net. The Company paid fair value (as determined by
independent  appraisal) of approximately $252 million in cash raised through the
issuance of commercial  paper.  The Company  accounted for the  approximate  $10
million premium as a dividend to GWFC.  Additionally,  at the purchase date, the
Company  recorded a transfer to GWB of approximately  $15 million,  representing
the accumulated earnings of GWFS at that date.

On December 31, 1996, GWFC  transferred to the Company a portion of its consumer
banking  business,  hereinafter  referred  to as  Blazer  Financial  Corporation
("BFC").  BFC was comprised  primarily of approximately $229 million in consumer
finance  receivables,  net and $147  million in customer  deposits.  The Company
recorded, at the purchase date, a transfer to GWFC of approximately $35 million,
representing the accumulated earnings of BFC at that time.

In  accordance  with  Interpretation  Number 39,  "Transfers  and  Exchanges  of
Companies  under Common  Control," to Accounting  Principles  Opinion Number 16,
"Business  Combinations,"  both of the  above-described  acquisitions  were been
accounted for in a manner similar to a pooling of interests.

On May 1, 1998,  Washington  Mutual  transferred to the Company a portion of its
consumer finance  business,  hereinafter  referred to as Western Credit Services
("WCS").  WCS was comprised  primarily of  approximately  $4 million in consumer
finance  receivables,  net.  The  Company  paid  fair  value (as  determined  by
independent  appraisal) of  approximately  $4 million in cash.  The transfer was
accounted for as a purchase in which the Company made a capital contribution for
the amount of the purchase price.

Note 4    Insurance Recovery

In May 1996, the Company filed a fidelity bond claim,  subsequently  paid by the
insurer,  in the  amount  of $8.0  million  for  the  recovery  of  fraudulently
over-billed  marketing costs which had occurred over a number of years. The $8.0
million  recovery has been reflected as a reduction of other operating  expenses
in the  accompanying  statement  of  operations  and  comprehensive  income  and
retained earnings for the year ended December 31, 1996.


<PAGE> 28


Note 5    Consumer Finance Receivables

Consumer  finance  receivables  at December 31, 1998 and 1997 are  summarized as
follows:
<TABLE>

(Dollars in thousands)                               1998                  1997
                                           --------------       ---------------

Consumer finance receivables
<S>                                        <C>                  <C>            
 Real estate secured loans                 $    1,269,439       $     1,094,061
 Personal loans                                 1,361,820             1,197,788
 Retail sales contracts                           328,254               362,373
                                           --------------       ---------------

   Gross consumer finance receivables           2,959,513             2,654,222
Less:  Unearned finance charges and
        deferred loan fees                       (385,117)             (325,510)
       Allowance for credit losses                (80,493)              (74,323)
                                           --------------       ---------------
Consumer finance receivables, net          $    2,493,903       $     2,254,389
                                           ==============       ===============
</TABLE>

Activity in the Company's allowance for credit losses is as follows:
<TABLE>

                                                 Year Ended December 31,
(Dollars in thousands)                      1998            1997            1996
                                     -----------     -----------     -----------

<S>                                 <C>             <C>             <C>        
Balance, January 1                   $    74,323     $    70,045     $    55,568
Provision for credit losses               79,760          66,600          58,800
Amounts charged off:
  Real estate secured loans               (2,125)         (1,292)         (1,582)
  Personal loans                         (73,210)        (64,460)        (50,086)
  Retail sales contracts                 (14,417)        (13,946)        (10,947)
                                     ------------    -----------     -----------
                                         (89,752)        (79,698)        (62,615)
Recoveries:
  Real estate secured loans                  521             556             442
  Personal loans                          12,593          11,538          12,892
  Retail sales contracts                   2,774           2,553           2,863
                                     -----------     -----------     -----------
                                          15,888          14,647          16,197
                                     -----------     -----------     -----------
Net charge-offs (1)                      (73,864)        (65,051)        (46,418)

Allowances on notes purchased                274           2,729           2,095
                                     -----------     -----------     -----------
Balance, December 31                 $    80,493     $    74,323     $    70,045
                                     ===========     ===========     ===========
<


-------
(1)
<FN>
Under the Company's  policy,  non-real  estate secured  delinquent  accounts are
charged off when they become 180 days  contractually  delinquent (120 days prior
to October 1, 1996).  Because of this change in policy,  the charge-offs for the
three years presented are not  comparable.  The Company is not able to determine
what the charge-offs would have been in 1996 under the new policy had it been in
effect January 1, 1996.
</FN>
</TABLE>


<PAGE> 29

The amount of gross nonaccruing  consumer finance receivables included above was
approximately  $53.4  million and $50.9  million at December  31, 1998 and 1997,
respectively.

Contractual maturities,  net of unearned finance charges and deferred loan fees,
at December 31, 1998 are as follows:
<TABLE>
                                               Over 1
                                                  But
                                 Within        Within            Over
(Dollars in thousands)           1 year       5 years          5 years          Total
                              ---------    ----------      -----------    -----------

<S>                           <C>          <C>             <C>            <C>        
Real estate secured loans     $ 159,646    $  359,859      $   603,368    $ 1,122,873
Personal loans                  413,579       743,815            2,459      1,159,853
Retail sales contracts          118,050       171,555            2,067        291,672
                              ---------    ----------      -----------   ------------
                              $ 691,275    $1,275,229      $   607,894    $ 2,574,396
                              =========    ==========      ===========    ===========
</TABLE>

Consumer  loans have maximum terms of 360 months,  while retail sales  contracts
have maximum terms of 60 months.  The weighted  average  contractual term of all
consumer  finance  receivables  written during the years ended December 31, 1998
and 1997 was 56 months and 49 months, respectively.  Experience has shown that a
substantial  portion  of the  consumer  finance  receivables  will be renewed or
repaid prior to contractual maturity.  Therefore,  the tabulation of contractual
payments should not be regarded as a forecast of future cash collections. During
the years  ended  December  31,  1998 and  1997,  the  ratio of  principal  cash
collections to average net consumer finance receivables  outstanding was 55% and
59%,  respectively.  The majority of loans  provide for a fixed rate of interest
over the contractual life of the loan.

The approximate fair value of the Company's consumer finance receivables (net of
unearned  finance  charges and  deferred  loan fees) as of December 31, 1998 and
1997 follows:
<TABLE>

(Dollars in thousands)                    1998                            1997            
                             ------------------------------   ----------------------------
                                               Approximate                     Approximate
                                Net Book          Fair           Net Book         Fair
                                  Value           Value            Value          Value   

<S>                          <C>             <C>              <C>             <C>         
Real estate secured loans    $    1,122,873  $   1,092,170    $     977,810   $    962,249
Personal loans                    1,159,851      1,149,797        1,025,330        982,529
Retail sales contracts              291,672        288,519          325,572        325,572
                             --------------  -------------    -------------   ------------
                             $    2,574,396  $   2,530,486    $   2,328,712   $  2,270,350
                             ==============  =============    =============   ============
</TABLE>

Because the Company  primarily lends to consumers,  it did not have  receivables
from any  industry  group that  comprised  10 percent or more of total  consumer
finance receivables at December 31, 1998. Geographic diversification of consumer
finance  receivables  reduces the concentration of credit risk associated with a
recession in any one region.



<PAGE> 30


Note 6    Investment Securities

Investment securities as of December 31, 1998 and 1997 are as follows:
<TABLE>

(Dollars in thousands)                             December 31, 1998
                                                                                   Approximate
                            Original      Amortized          Gross Unrealized         Fair
                              Cost          Cost           Gains          Losses      Value   
                           ---------      ---------       -------        --------   ----------
<S>                        <C>            <C>             <C>            <C>        <C>       
Government obligations     $  18,637      $  18,649       $   183        $     42   $   18,790
Corporate obligations         95,813         96,075         1,739              93       97,721
Certificates of deposit
 and other                    34,489         34,028           443             162       34,309
                           ---------      ---------       -------        --------   ----------
                           $ 148,939      $ 148,752       $ 2,365        $    297   $  150,820
                           =========      =========       =======        ========   ==========
</TABLE>

<TABLE>

(Dollars in thousands)                             December 31, 1997
                                                                                   Approximate
                            Original      Amortized           Gross Unrealized         Fair
                              Cost          Cost            Gains         Losses      Value
                           ---------      ---------       -------        -------     ---------
<S>                        <C>            <C>             <C>            <C>         <C>      
Government obligations     $  22,685      $  22,284       $   115        $    115    $  22,284
Corporate obligations         98,875         98,316         1,180             266       99,230
Certificates of deposit
 and other                    34,905         32,917           186             142       32,961
                           ---------      ---------       -------        --------    ---------
                           $ 156,465      $ 153,517       $ 1,481        $    523    $ 154,475
                           =========      =========       =======        ========     ========

</TABLE>

There were no significant realized gains or losses during 1998 or 1997.

The  following  table  presents the  maturity of the  investment  securities  at
December 31, 1998:
<TABLE>

(Dollars in thousands)
                                                                     Approximate
                                                  Amortized             Fair
                                                    Cost                 Value
                                                 ----------        -----------
<S>                                              <C>               <C>        
Due in one year or less                          $   22,292        $    22,242
Due after one year through five years                83,258             84,414
Due after five years through ten years               39,074             40,034
Due after ten years                                   4,128              4,130
                                                 ----------        -----------
                                                 $  148,752        $   150,820
                                                 ==========        ===========

</TABLE>


<PAGE> 31


Note 7    Short-term Debt

Short-term debt at December 31, 1998 and 1997 consisted  primarily of commercial
paper notes.  Interest  expense in 1998 and 1997 related to the commercial paper
was $20.6 million and $23.0 million, respectively.

In addition,  on December 28, 1998, the Company  obtained a fixed advance of $45
million from the FHLB.  Under the agreement,  which has a maturity date of March
26, 1999, interest is payable monthly at a fixed rate of 5.15%. Interest expense
in 1998 related to this borrowing was $26 thousand.

The book  value  of  short-term  debt at  December  31,  1998  approximates  its
estimated fair value.

Additional information concerning total short-term borrowings is as follows:
<TABLE>

                                                  Year Ended December 31,
(Dollars in thousands)                        1998            1997          1996
                                       -----------    ------------     ---------

Outstanding during the year
<S>                                     <C>            <C>             <C>      
  Maximum amount at any month end       $  560,823     $  471,980      $ 578,743
  Average amount                        $  372,317     $  406,992      $ 391,936
  Weighted average interest rate               5.5%           5.8%          5.2%

Balance at end of year
  Amount                                $  560,823     $  357,532      $ 398,006
  Weighted average interest rate               5.7%           6.1%          5.7%

</TABLE>

Weighted average interest rates include the effect of commitment fees.

Short-term  notes  totaling $74 million and $67 million were issued in December,
1998 and 1997,  respectively.  The proceeds of these notes were used to purchase
investment securities and were repaid through liquidation of these securities in
the month following issuance. This short-term debt has been reflected net of the
securities  balances in the  accompanying  Consolidated  Statements of Financial
Condition.

In 1996, the Company entered into a $550 million revolving credit agreement with
several  domestic and foreign  banks.  The agreement  has a four-year  term with
repayment in full of any balance  outstanding  in August,  2000.  This revolving
credit agreement has restrictive covenants as described further in Note 8. There
were no borrowings under this revolving credit agreement in 1998 or 1997.




<PAGE> 32


Note 8         Long-term Debt

Long-term debt at December 31, 1998 and 1997 was comprised of the following:
<TABLE>

(Dollars in thousands)                                1998               1997 
                                             -------------       -------------

<S>                                          <C>                <C>
Senior notes and debentures
  5.75%, due July 15, 1998                   $                   $     149,972
  7.875%, due February 15, 1999                     99,995              99,947
  6.75%, due May 15, 1999                           99,998              99,992
  6.3%, due July 15, 2000                           99,968              99,949
  6.125%, due December 1, 2000                     149,800             149,702
  7.75%, due June 15, 2001                         149,959             149,944
  7.25%, due June 15, 2001                          99,916              99,885
  6.0%, due August 1, 2001                         199,697
  6.75%, due August 15, 2001                        99,950              99,933
  6.30%, due October 1, 2002                       149,644             149,561
  6.50%, due November 15, 2003                     149,415             149,320
                                             -------------       -------------

    Total senior debt                            1,298,342           1,248,205
                                             -------------       -------------

Senior subordinated notes and debentures
  8.875%, due August 15, 1998                                           99,979
  7.5%, due July 1, 1999                            99,925              99,788
                                             -------------       -------------

    Total senior subordinated debt                  99,925             199,767
                                             -------------       -------------

Federal Home Loan Bank notes
  4.91%, due May 1, 2001                            18,900              18,900
  5.39%, due June 3, 2002                                                6,000
  5.30%, due March 20, 2003                         10,000                    
                                             -------------       -------------

    Total Federal Home Loan Bank notes              28,900              24,900
                                             -------------       -------------

    Total long-term debt                     $   1,427,167       $   1,472,872
                                             =============       =============

</TABLE>

<PAGE> 33


Aggregate maturities at December 31, 1998 are as follows:
<TABLE>

(Dollars in thousands)
                                     Senior              Federal
                   Senior         Subordinated         Home Loan
                    Debt               Debt            Bank Notes          Total
                -----------        -----------         ----------     ----------
<S>             <C>                <C>                <C>             <C>       
1999            $   199,993        $    99,925                        $  299,918
2000                249,768                                              249,768
2001                549,522                            $   18,900        568,422
2002                149,644                                              149,644
2003                149,415                                10,000        159,415
                -----------        -----------         ----------     ----------
                $ 1,298,342        $    99,925         $   28,900     $1,427,167
                ===========        ===========         ==========     ==========
</TABLE>

The  approximate  fair value of the Company's  long-term debt as of December 31,
1998 and 1997 is as follows:
<TABLE>

(Dollars in thousands)
                                         1998                            1997
                           --------------------------        -------------------------
                             Book         Approximate         Book         Approximate
                             Value         Fair Value         Value         Fair Value
<S>                     <C>               <C>            <C>               <C>        
Senior debt             $   1,298,342     $ 1,321,822    $  1,248,205      $ 1,274,620
Senior subordinated
   debt                        99,925         100,940         199,767          204,114
Federal Home Loan
   Bank notes                  28,900          28,942          24,900           24,913
                        -------------     -----------    ------------      -----------
                        $   1,427,167     $ 1,451,704    $  1,472,872      $ 1,503,647
                        =============     ===========    ============      ===========
</TABLE>


On May 1, 1997, the Company obtained an adjustable rate advance from the FHLB in
the amount of $21.5 million.  Under the credit  agreement,  which matures May 1,
2001,  interest is payable  monthly and adjusts every seven days to a rate equal
to the FHLB's One Week Repo rate plus 10 basis  points  (4.91% at  December  31,
1998). As a result of prepayments  made in 1997, the  outstanding  balance as of
December 31, 1998 is $18.9 million.

On June 3, 1997,  the Company  obtained a putable  advance  from the FHLB in the
amount of $6 million.  On a specified day each quarter,  the FHLB had the option
to call the advance at par,  which was  exercised  in March  1998.  On March 20,
1998, the Company obtained a similar putable advance from the FHLB in the amount
of $10 million. On a specified day each quarter, the FHLB has the option to call
the advance at par.  Under the credit  agreement,  which matures March 20, 2003,
interest is payable monthly and is determined using a fixed annual interest rate
of 5.30%.

Interest  expense  related  to  long-term  FHLB  debt in 1998  and 1997 was $1.7
million and $1.1 million, respectively.



<PAGE> 34


The  Company's  senior  debt  securities  are issued  under  shelf  registration
statements  filed  with the SEC.  Under  various  registration  statements,  the
Company issued: in February,  1992, $100 million of 7.875% senior notes maturing
February 15, 1999; in July, 1992, $100 million of 7.5% senior subordinated notes
maturing  July 1,  1999;  in July,  1994,  $150  million of 7.75%  senior  notes
maturing  June 15,  2001;  in July,  1995,  $100  million of 6.3%  senior  notes
maturing  July 15,  2000;  in June,  1996,  $100  million of 7.25%  senior notes
maturing  June 15,  2001;  in August,  1996,  $100 million of 6.75% senior notes
maturing  May 15,  1999;  in August,  1996,  $100  million of 6.75% senior notes
maturing August 15, 2001; in December, 1996, $150 million of 6.125% senior notes
maturing  December 1, 2000; in October,  1997, $150 million of 6.3% senior notes
maturing  October 1, 2002; in November,  1997, $150 million of 6.5% senior notes
maturing November 15, 2003; and in July, 1998, $200 million of 6.0% senior notes
maturing  August 1, 2001.  The proceeds of these issues were  generally  used to
reduce borrowings of the Company  (including  outstanding  commercial paper) and
for  general  corporate  purposes  except as follows:  the June,  1996 issue was
primarily  used to  reduce  outstanding  commercial  paper  issued  to fund  the
purchase price of the Company's  acquisition of GWFS as described in Note 3; and
the December,  1996 issue was primarily  used to fund the purchase  price of the
Company's  acquisition of BFC as described in Note 3 and to repay  approximately
$69.6  million  of  outstanding  intercompany  indebtedness  owed by BFC and its
subsidiaries.

Interest  expense related to the  above-mentioned  senior notes in 1998 and 1997
was $100.9 million and $95.6 million, respectively.

Provisions of certain of the Company's debt  agreements  restrict the payment of
dividends  to  a  maximum  prescribed  proportion  of  cumulative  earnings  and
contributed  capital and provide for the maintenance of minimum levels of equity
and maximum leverage ratios. At December 31, 1998,  approximately  $43.6 million
was available under the debt agreement restriction for future dividends.

Note 9    Customer Deposits

The book value and approximate fair value of the Company's  customer deposits as
of December 31, 1998 and 1997 are as follows:
<TABLE>

(Dollars in thousands)
                                         1998                              1997
                           ----------------------------       -------------------------
                                Book       Approximate             Book     Approximate
                               Value        Fair Value            Value      Fair Value

<S>                        <C>              <C>                <C>           <C>       
Money market accounts      $  15,382        $   15,382         $ 15,883      $   15,883
Savings accounts               1,340             1,340            1,493           1,493
Certificates of deposit
  under $100,000             155,287           157,286          133,041         133.373
Certificates of deposit
  $100,000 and over           15,509            15,709           12,768          12,820
                           ---------       -----------        ---------      ----------
                           $ 187,518        $  189,717        $ 163,185      $  163,569
                           =========       ===========        =========      ==========
</TABLE>

Maturities of time deposits are $119.4  million in 1999,  $31.1 million in 2000,
$11.0 million in 2001 and $9.2 million thereafter.


<PAGE> 35



Note 10   Income Taxes

The components of income tax expense are as follows:
<TABLE>

                                          Year Ended December 31,       
(Dollars in thousands)              1998            1997            1996
                                --------         -------         -------

Currently payable
<S>                            <C>              <C>             <C>     
  Federal                      $  38,808        $ 28,567        $ 44,871
  State                            6,900           5,237           8,317
Deferred                        (11,008)          (4,060)        (16,188)
                               ---------        --------        --------
                               $  34,700        $ 29,744        $ 37,000
                               =========        ========        ========
</TABLE>

The  provisions  for  income  taxes  differ  from  the  amounts   determined  by
multiplying  pre-tax income by the statutory  Federal income tax rate of 35% for
1998, 1997 and 1996. A reconciliation between these amounts is as follows:
<TABLE>

                                               Year Ended December 31,
(Dollars in thousands)                     1998            1997            1996
                                    -----------     -----------     -----------

<S>                                 <C>             <C>             <C>        
Income taxes at statutory rates     $    30,655     $    26,611     $    34,831
Increase (reduction) in taxes
  resulting from:
   State income taxes, net of
    Federal benefit                       4,485           2,972           5,406
   Other                                   (440)            161          (3,237)
                                    -----------     -----------     -----------
                                    $    34,700     $    29,744     $    37,000
                                    ===========     ===========     ===========
</TABLE>


<PAGE> 36



Deferred taxes result from temporary  differences in the  recognition of certain
items  for  tax and  financial  reporting  purposes.  Deferred  tax  liabilities
(assets) are comprised of the following:
<TABLE>

                                                   December 31,       
(Dollars in thousands)                          1998              1997
                                           ---------        ----------

<S>                                        <C>              <C>       
Amortization of intangibles                $  11,614        $    9,537
Employee benefits accruals                      (577)            2,338
Depreciation                                     (81)               86
Loan interest and fee income                     511             3,173
Other deferred income items                    1,652             1,389
                                           ---------        ----------

   Total deferred tax liabilities             13,119            16,523
                                           ---------        ----------

Credit loss reserves                         (31,564)          (26,391)
Unearned insurance commissions                (7,466)           (4,700)
Other miscellaneous accruals                  (2,269)           (2,099)
State taxes                                   (2,543)           (4,100)
Other deferred deduction items                (6,400)           (3,655)
                                           ----------       ----------

   Total deferred tax assets                 (50,242)          (40,945)
                                           ----------       ----------

Net deferred tax asset                     $ (37,123)       $  (24,422)
                                           =========        ==========
</TABLE>



Note 11   Retirement and Savings Plans

Substantially  all of the Company's  employees  participate in a noncontributory
defined  contribution pension plan maintained by Washington Mutual ("the Plan").
Accumulated plan benefits and annual pension cost are derived from an allocation
formula  based  on  the  Company's  total  participants  and  the  Plan's  total
participants.

Pension  (recovery)  cost for the  Company's  participants  for the years  ended
December 31, 1998,  1997,  and 1996 was  ($150,000),  ($150,000)  and  $490,000,
respectively.  Due to the Company's  participation in a  multi-employer  defined
benefit plan,  information as to separate Company  participant assets and vested
benefits is not presented.

The Company's  employees also participate in an employee savings plan maintained
by  Washington  Mutual,  which allows  employees to defer part of their  pre-tax
compensation  until  retirement.   Company   contributions   equal  50%  of  the
contributions  made by  employees  up to 6% of salary plus annual  discretionary
amounts, if any, as determined by management. The Company's cost is based on the
actual contribution  related to its participating  employees.  Total expense was
$2.5  million,  $1.0 million and $1.4  million for the years ended  December 31,
1998, 1997 and 1996, respectively.


<PAGE> 37


The Company's  employees who retired prior to July 1, 1997 also  participate  in
GWFC's defined benefit  postretirement  plan ("the Benefit Plan") which covers a
portion  of the  costs  of  medical  and life  insurance  coverage  to  eligible
employees and dependents  based on age and length of service.  Medical  coverage
options  are  the  same  as  available  to  active  employees.  The  accumulated
postretirement  benefit  obligation  and related  expense  are  derived  from an
allocation  formula based on the Company's  total  participants  and the Benefit
Plan's total participants.

The net  postretirement  medical and life  insurance  expense  allocated  to the
Company for the years ended  December  31,  1998,  1997 and 1996 were  $344,000,
$358,000 and $521,000, respectively.

Note 12   Leases

At December 31, 1998,  the Company was lessee of office space,  principally  for
loan offices, computer and other office equipment and automobiles, generally for
terms of five or fewer years.

The Company has no material  capital leases.  Under  operating  leases that have
initial  or  remaining   noncancelable  lease  terms  in  excess  of  one  year,
approximate  aggregate  annual  minimum  rentals are $7.4 million in 1999;  $4.7
million in 2000;  $3.0 million in 2001;  $1.9 million in 2002; and $880 thousand
in 2003.  Rent expense for the years ended December 31, 1998,  1997 and 1996 was
$11.3 million, $10.8 million and $10.0 million, respectively.

Note 13   Contingencies

The Company and certain of its  subsidiaries are parties to various lawsuits and
proceedings  arising in the ordinary  course of  business.  The Company has also
been named as a defendant in a number of class action  suits,  in which  various
industry-wide  practices  arising from  routine  business  activities  are being
challenged and various  damages are being sought.  Certain of these lawsuits and
proceedings arise in jurisdictions,  such as Alabama,  that permit damage awards
disproportionate to the actual economic damages incurred. Based upon information
presently  available,  the Company  believes  that the total  amounts  that will
ultimately be paid, if any, arising from these lawsuits and proceedings will not
have  a  material  adverse  effect  on the  Company's  consolidated  results  of
operations  and  financial  position.  However,  it  should  be  noted  that the
frequency of large damage awards,  including large punitive damage awards,  that
bear little or no relation to actual economic  damages incurred by plaintiffs in
jurisdictions  like Alabama  continues to increase and creates the potential for
an  unpredictable  judgment in any given suit.  In December,  1998,  the Company
reached a tentative agreement to settle one such outstanding  lawsuit, the total
cost of which is not expected to exceed $4.5 million. The Company's consolidated
results of  operations  for 1998  reflect  the  recording  of this amount in its
entirety.


<PAGE> 38



Note 14   Transactions with Related Parties

Significant  transactions with Washington Mutual or its subsidiaries in addition
to those described in Note 3 are identified as follows:

o   Washington Mutual Bank FA, another subsidiary of Washington Mutual, provided
    the Company with certain administrative services,  including human resources
    and cash  management,  for which the Company  paid  management  fees of $1.1
    million in 1998, $1.9 million in 1997 and $1.8 million in 1996.

o   The Company made payments to Washington  Mutual pursuant to a tax allocation
    policy and in connection with the retirement and savings plans.

Note 15   Lines of Business

The Company is managed along two major lines of business:  consumer  finance and
consumer banking. The financial  performance of these business lines is measured
by the  Company's  profitability  reporting  processes,  which  utilize  various
management  accounting  techniques to ensure that both business line's financial
results reflect the underlying performance of that business.

In June 1997,  SFAS No. 131,  "Disclosures  about  Segments of an Enterprise and
Related  Information,"  was issued  effective  for  fiscal  years  ending  after
December 15, 1998. This standard requires the Company to provide  information on
the  performance of its reportable  business  segments,  noted above,  which are
strategic  lines of  business  managed  by the  Executive  Committee  under  the
direction of the Chief Executive Officer.

The Company's  business  segments are managed  through its Executive  Committee,
which  is the  senior  decision  making  group  of the  Company.  The  Executive
Committee is comprised  of eleven  members  including  the  President  and Chief
Executive  Officer and  Executive  Vice  Presidents  who manage key business and
operational areas within the Company.

Both segments are managed by an executive  team that is  responsible  for sales,
marketing, sales support,  operations and certain administrative functions. Back
office support is provided to each segment  through  executives  responsible for
lending administration, information systems, finance, legal and administration.

The accounting  policies of the segments are the same as those described in Note
2, "Summary of  Significant  Accounting  Policies".  All operating  revenues and
expenses  are  directly  assigned to  business  segments  in  determining  their
operating income.  Significant  intersegment  transactions are quantified in the
table below.

Since SFAS No. 131 requires no segmentation or methodology standardization,  the
organizational  structure of the institution and the allocation methodologies it
employs  result in business  line  financial  results  that are not  necessarily
comparable  across companies.  As such, the Company's  business line performance
may not be directly  comparable  with similar  information  from other  consumer
finance companies.


<PAGE> 39


Financial highlights by lines of business were as follows:
<TABLE>

(Dollars in thousands)                             Year Ended December 31,
                                      1998                  1997                1996
                           --------------------- --------------------- ----------------------
                             Consumer   Consumer   Consumer   Consumer   Consumer    Consumer
                              Finance    Banking    Finance    Banking    Finance     Banking

Condensed income statement:
<S>                         <C>        <C>       <C>         <C>       <C>          <C>
Net interest income 
 after provision for 
 loan losses                $188,051   $ 15,381  $ 165,702   $ 14,903  $ 182,585    $ 13,790
Other operating income        26,380        767     26,063        492     26,782         423
Operating expenses           136,275      6,717    124,554      6,575    117,902       6,160
                           ---------  ---------  ---------  ---------  ---------    --------

Income before income
   taxes                      78,156      9,431     67,211      8,820     91,465       8,053
Income taxes                  31,092      3,608     26,370      3,374     33,868       3,132
                           ---------  ---------  ---------  ---------  --------- -----------

Net income                 $  47,064  $   5,823  $  40,841  $   5,446  $  57,597 $     4,921
                           =========  =========  =========  =========  ========= ===========

</TABLE>


Other disclosures:
                                               December 31,
                                     1998                   1997 
                           ----------------------     ---------------------
                          Consumer       Consumer       Consumer     Consumer
                           Finance        Banking        Finance      Banking

Total assets            $ 2,415,476     $ 329,234     $ 2,231,257   $ 278,349

The  financial  results of each segment are derived from the  Company's  general
ledger system.  Certain  adjustments  have been made to recorded  general ledger
accounts to appropriately  reflect results of operations and financial  position
transfers among segments.


<PAGE> 40


Note 16   Approximate Fair Values of Financial Instruments

A summary of the approximate fair values of the Company's financial instruments,
as compared to their carrying values, is set forth in the following table:
<TABLE>

(Dollars in thousands)
                                              December 31, 1998          December 31, 1997
                                         -------------------------    -----------------------
                                           Carrying    Approximate     Carrying   Approximate
                                             Value      Fair Value       Value     Fair Value
<S>                                 <C>  <C>             <C>          <C>         <C>        
Consumer finance receivables   Note 5    $  2,574,396    2,530,486    $ 2,328,712 $ 2,270,350
Investment securities          Note 6         150,820      150,820        154,475     154,475
Short-term debt                Note 7         560,823      560,823        357,532     357,532
Long-term debt                 Note 8       1,427,167    1,451,704      1,472,872   1,503,647
Customer deposits              Note 9         187,518      189,717        163,185     163,569

</TABLE>


See Note 2 and the referenced Notes for additional information.



Note 17   Selected Quarterly Financial Data (Unaudited)

A summary of the quarterly  results of operations  for the years ended  December
31, 1998 and 1997 is set forth below:
<TABLE>

                                                     Quarter Ended
                               March 31,           June 30,         September 30,        December 31,
<S>                          <C>       <C>       <C>       <C>      <C>       <C>      <C>       <C> 
(Dollars in thousands)       1998      1997      1998      1997     1998      1997     1998      1997
                          -------   -------   -------   -------   -------  -------  -------   -------

Net interest income 
 before provision for
 credit losses            $66,907   $60,932   $67,957   $61,384   $71,791   $58,474  $76,537  $66,415
                          -------   -------   -------   -------   -------   -------  -------  -------

Provision for credit 
 losses                    18,000    15,400    18,300    15,600    21,800    16,200   21,660   19,400
Other income                6,489     6,066     5,777     6,989     7,844     6,592    7,037    6,908
Other expenses             32,941    31,807    32,026    29,425    32,456    30,055   41,952   32,778
Goodwill amortization
 expense                    1,019     1,766       866     1,766       866     1,766      866    1,766
                          -------   -------   -------    ------  --------  --------  -------  -------

Income before income taxes 21,436    18,025    22,542    21,582    24,513    17,045   19,096   19,379

Income tax provision        8,500     7,100     8,900     8,500     9,700     6,800    7,600    7,344
                          -------   -------   -------   -------  --------  --------  -------  -------

Net income               $ 12,936   $10,925   $13,642   $13,082  $ 14,813   $10,245  $11,496  $12,035
                         ========   =======   =======   =======  ========   =======  =======  =======
</TABLE>


<PAGE> 41


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

          None.


                                            PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a) Index of Documents filed as a part of this Report:

     1.  Financial Statements

         Included in Part II of this Report:
                                                                           PAGE

         Reports of Independent Certified Public Accountants.................19

         Aristar, Inc. and Subsidiaries:
           Consolidated Statements of Financial Condition
            at December 31, 1998 and 1997....................................21
           Consolidated Statements of Operations, Comprehensive Income
            and Retained Earnings for the Years Ended December 31, 1998,
            1997 and 1996....................................................22
           Consolidated Statements of Cash Flows
            for the Years Ended December 31, 1998, 1997 and 1996.............23
           Notes to Consolidated Financial Statements........................24

       2.  Financial Statement Schedules

           All  schedules are omitted  because of the absence of the  conditions
           under which they are required or because the required  information is
           set forth in the financial statements or related notes.

       3.  Exhibits

           Included in Part IV of this Report:

      Exhibit
       Number

        (2)  (a)  Agreement  dated as of April 30, 1996,  between  Great  
                  Western Bank and First  Community Financial Services, Inc. (1)
             (b)  Amendment to Exhibit (2) (a) dated as of August 31, 1996. (2)
             (c)  Agreement  dated as of April 30, 1996, between Great Western 
                  Bank and Blazer Financial Services, Inc. (1)
             (d)  Amendment to Exhibit (2) (c) dated as of August 31, 1996. (2)


<PAGE> 42


             (e)  Agreement dated as of April 30, 1996, between Great Western
                  Bank and Blazer Financial Services, Inc. of Florida. (1)
             (f)  Amendment to Exhibit (2) (e) dated as of August 31, 1996. (2)
             (g)  Agreement dated as of December 31, 1996, between Great Western
                  Financial Corporation and Aristar, Inc. (3)
        (3)  (a)  Certificate of Incorporation of Aristar, Inc. as presently in
                  effect.  (4)
             (b)  By-Laws of Aristar, Inc. as presently in effect.  (4)
        (4)  (a)  Indenture dated as of July 15, 1984, between Aristar, Inc. and
                  Bank of Montreal Trust Company, as trustee.  (5)
             (b)  First supplemental indenture to Exhibit (4)(a) dated as of 
                  June 1, 1987.  (5)
             (c)  Indenture dated as of August 15, 1988 between Aristar, Inc. 
                  and Bank of Montreal Trust Company, as trustee.   (6)
             (d)  Indenture dated as of May 1, 1991 between Aristar, Inc. and 
                  Security Pacific National Bank, as trustee.   (7)
             (e)  Indenture dated as of May 1, 1991 between Aristar, Inc. and
                  The First National Bank of Boston, as trustee.  (7)
             (f)  Indenture dated as of July 1, 1992 between Aristar, Inc. and
                  The Chase Manhattan Bank, N.A., as trustee. (5)
             (g)  Indenture dated as of July 1, 1995 between Aristar, Inc. and 
                  The Bank of New York, as trustee. (6)
             (h)  Indenture dated as of October 1, 1997 between Aristar, Inc.
                  and First Union National Bank, as trustee. (7)
             (i)  Indenture dated as of November 15, 1997 between Aristar, Inc. 
                  and First Union National Bank, as trustee. (9)
             (j)  The  registrant  hereby agrees to furnish the  Securities  and
                  Exchange   Commission   upon   request   with  copies  of  all
                  instruments  defining  rights of holders of long-term  debt of
                  Aristar and its consolidated subsidiaries.
        (10) Income Tax Allocation Agreement dated as of December 15, 1995 
             between Aristar, Inc. and Great Western Financial Corporation. (10)
        (12) Statement Re: Computation of Ratios.
        (23) Consents of Independent Certified Public Accountants.
        (24) Power of Attorney included on Page 44 of the Form 10-K.
        (27) Financial Data Schedule.


<PAGE> 43



             (1)  Incorporated by reference to Registrant's  Quarterly Report on
                  Form 10-Q for the  quarter  ended March 31,  1996,  Commission
                  file number 1-3521.
             (2)  Incorporated by reference to Registrant's  Quarterly Report on
                  Form 10-Q for the quarter ended September 30, 1996, Commission
                  file number 1-3521.
             (3)  Incorporated  by reference to  Registrant's  Current Report on
                  Form 8-K dated  December  31,  1996,  Commission  file  number
                  1-3521.
             (4)  Incorporated  by reference to  Registrant's  Annual  Report on
                  Form 10-K for the year ended  December  31,  1987,  Commission
                  file number 1-3521.
             (5)  Incorporated  by reference to  Registrant's  Current Report on
                  Form 8-K dated May 29, 1991, Commission file number 1-3521.
             (6)  Incorporated  by reference to  Registrant's  Current Report on
                  Form 8-K dated June 24,1992, Commission file number 1-3521.
             (7)  Incorporated by reference to Registrant's  Quarterly Report on
                  Form 10-Q for the quarter ended June 30, 1995, Commission file
                  number 1-3521.
             (8)  Incorporated  by reference to  Registrant's  Current Report on
                  Form 8-K dated October 6, 1997, Commission file number 1-3521.
             (9)  Incorporated by reference to Registrant's Report on Form 424B2
                  dated November 6, 1997, Commission file number 1-3521.
             (10) Incorporated  by reference to  Registrant's  Annual  Report on
                  Form 10-K for the year ended  December  31,  1995,  Commission
                  file number 1-3521.

        (b)  Reports on Form 8-K

        No  reports on Form 8-K were  filed  during  the period  covered by this
Report.


<PAGE> 44




                                              SIGNATURES

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

    ARISTAR, INC.

    By    /s/ Douglas G. Wisdorf                           March 24, 1999
    Douglas G. Wisdorf, Senior Vice President              Date
    and Chief Financial Officer
    (Principal Accounting Officer)


                               POWER OF ATTORNEY

    Each person  whose  signature  appears  below hereby  authorizes  Douglas G.
    Wisdorf as  attorney-in-fact  to sign on his behalf as an individual  and in
    every capacity stated below,  and to file all amendments to the registrant's
    Form 10-K, and the registrant hereby confers like authority to sign and file
    in its behalf.

    Pursuant to the  requirements  of the Securities  Exchange Act of 1934, this
    report  has been  signed  below by the  following  persons  on behalf of the
    registrant and in the capacities indicated on March 24, 1999.

    /s/ Craig J. Chapman                    
    Craig J. Chapman, President and Director
    (Principal Executive Officer)


    /s/ Craig E. Tall                       
    Craig E. Tall, Director


    /s/ Fay L. Chapman                      
    Fay L. Chapman, Director


    /s/ James B. Fitzgerald                 
    James B. Fitzgerald, Director


    /s/ William A. Longbrake                
    William A. Longbrake, Director