--------------------------------------------------------------------------------

United States Securities and Exchange Commission Washington, D.C. 20549

                                   Form 10-K

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

    For the fiscal year ended December 31, 1999

                                       or

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    Commission file number 1-5920

                           Bankers Trust Corporation

             (Exact Name of Registrant as Specified in Its Charter)

          New York                             13-6180473
(State or other Jurisdiction of             (I.R.S. Employer
 Incorporation or Organization)            Identification No.)

    130 Liberty Street
       New York, NY                              10006
  (Address of Principal                        (Zip Code)
    Executive Offices)

                                 (212) 250-2500
              (Registrant's Telephone Number, Including Area Code)
          Securities registered pursuant to Section 12(b) of the Act:

                                                                  Name Of Each
                                                                  Exchange On
                  Title of Each Class                           Which Registered

Adjustable Rate Cumulative Preferred Stock, Series Q     New York Stock Exchange

Depositary Shares representing a one-hundredth interest
   in a share of Adjustable Rate Cumulative Preferred
   Stock, Series Q ($2,500 Liquidation Preference)       New York Stock Exchange

Adjustable Rate Cumulative Preferred Stock, Series R     New York Stock Exchange

Depositary Shares representing a one-hundredth interest
   in a share of Adjustable Rate Cumulative Preferred
   Stock, Series R ($2,500 Liquidation Preference)       New York Stock Exchange

7 3/4% Cumulative Preferred Stock, Series S ($2,500
   Liquidation Preference)                               New York Stock Exchange

Depositary Shares representing a one-hundredth interest
   in a share of 7 3/4% Cumulative Preferred Stock,
   Series S ($2,500 Liquidation Preference)              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 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. |_|

      Because the registrant is a wholly-owned subsidiary of Deutsche Bank AG,
none of the registrant's outstanding voting stock is held by non-affiliates of
the registrant. As of the date hereof, 1 share of the registrant's common stock,
$1 par value, was issued and outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE
                                      None
<PAGE>
--------------------------------------------------------------------------------

Form 10-K Cross-Reference Index

Part I

Item No.                                                                   Pages

1. Business
  Description of Business                                                     67
  Supplemental Financial Data
    International Operations                                               9, 47
    Distribution of Assets, Liabilities and
      Stockholders' Equity; Interest Rates and
      Interest Differential                                                62-64
    Investment Portfolio                                                   32-33
    Loan Portfolio                                              19-23, 31, 33-34
    Summary of Credit Loss Experience                              16-18, 31, 35
    Deposits                                                                  66
    Return on Equity and Assets                                                2
    Short-Term Borrowings                                                     35
2. Properties                                                                 70
3. Legal Proceedings                                                          70
4. Submission of Matters to a Vote of Security Holders                         *

Part II
  5. Market for Registrant's Common Equity and
      Related Stockholder Matters                                      39-40, 61
  6. Selected Financial Data                                                   2
  7. Management's Discussion and Analysis of Financial
      Condition and Results of Operations                                      3
  7a. Quantitative and Qualitative Disclosures
      About Market Risk                                                    12-14
  8. Financial Statements and Supplementary Data
        Bankers Trust Corporation and Subsidiaries
        (Consolidated)                                                     24-28
        Notes to Financial Statements                                      29-59
        Independent Auditors' Report                                          60
        Selected Quarterly Financial Data                                     61
  9. Changes in and Disagreements with Accountants
      on Accounting and Financial Disclosure                                   *

Part III
 10. Directors and Executive Officers of the Registrant
    Directors                                                                 71
    Executive Officers                                                        72
    Section 16(a) Beneficial Ownership
      Reporting Compliance                                                     *
 11. Executive Compensation                                                75-77
 12. Security Ownership of Certain Beneficial Owners
      and Management                                                           *
 13. Certain Relationships and Related Transactions                           73

Part IV
 14. Exhibits, Financial Statement Schedules and
        Reports on Form 8-K
            (a) (1) Financial Statements-See Item 8.
                (2) Financial Statement Schedules
                    All schedules normally required by Form 10-K are omitted
                    since they are either not applicable or the required
                    information is shown in the financial statements or the
                    notes thereto.
                (3) Exhibits
                    3. Articles of Incorporation and By-laws,
                       as amended                                             **
                    4. Instruments Defining the Rights of
                       Security Holders, Including Indentures
                       (i) Long-Term Debt Indentures                         ***
                   10. Material Contracts
                      (i) Contracts not made in the ordinary course
                          of business                                         **
                      (ii) (C) Acquisition or Sale of any Property,
                               Plant or Equipment                             **
                      (ii) (D) Leases for Principal Premises
                               described on page 70                           **
                      (iii) (A) Management Contracts and
                                Compensation Plans                            **
             12. Statements Re Computation of Ratios                          **
             21. Subsidiaries of the Registrant                               **
             23. Consent of Experts                                           **
             24. Power of Attorney                                            **
             27. Financial Data Schedule
             99. Additional Exhibits
                 (1) Unaudited Pro Forma Condensed Financial Statements for   **
                     the year ended December 31, 1999.
      (b)   Reports on Form 8-K-The Corporation did not file any reports on Form
            8-K during the quarter ended December 31, 1999.

--------------------------------------------------------------------------------

*     Not applicable.

**    A copy of any exhibit not contained herein may be obtained by writing to
      James T. Byrne, Jr., Office of the Secretary, Bankers Trust Corporation,
      130 Liberty Street, Mail Stop 2310, New York, NY 10006.

***   The Corporation hereby agrees to furnish to the Commission, upon request,
      a copy of any instruments defining the rights of holders of long-term debt
      issued by Bankers Trust Corporation or its subsidiaries.

This report on Form 10-K has not been approved or disapproved by the Securities
and Exchange Commission nor has the Commission passed upon the accuracy or
adequacy of this report.

                                Bankers Trust Corporation and its Subsidiaries 1

<PAGE>

Table 1 Five-Year Summary of Selected Financial Data*

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
($ in millions, except per share data)                     1999          1998           1997           1996           1995
----------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>            <C>            <C>            <C>
For the Year
  Net interest revenue                                   $   807       $  1,372       $  1,359       $  1,057       $    884
  Noninterest revenue                                      3,500          3,757          4,861          4,117          3,129
  Net income (loss)                                      $(1,603)      $    (73)      $    866       $    766       $    311
============================================================================================================================
Per Common Share
  Basic Earnings (Loss) Per Share                            N/A       $  (1.05)      $   8.15       $   7.12       $   2.62
  Diluted Earnings (Loss) Per Share                          N/A       $  (1.05)      $   7.66       $   6.76       $   2.54
  Cash dividends declared                                  $1.00       $   4.00       $   4.00       $   4.00       $   4.00
   --as a percentage of net income                           N/M            N/M             52%            59%           157%
  Book value, end of year                                    N/A          42.66          49.06          49.21          45.73
  Market price
    High                                                     N/A            136 7/16       133 5/8         90 7/8         72
    Low                                                      N/A             45             74             61             49 3/4
    End of year                                              N/A             85 7/16       112 7/16        86 1/4         66 1/2
  Price/earnings ratio, end of year                          N/A            N/M           13.8x          12.1x          25.4x
  Cash dividend yield, end of year                           N/A            4.7%           3.6%           4.6%           6.0%

At Year End
  Total assets                                           $68,157       $133,115       $140,102       $122,543       $106,199
  Long-term debt not included in risk-based capital       12,582         14,890         11,275          8,732          7,127
  Long-term debt included in risk-based capital            2,424          3,113          3,312          2,576          2,360
  Mandatorily redeemable capital securities
    of subsidiary trusts holding
    solely junior subordinated deferrable interest
    debentures included in risk-based capital              1,428          1,420          1,472            730             --
  Preferred stock of subsidiary                               --             --             --            250            250
  Preferred stock (Corporation)                              376            394            658            810            865
  Common stockholders' equity                              3,974          4,302          5,050          5,068          4,608
  Total stockholders' equity                               4,350          4,696          5,708          5,878          5,473
Profitability Ratios
  Return on average common stockholders' equity              N/M            N/M           15.6%          14.5%           5.7%
  Return on average total stockholders' equity               N/M            N/M           14.6%          13.3%           5.9%
  Return on average total assets                             N/M            N/M            .63%           .63%           .28%

Capital Ratios
  Common stockholders' equity to total assets,
    end of year                                              5.8%           3.2%           3.6%           4.1%           4.3%
  Total stockholders' equity to total assets,
    end of year                                              6.4%           3.5%           4.1%           4.8%           5.2%
  Average total stockholders' equity to average
    total assets                                             4.6%           3.3%           4.4%           4.7%           4.7%
  Bankers Trust Corporation:
    Risk-Based Capital Ratios
        Tier 1 Capital                                      10.4%           7.5%           8.3%           9.3%           9.0%
        Total Capital                                       18.4%          13.6%          14.1%          13.8%          14.0%
    Leverage Ratio                                           7.3%           3.5%           4.4%           5.9%           5.4%
  Bankers Trust Company:
    Risk-Based Capital Ratios
        Tier 1 Capital                                      16.5%          10.5%           9.0%           9.3%           9.5%
        Total Capital                                       18.9%          13.4%          12.3%          12.9%          12.8%
    Leverage Ratio                                          12.3%           5.7%           5.4%           5.3%           5.1%

Employees, at December 31
  In domestic offices                                      6,342         11,005         10,585         11,055         10,137
  In foreign offices                                       1,433          9,536          8,070          6,881          6,365
----------------------------------------------------------------------------------------------------------------------------
    Total                                                  7,775         20,541         18,655         17,936         16,502
============================================================================================================================
</TABLE>

* Certain 1999 amounts are not comparable to prior year periods due to
significant business and net financial asset transfers to Deutsche Bank
entities, charges reflecting changes in management intent and responsibility
regarding certain assets and the sale of Bankers Trust Australia Limited in
1999.

N/M Not Meaningful.

N/A--Information is not applicable as Deutsche Bank AG acquired all outstanding
shares of common stock of Bankers Trust Corporation from its shareholders at a
price of $93.00 per share on June 4, 1999.

2 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------
                                FINANCIAL REVIEW
--------------------------------------------------------------------------------

Management's discussion and analysis of Bankers Trust Corporation's results of
operations and financial condition appears on pages 3 through 23. The discussion
and analysis should be read in conjunction with the financial statements and
supplemental financial data, which begin on page 24.

Acquisition by Deutsche Bank AG

Change in Control

On June 4, 1999, the change-in-control ("COC") date, pursuant to an agreement
dated as of November 30, 1998, between Deutsche Bank AG ("Deutsche Bank") and
Bankers Trust Corporation ("Bankers Trust"), Deutsche Bank, through its U.S.
holding corporation, Taunus Corporation ("Taunus"), acquired all of the
outstanding shares of common stock of Bankers Trust from its shareholders at a
price of $93.00 per share (the "Acquisition"). Deutsche Bank accounted for the
Acquisition as a purchase. No purchase accounting adjustments were pushed down
to Bankers Trust.

      On June 4, 1999, all Bankers Trust employee deferred compensation amounts
vested in full. Employer contributions to individual employee retirement
accounts also vested. In addition, all bonus- eligible employees on the date of
COC became entitled to a pro rata bonus which was paid in cash on July 2, 1999
for that portion of the 1999 performance year ending on the COC date. The pro
rata bonus was based on the greater of an employee's total (cash and deferred
stock) 1998 performance bonus or the employee's average total 1996, 1997 and
1998 performance bonus awards.

      In conjunction with the Acquisition, during the second quarter of 1999
Bankers Trust Corporation together with its subsidiaries (the "Corporation" or
the "Firm") incurred pre-tax charges of approximately $1.1 billion in
COC-related costs, principally due to the aforementioned vesting of all employee
deferred compensation amounts and related pro-rata bonus awards as well as a
pre-tax restructuring charge of $459 million. Also, in connection with the
Acquisition, the Corporation incurred other charges reflecting a change in
management's intention regarding certain assets as a result of integrating the
Corporation into Deutsche Bank, a change in certain pricing methodologies in
order to conform to those of Deutsche Bank, and the transfer of certain
available for sale securities to Deutsche Bank related entities based on changes
in management responsibility. These one-time charges are included in Deutsche
Bank's consolidated financial statements as of June 30, 1999 as part of the
goodwill associated with the Acquisition. The goodwill is being amortized over
15 years.

Disposition of Assets

On June 5, 1999, Bankers Trust transferred its wholly-owned subsidiary BT Alex.
Brown Incorporated ("BTAB") and substantially all of its interest in Bankers
Trust International PLC ("BTI") to Deutsche Bank Securities Inc. ("DBSI") and
Deutsche Holdings (BTI) Ltd., respectively, which are wholly-owned subsidiaries
of Deutsche Bank. The transfer of BTAB to DBSI took the form of an exchange of
stock pursuant to which BTAB became a wholly-owned subsidiary of DBSI and
Bankers Trust received shares of DB U.S. Financial Markets Holding Corporation
("DBUSH"), the parent of DBSI. In the third quarter of 1999, the Corporation
sold its shares of DBUSH to Taunus for approximately $800 million. The transfer
of substantially all of Bankers Trust's interest in BTI was for cash in the
amount of approximately $1.7 billion.

      On August 31, 1999, the Corporation completed the sale of Bankers Trust
Australia Limited ("BTAL"), a wholly-owned subsidiary, to the Principal
Financial Group for a price of approximately $1.3 billion. Prior to the sale,
BTAL remitted to the Corporation a dividend for accumulated retained earnings
that included proceeds from BTAL's sale of its investment banking division to
Macquarie Bank. The Corporation also received cash for the assumption of certain
BTAL long-term debt. In addition, according to the sale agreement, the
Corporation is entitled to receive an additional payment. The amount and timing
of such payment is not known at this time. When such payment is received, it
will be reflected in the Corporation's results of operations. The Corporation
recognized a pre-tax gain of approximately $779 million in the third quarter of
1999 on the sale of BTAL.

      In connection with the Acquisition and in addition to the foregoing
transactions, the Corporation has and will continue to transfer certain entities
and financial assets and liabilities to Deutsche Bank related entities. The
consideration received and to be received for such transactions was and will be
fair market value of the financial assets and liabilities at and on the date of
transfer. In addition, the Corporation's money market related funding
activities, which are short-term in nature, are expected to be significantly
reduced over time.

      Prior to the Acquisition, the Corporation was a global financial
institution, providing products and services to its clients worldwide.
Subsequent to the Acquisition and associated reorganization activities, the
Corporation and its subsidiaries conduct their business primarily in the
Americas, focusing their activities principally in the asset management,
lending, institutional services, private equity, and private banking businesses.

Capital Contribution

In conjunction with the Acquisition and to strengthen the Corporation's capital
base, Deutsche Bank made a capital contribution of $1.4 billion in the second
quarter of 1999.

Results of Operations

Summary of 1999 Results

For the year 1999, the Corporation reported a net loss of $1,603 million,
compared to a net loss of $73 million in 1998.

      For the year, total net revenue (net interest revenue after provision for
credit losses related to loans plus noninterest revenue) of $4.365 billion was
down $724 million, from 1998 revenue of $5.089 billion. Total noninterest
expenses for the year increased $614 million, or 12 percent, from 1998. As
previously mentioned, in the second quarter of 1999 the Corporation incurred
pre-tax charges of

                                Bankers Trust Corporation and its Subsidiaries 3
<PAGE>

--------------------------------------------------------------------------------

approximately $1.1 billion in COC-related costs and a pre-tax restruc turing
charge of $459 million. During the fourth quarter of 1999, the Corporation
recorded additional charges related to restructuring and other related
activities of $174 million in connection with its continuing efforts to
streamline support functions and realign certain business activities. The
results for 1999 also include the aforementioned gain on the sale of BTAL.

      At December 31, 1999, total cash basis loans amounted to $737 million, up
from $392 million at December 31, 1998.

      Prior to the Acquisition in the second quarter of 1999, the Corporation
completed the sale of its remaining stake in Consorcio, a Chilean insurance
company. The impact of the sale was immaterial to the Corporation's results of
operations.

      Because of the significant business and net financial asset transfers to
Deutsche Bank entities, the aforementioned other charges reflecting changes in
management intent and responsibility in the second quarter of 1999 and the sale
of BTAL in the third quarter of 1999, the Corporation's historical financial
statements are not fully comparable for all periods presented.

Business Segments

Business segments results, which are presented in accordance with U.S. generally
accepted accounting principles, are derived from internal management reports.

      In conjunction with the Acquisition, the Corporation realigned its
business activities to conform to Deutsche Bank's management structure. In this
regard, Retail and Private Banking focuses on the Corporation's private banking
activities. The Asset Management division combines the Corporation's
institutional asset management and retail investment fund businesses. Global
Corporates and Institutions includes the Corporation's commercial banking and
investment banking activities as well as trading activities. This business
segment also includes credit business, trade finance, structured finance and
cash management in addition to the Corporation's private equity business. Global
Technology and Services includes four product groups: payments, securities
processing, custody services and electronic banking services. Refer to Note 22
of Notes to Financial Statements for further discussion of the business
segments' activities. Corporate Items include revenue and expenses that have not
been allocated to business segments.

      Prior period results have been restated for changes in management
structure.

The information presented below reflects the results by business segment (in
millions):

                                                        Total Non-        Pretax
Year Ended                                  Total Net     interest       Income/
December 31, 1999                             Revenue     Expenses        (Loss)
--------------------------------------------------------------------------------
Retail and Private Banking                    $   169      $   189      $   (20)
Asset Management                                  241          221           20
Global Corporates and Institutions              1,378        2,653       (1,275)
Global Technology and Services                    922          970          (48)
--------------------------------------------------------------------------------
Total Business Segments                         2,710        4,033       (1,323)
--------------------------------------------------------------------------------
Corporate Items                                 1,655        1,747          (92)
--------------------------------------------------------------------------------
Total                                         $ 4,365      $ 5,780      $(1,415)
================================================================================

                                                        Total Non-        Pretax
Year Ended                                  Total Net     interest       Income/
December 31, 1998                             Revenue     Expenses        (Loss)
--------------------------------------------------------------------------------
Retail and Private Banking                     $  187       $  175       $   12
Asset Management                                  253          155           98
Global Corporates and Institutions              2,567        3,058         (491)
Global Technology and Services                    946          900           46
--------------------------------------------------------------------------------
Total Business Segments                         3,953        4,288         (335)
--------------------------------------------------------------------------------
Corporate Items                                 1,136          878          258
--------------------------------------------------------------------------------
Total                                          $5,089       $5,166       $  (77)
================================================================================

                                                        Total Non-        Pretax
Year Ended                                  Total Net     interest       Income/
December 31, 1997                             Revenue     Expenses        (Loss)
--------------------------------------------------------------------------------
Retail and Private Banking                    $   173      $   176      $    (3)
Asset Management                                  191          137           54
Global Corporates and Institutions              3,499        2,739          760
Global Technology and Services                    915          832           83
--------------------------------------------------------------------------------
Total Business Segments                         4,778        3,884          894
--------------------------------------------------------------------------------
Corporate Items                                 1,442        1,097          345
--------------------------------------------------------------------------------
Total                                         $ 6,220      $ 4,981      $ 1,239
================================================================================

      The Retail and Private Banking business recorded a pre-tax loss of $20
million in 1999, compared to pre-tax income of $12 million in 1998. The 1999
results contain COC-related costs of approximately $21 million and reflect lower
revenue from commissions. In 1998, Retail and Private Banking reported pre-tax
income of $12 million, up $15 million from 1997. The increase reflected higher
revenue from fiduciary and funds management activities.

4 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

      Asset Management recorded pre-tax income of $20 million in 1999, compared
to pre-tax income of $98 million in 1998. The 1999 results contain COC-related
costs of approximately $18 million and higher personnel-related costs. Asset
Management pre-tax income of $98 million in 1998 increased $44 million from 1997
primarily due to higher revenue from fiduciary and funds management activities.

      The Global Corporates and Institutions business recorded a pre-tax loss of
$1,275 million in 1999, compared to a pre-tax loss of $491 million in 1998. The
1999 results contain COC-related costs of approximately $848 million. Trading
losses also negatively impacted the 1999 results. Total net revenue for 1999
includes the impact of a change in management's intention regarding certain
assets as a result of integrating the Corporation into Deutsche Bank, as well as
the transfer of certain securities available for sale to Deutsche Bank related
entities. Global Corporates and Institutions recorded a pre-tax loss of $491
million in 1998 compared to pre-tax income of $760 million in 1997. The 1998
results included losses related to widening credit spreads on high-yield debt
securities, mark-to-market losses on investments in the unit's private equity
portfolio and losses on securities available for sale resulting from the
economic turmoil experienced in the third quarter of 1998.

      The Corporation's Global Technology and Services business recorded a
pre-tax loss of $48 million for 1999 compared to pre-tax income of $46 million
in 1998. The 1999 results contain COC-related costs of approximately $86
million. Global Technology and Services pre-tax income of $46 million in 1998
decreased $37 million from 1997.

      Corporate Items include revenue and expenses that have not been allocated
to business segments, the operating income and expenses of BTAL and Consorcio,
and the results of smaller businesses that are not included in the main business
segments. Due to the sale of BTAL in the third quarter of 1999, its results are
not included as a reportable segment. Corporate Items also includes charges of
$633 million for restructuring and other related activities for the year ended
December 31, 1999.

Financial Reporting Matters

On January 1, 1999, the Corporation adopted Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use" (SOP 98-1). SOP 98-1 provides guidance as to when it is or is not
appropriate to capitalize the cost of software developed or obtained for
internal use. The adoption as of January 1, 1999 of SOP 98-1 did not have a
material impact on the Corporation's net income, stockholders' equity or total
assets.

      As used throughout this Annual Report, the term "International" signifies
information based on the domicile of the customer, whereas the term "Foreign
Office" refers to the location in which the transaction is recorded.

Statement of Income Analysis

Net Interest Revenue

Net interest revenue for 1999 was $807 million, down $565 million from 1998. Net
interest revenue for 1998 was $1.372 billion, up $13 million from 1997. The
significant transfers of entities and other financial assets and liabilities to
Deutsche Bank in the second half of 1999 negatively impacted net interest
revenue and levels of average interest-bearing assets and average
interest-bearing liabilities for the year ended December 31, 1999 as compared to
prior periods.

      The Firm's trading and risk management businesses include the use of
interest rate instruments and related derivatives. These activities can
periodically shift revenue between trading and net interest, depending on a
variety of factors, including risk management strategies. Therefore, the
Corporation views trading revenue and trading-related net interest revenue
together, which is discussed in the trading revenue section below.

      The Firm's nontrading-related net interest revenue, generally a more
stable component of overall net interest revenue than trading-related net
interest revenue, was $630 million in 1999, compared to $787 million in 1998.
This decrease was primarily due to the decrease in securities borrowed and
securities purchased under resale agreements. Nontrading-related net interest
revenue was $787 million in 1998 compared to $818 million in 1997.

      In 1999, the interest rate spread was 1.06 percent compared to 1.02
percent in 1998. Net interest margin increased to 1.18 percent from 1.16 percent
in 1998. The yield on interest-earning assets declined by 51 basis points. The
cost of interest-bearing liabilities declined by 55 basis points. Average
interest-earning assets totaled $69.4 billion at December 31, 1999, down $51.2
billion from December 31, 1998. The decrease was primarily attributable to the
decrease in trading account assets, securities borrowed and securities purchased
under resale agreements. Average interest-bearing liabilities totaled $67.8
billion at December 31, 1999, down $49.8 billion from December 31, 1998. The
decrease was primarily attributable to the decrease in securi ties sold under
repurchase agreements and interest-bearing deposits.


                                Bankers Trust Corporation and its Subsidiaries 5
<PAGE>

--------------------------------------------------------------------------------

      In 1998, the interest rate spread was 1.02 percent compared to 1.09
percent in 1997. Net interest margin decreased to 1.16 percent from 1.33
percent. The yield on interest-earning assets declined by 11 basis points. The
cost of interest-bearing liabilities declined by 4 basis points. Average
interest-earning assets totaled $120.7 billion at December 31, 1998, up $16.3
billion from December 31, 1997. The increase was primarily attributable to
increases in securities borrowed and securities available for sale. Average
interest-bearing liabilities totaled $117.6 billion at December 31, 1998, up
$17.5 billion from December 31, 1997. The increase was primarily attributable to
a rise in securities sold under repurchase agreements, long-term debt and
interest-bearing deposits in domestic offices.

Table 2 Net Interest Revenue Analysis

The table below presents the Corporation's trend of net interest revenue,
average balances and rates. For further details on these statistics, see pages
62 through 64.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
($ in millions) Year Ended December 31,                      1999           1998           1997
-----------------------------------------------------------------------------------------------
<S>                                                       <C>           <C>            <C>
Net interest revenue
Book basis                                                $   807       $  1,372       $  1,359
Tax equivalent adjustment*                                     15             31             26
-----------------------------------------------------------------------------------------------
Fully taxable basis                                       $   822       $  1,403       $  1,385
===============================================================================================
Average balances
Interest-earning assets                                   $69,411       $120,650       $104,334
Interest-bearing liabilities                               67,803        117,637        100,154
-----------------------------------------------------------------------------------------------
Earning assets financed by noninterest-bearing funds      $ 1,608       $  3,013       $  4,180
===============================================================================================
Average rates (fully taxable basis)
Yield on interest-earning assets                             6.39%          6.90%          7.01%
Cost of interest-bearing liabilities                         5.33           5.88           5.92
-----------------------------------------------------------------------------------------------
Interest rate spread                                         1.06           1.02           1.09
Contribution of noninterest-bearing funds                     .12            .14            .24
-----------------------------------------------------------------------------------------------
Net interest margin                                          1.18%          1.16%          1.33%
===============================================================================================
</TABLE>

*     The applicable combined federal, state and local incremental tax rate used
      to determine the amounts of the tax equivalent adjustments (which
      recognize the income tax savings on tax-exempt assets) was 41 percent for
      1999, 41 percent for 1998 and 41 percent for 1997.

Provision for Credit Losses -- Loans

The Corporation recorded a negative provision for credit losses related to loans
of $58 million for the year ended December 31, 1999. The provision for credit
losses related to loans amounted to $40 million in 1998 as compared with no
provision for 1997. A discussion of the Corporation's allowance for credit
losses--loans appears on page 16.

Trading Revenue

      The Corporation's trading activities in 1999 were significantly reduced,
reflecting the effects of integrating the Corporation into Deutsche Bank as well
as a continuation of risk reduction efforts begun in the third quarter of 1998.
In conjunction with the Acquisition, the Corporation anticipates further
curtailment of trading-related activities.

      Trading-related net interest revenue represents interest earned on cash
instruments held in the trading accounts less the cost to fund both cash and
derivatives positions.

6 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

      The table below presents the Firm's trading revenue and trading-related
net interest revenue by major category of market risk. These categories are
based on management's view of the predominant underlying risk exposure of each
of the Firm's trading positions.

                                                         Trading-
                                                          Related
                                                              Net
                                          Trading        Interest
(in millions)                             Revenue         Revenue         Total
--------------------------------------------------------------------------------
Year Ended December 31, 1999
Interest rate risk                         $ (165)           $244        $   79
Foreign exchange risk                         139              --           139
Equity and commodity risk                      68             (67)            1
--------------------------------------------------------------------------------
Total                                      $   42            $177        $  219
================================================================================
Year Ended December 31, 1998
Interest rate risk                         $ (427)           $593        $  166
Foreign exchange risk                         426              --           426
Equity and commodity risk                    (183)             (8)         (191)
--------------------------------------------------------------------------------
Total                                      $ (184)           $585        $  401
================================================================================
Year Ended December 31, 1997
Interest rate risk                         $  433            $603        $1,036
Foreign exchange risk                         277              --           277
Equity and commodity risk                     345             (62)          283
--------------------------------------------------------------------------------
Total                                      $1,055            $541        $1,596
================================================================================

Interest Rate Risk

As indicated above, a portion of the Firm's trading and risk man agement
activities involve positions in interest rate instruments and related
derivatives. The revenue from these activities can periodically shift between
trading and trading-related net interest revenue, depending on a variety of
factors, including risk management activities.

      In 1999, trading and trading-related net interest revenue was $79 million
compared to $166 million in 1998. The decrease reflects the integration of the
Corporation's trading assets into the Deutsche Bank entity and includes post
merger risk reduction initiatives.

      In 1998 trading and trading-related net interest revenue was $166 million
compared to $1.036 billion in 1997. The decrease was primarily attributable to
losses on high-yield securities, adverse market conditions in Latin America and
Asia, valuation adjustments to trading assets for widening counterparty credit
spreads, and Russian-related trading losses.

Foreign Exchange Risk

In 1999, trading revenue related to foreign exchange risk was $139 million,
compared to $426 million in 1998. The decrease in foreign exchange revenue is
primarily related to reduced revenue in Australian markets in the first six
months of 1999 coupled with the sale of BTAL in the third quarter of 1999.

      In 1998 trading revenue related to foreign exchange risk was $426 million,
up $149 million, or 54 percent, compared to 1997. The increase was principally
due to gains in the Asian and Australian foreign exchange markets.

Equity and Commodity Risk

Total trading and trading-related net interest revenue related to equity and
commodity risk was $1 million in 1999, an increase of $192 million from 1998
which decreased $474 million from 1997. The third quarter of 1998 included
losses in global proprietary equity portfolios caused by increased market
volatility, valuation adjustments related to the Corporation's European Equity
business as well as decreased activity in the equity derivative books.

Noninterest Revenue (Excluding Trading)

The following table presents noninterest revenue (in millions):

Year Ended December 31,                           1999         1998         1997
--------------------------------------------------------------------------------
Fiduciary and funds management                  $1,017       $1,108       $1,059
Corporate finance fees                             542        1,255        1,113
Other fees and commissions                         538          817          606
Net revenue from equity
 investments                                       356          302          224
Securities available for sale gains (losses)       (89)         (56)         158
Insurance premiums                                  86          256          287
Other                                            1,008          259          359
--------------------------------------------------------------------------------
Total                                           $3,458       $3,941       $3,806
================================================================================

      Fiduciary and funds management revenue was down $91 million, or 8 percent,
from 1998, which was up $49 million from 1997. The decrease in 1999 is due
primarily to the sale of BTAL in the third quarter of 1999. Higher global
private banking commissions and improved funds management revenue contributed to
the increase in 1998.

      Corporate finance fees were down $713 million, or 57 percent, from 1998,
which were up $142 million from 1997. Lower underwriting fees, loan syndication
fees and merger and acquisition activities, which is primarily attributable to
the transfer of BTAB to DBSI in June 1999, contributed to the decline in 1999.
Higher merger and acquisition fees in addition to higher financial advisory and
commitment fees contributed to the increase in 1998.

      Other fees and commissions were down $279 million, or 34 percent, from
1998, which were up $211 million from 1997. The decline in 1999 was primarily
due to lower fees for brokerage services resulting from the transfer of BTAB and
BTI to Deutsche Bank related entities. The increase in 1998 was primarily due to
higher fees for brokerage services principally resulting from the acquisition of
NatWest Markets' European equities business.

      Net revenue from equity investments was up $54 million, or 18 percent,
from 1998, which was up $78 million from 1997. Higher gains on sales of direct
equity investments contributed to the increase in both 1999 and 1998.

                                Bankers Trust Corporation and its Subsidiaries 7
<PAGE>

--------------------------------------------------------------------------------

      Securities available for sale losses were $89 million compared to
securities available for sale losses of $56 million in 1998. The 1999 results
reflect third party sale activity and the transfer of certain Latin American
debt securities to Deutsche Bank related entities based on changes in management
responsibility related to such securities following the COC date. Securities
available for sale losses in 1998 decreased $214 million from 1997. The 1998
results included losses on Russian, Asian and Latin American securities.

      Insurance premiums decreased $170 million, or 66 percent, from 1998. The
Corporation exited the insurance business with the sale of its remaining stake
in Consorcio, the Corporation's 50 percent owned Chilean insurance company, in
the second quarter of 1999. Insurance premiums in 1998 decreased $31 million, or
11 percent, from 1997. This decrease was mainly due to decreasing annuity sales
at Consorcio.

      Other noninterest revenue was $1.008 billion in 1999, an increase of $749
million from 1998 which decreased $100 million, or 28 percent, from 1997. The
1999 results included the pre-tax gain on the sale of BTAL. The current year
increase was partially offset by the recognition of cumulative translation
adjustments for certain legal entities transferred to affiliated Deutsche Bank
entities during 1999. The 1997 results included a pre-tax gain of $76 million on
the sale of a midtown Manhattan office building that was previously the
headquarters of the Corporation, a pre-tax gain of $62 million on the sale of
the Corporation's defined contribution recordkeeping and participant services
business, as well as a gain on the sale of 50 percent of the Corporation's stake
in Consorcio. The Corporation also recognized in 1997 a decline in value for
certain Southeast Asian investments that partially offset these gains.

Noninterest Expenses

The following table presents noninterest expenses (in millions):

Year Ended December 31,                             1999        1998        1997
--------------------------------------------------------------------------------
Salaries and commissions                          $1,039      $1,421      $1,273
Incentive compensation and
  employee benefits                                1,088       1,530       1,726
Change in control related incentive
  compensation and employee benefits               1,101          --          --
Agency and other professional
  service fees                                       430         501         391
Communication and data services                      206         252         231
Occupancy, net                                       198         218         181
Furniture and equipment                              221         252         224
Travel and entertainment                             114         171         142
Provision for policyholder benefits                  114         322         333
Other                                                636         499         423
Restructuring and other related activities           633          --          57
--------------------------------------------------------------------------------
Total                                             $5,780      $5,166      $4,981
================================================================================

      Total noninterest expenses for 1999 increased $614 million, or 12 percent,
from 1998. Salaries and commissions expense decreased by $382 million, or 27
percent, in 1999, primarily due to a decrease in the average number of employees
resulting from the transfer of BTAB and BTI in the second quarter of 1999, the
sale of BTAL in the third quarter of 1999 and staff reductions resulting from
the Acquisition. Incentive compensation and employee benefits decreased by $442
million, or 29 percent, primarily due to the decrease in the average number of
employees as previously mentioned. The number of full-time staff at December 31,
1999 was 7,775 compared to 20,541 at December 31, 1998.

      The 1999 results also included $1.1 billion of change-in-control related
incentive compensation and employee benefits, primarily as a result of
accelerated amortization of deferred compensation amounts as of the COC date.

      All other noninterest expenses totaled $2.552 billion compared with $2.215
billion in 1998. During 1999, the Corporation recorded pre-tax charges for
restructuring and other related activities totaling $633 million. Of this
amount, $459 million related to a restructur ing charge recorded in the second
quarter in conjunction with the Acquisition. This charge reflected $394 million
of severance and other termination-related costs as well as $65 million of other
costs primarily related to lease terminations and write-offs of fixed assets and
leasehold improvements. During the fourth quarter, the Corporation recorded
additional charges related to restructuring and other related activities of $174
million in connection with its con tinuing efforts to streamline support
functions and realign certain business activities. These charges reflected $116
million of severance and other termination-related costs, as well as $58 million
of other costs primarily related to the intended liquidation of certain
financial assets.

      The provision for policyholder benefits decreased $208 million from 1998.
The Corporation exited the insurance business with the sale of its remaining
stake in Consorcio in the second quarter of 1999.

      Total noninterest expenses for 1998 increased $185 million, or 4 percent,
from 1997. Salaries and commissions expense increased by $148 million, or 12
percent, in 1998, primarily due to an increase in the average number of
employees and higher annual salaries. Incentive compensation and employee
benefits decreased by $196 million, or 11 percent, due to the decline in
financial performance, partly offset by employee stock awards granted in 1997.
The number of full-time staff at December 31, 1998 was 20,541 compared to 18,655
at December 31, 1997.

      All other noninterest expenses totaled $2.215 billion in 1998 compared
with $1.982 billion in 1997. The 1998 results reflected a $60 million fine to
federal authorities and a $3.5 million payment to the State of New York as part
of an agreement to resolve an investigation concerning inappropriate transfers
of unclaimed funds and related recordkeeping problems that occurred between 1994
and early 1996. Included in the 1998 amount were additional costs for agency and
other professional service fees due to integration and continuing costs
associated with the acquisition of NatWest Markets' European equities business.


8 Bankers Trust and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

Taxes

Income tax expense for 1999 amounted to $188 million, compared to an income tax
benefit of $4 million in 1998 and income tax expense of $373 million in 1997.
The effective tax rate for 1999 was (13) percent, while the 1998 and 1997
effective tax rates were 5 percent and 30 percent, respectively.

Year 2000

The Corporation's computer systems, applications and infrastructure operated
successfully on the first business day of the new millennium. It did not become
necessary for the Corporation to invoke any of its contingency plans, including
those related to possible failures by third parties. The Corporation's Year 2000
expenditures during 1999 aggregated approximately $56 million and largely
represented the redeployment of existing operations and information technology
resources. The cost of any remaining efforts related to the Year 2000 is not
expected to be material.

International Operations

The Corporation's assets and results of operations for 1999, 1998 and 1997 have
been allocated between domestic and international operations in Note 23 of Notes
to Financial Statements. This analysis, which is based on the domicile of the
customer, incorporates numerous subjective assumptions and, as a result, is
different from legal entity and segment results shown elsewhere in this report.
Management views the operation of the Corporation on a segment basis, as
disclosed on page 4.

      International net loss for 1999 and 1998 totaled $1,134 million and $211
million, respectively. Net income from domestic operations was a negative $469
million during 1999 and a positive $138 million for 1998, therefore, the ratio
of international to total net income is not meaningful. This ratio for 1997 was
26 percent.

      International total assets were $18.6 billion at December 31, 1999
compared to $63.1 billion at December 31, 1998, which represented 27 percent and
47 percent of total consolidated assets, respectively.

      The transfer of most of the Corporation's international operations to
Deutsche Bank is the primary reason for the decline in international total
assets during 1999. Much of the net loss in 1999 is due to the allocation of a
significant portion of the COC-related and restructuring charges to
international operations.

      The overall losses during 1998 from international operations were
primarily due to Asia and the Western Hemisphere. During 1998, the Asian region
suffered a loss of $210 million as compared to a loss of $44 million during
1997. This loss was primarily due to trading losses. In 1998 the Western
Hemisphere had a loss of $96 million versus net income of $81 million in 1997.
This loss was attributable to losses on trading assets and losses on securities
available for sale.

      Domestic income decreased from $638 million in 1997 to $138 million in
1998. This decrease was primarily due to trading losses and a decrease in net
interest margins.

      International total assets were $63.1 billion at December 31, 1998
compared to $72.7 billion at December 31, 1997, which represented 47 percent and
52 percent of total consolidated assets, respectively. The $9.6 billion decrease
was primarily due to a reduction in Asian trading assets, partially offset by an
increase in European assets.


                                Bankers Trust Corporation and its Subsidiaries 9
<PAGE>

--------------------------------------------------------------------------------

Changes in Financial Condition

Balance Sheet Analysis

Table 3 below highlights the trends in the balance sheet over the past two
years. Because annual averages may tend to conceal trends and year-end balances
can be distorted by one-day fluctuations, fourth quarter averages for each year
are provided to give a better indication of trends in the balance sheet.

Table 3 Condensed Balance Sheets -- Fourth Quarter Averages

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
(in millions)                                                                  1999          1998           1997
----------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>          <C>            <C>
Assets
  Interest-earning
   Interest-bearing deposits with banks                                     $ 3,867      $  2,370       $  6,211
   Federal funds sold                                                         3,608         3,445          4,950
   Securities purchased under resale agreements                               5,478        19,316         23,074
   Securities borrowed                                                           --        17,903         16,588
   Trading assets                                                             6,221        25,206         30,447
   Securities available for sale
     Taxable                                                                  3,412        10,038          6,876
     Exempt from federal income taxes                                            16         1,692          1,237
----------------------------------------------------------------------------------------------------------------
       Total securities available for sale                                    3,428        11,730          8,113
   Loans
     Domestic offices                                                        16,132        12,847         10,800
     Foreign offices                                                          4,613        10,417          9,580
----------------------------------------------------------------------------------------------------------------
       Total loans                                                           20,745        23,264         20,380
   Customer receivables                                                         569         1,622          1,612
----------------------------------------------------------------------------------------------------------------
     Total interest-earning assets                                           43,916       104,856        111,375
  Noninterest-earning
   Cash and due from banks                                                    1,745         2,721          1,476
   Noninterest-earning trading assets                                         8,541        29,650         25,157
   All other assets                                                           8,774        11,853         10,694
   Allowance for credit losses--loans                                          (508)         (665)          (780)
----------------------------------------------------------------------------------------------------------------
Total                                                                       $62,468      $148,415       $147,922
================================================================================================================
Liabilities
  Interest-bearing
   Interest-bearing deposits
     Domestic offices                                                       $12,200      $ 18,891       $ 21,881
     Foreign offices                                                          7,659        16,650         20,966
----------------------------------------------------------------------------------------------------------------
       Total interest-bearing deposits                                       19,859        35,541         42,847
   Trading liabilities                                                           39         5,918          5,587
   Securities loaned and securities sold under repurchase agreements            210        20,650         24,200
   Other short-term borrowings                                                7,691        19,247         20,078
   Long-term debt                                                            13,915        18,645         13,050
   Mandatorily redeemable capital securities of subsidiary trusts
     holding solely junior subordinated deferrable interest debentures        1,427         1,419          1,472
----------------------------------------------------------------------------------------------------------------
     Total interest-bearing liabilities                                      43,141       101,420        107,234
  Noninterest-bearing
   Noninterest-bearing deposits                                               4,724         4,362          3,366
   Noninterest-bearing trading liabilities                                    4,516        26,454         20,803
   All other liabilities                                                      5,542        11,271         10,591
----------------------------------------------------------------------------------------------------------------
     Total Liabilities                                                       57,923       143,507        141,994
Preferred Stock of Subsidiary                                                    --           144             --
----------------------------------------------------------------------------------------------------------------
Stockholders' Equity
  Preferred stock                                                               392           394            688
  Common stockholders' equity                                                 4,153         4,370          5,240
----------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity                                                    4,545         4,764          5,928
----------------------------------------------------------------------------------------------------------------
Total                                                                       $62,468      $148,415       $147,922
================================================================================================================
</TABLE>


10 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

Liquidity and Capital Resources

Management believes that the Corporation has sufficient liquidity and capital
resources to meet the needs of its business operations.

Liquidity

Liquidity is the ability to have funds available at all times to meet the
commitments of the Corporation. As part of the Acquisition, the Corporation's
liquidity process has become an integral part of Deutsche Bank's global
liquidity process. Management's policy is designed to maintain Deutsche Bank's
ability to fund assets and meet any contractual financial obligations on a
timely basis at a fair market cost under any market conditions. While Deutsche
Bank and the Corporation manage their liquidity positions on a day-to-day basis
to meet ongoing funding needs, Deutsche Bank's planning and management process
also encompasses contingency planning to address even the most severe liquidity
events.

      Short-term unsecured financing for the Corporation is available under an
uncommitted credit line with its parent, Deutsche Bank. At December 31, 1999,
this credit line totaled over $5 billion. Of this amount, approximately $2
billion was drawn.

      The Corporation's consolidated long-term debt and mandatorily redeemable
capital securities of subsidiary trusts holding solely junior subordinated
deferrable interest debentures included in risk-based capital ("trust preferred
capital securities"), at December 31, 1999 totaled $16.4 billion, most of which
was unsecured, and consisted of $11.5 billion in senior borrowings, $3.5 billion
of subordinated debt, and $1.4 billion of trust preferred capital securities.
These liabilities mature between 2000 and 2037, as detailed in Notes 9 and 10 of
Notes to Financial Statements.

Capital Resources

The Corporation pursues capital management with the objective of enhancing its
ability to execute its global strategic business plans while retaining financial
flexibility. Management believes that a strong capital base is critical to
achieving these objectives.

      Consolidated total stockholder's equity totaled $4.350 billion on December
31, 1999, down $346 million, or 7 percent, from year end 1998, which was down
$1.012 million, or 18 percent, from year end 1997. The current year's decrease
was primarily due to the net operating loss of $1.6 billion offset in part by a
capital contribution from Deutsche Bank of $1.4 billion. The decrease in 1998
was primarily due to dividends declared on common and preferred stock and the
repurchase of common and preferred stock.

      The Corporation actively monitors compliance with bank regulatory capital
requirements, focusing primarily on the risk-based capital guidelines. The
Corporation manages its capital base and on- and off-balance sheet items to
ensure that it remains strongly capitalized.

      The Federal Reserve Board's risk-based capital guidelines address the
capital adequacy of bank holding companies and banks (collectively "banking
organizations"). These guidelines include a definition of capital, a framework
for calculating risk-weighted assets and minimum risk-based capital ratios to be
maintained by banking organizations. A banking organization's risk-based capital
ratios are calculated by dividing its qualifying capital by its risk-weighted
assets. The Federal Reserve Board also has a minimum Leverage ratio that is used
as a supplement to the risk-based capital ratios in evaluating the capital
adequacy of banks and bank holding companies. The Leverage ratio is calculated
by dividing Tier 1 Capital by adjusted quarterly average assets.

      The Corporation had previously adopted the market risk amendment to the
risk-based capital guidelines issued by the Federal Reserve, which requires the
use of internal models to measure market risk in the calculation of the
risk-weighted assets for trading accounts. This amendment is consistent with the
amendment to the Basle Capital Accord adopted by the Basle Committee on Banking
Supervision at the Bank for International Settlements ("the BIS").

      The following discussion of the risk-based capital and leverage ratios
should be read in conjunction with Note 15 of the Notes to Financial Statements,
which defines the components of Tier 1, Tier 2 and Tier 3 Capital, as well as
the regulatory guidelines for well- capitalized banks and bank holding
companies.

      The Corporation's and BTCo's regulatory capital ratios are presented in
Table 4.

      During 1999, the Corporation's Tier 1 Capital ratio increased 290 basis
points as the slight decline in Tier 1 Capital of $607 million was offset by the
significant decrease in risk-weighted assets of $25.1 billion. The Tier 1
Capital decrease was primarily caused by the 1999 net operating loss of $1.6
billion and the net decline in the other components of Tier 1 Capital of $.4
billion, partially offset by the capital contribution of $1.4 billion made by
Deutsche Bank in the second quarter of 1999. Risk-weighted assets decreased
principally because positions were liquidated or transferred to other Deutsche
Bank affiliates. The Total Capital ratio increased 480 basis points as the
decrease in risk-weighted assets more than offset the decline of $1.4 billion in
Total Capital. The Leverage ratio increased 380 basis points with the decrease
in Tier 1 Capital more than offsetting a decrease of $84.6 billion in adjusted
quarterly average assets.

      The negative effect of the aforementioned operating losses and positive
effect of the asset liquidations and transfers were also the main reasons for
comparative variances in BTCo's ratios. During 1999, BTCo's Tier 1 Capital ratio
increased 600 basis points as the decrease in Tier 1 Capital of $972 million was
more than offset by a reduction of $29.1 billion in risk-weighted assets. Total
Capital ratio increased 550 basis points as the reduction in risk-weighted
assets was more than enough to offset the decline of $2 billion in Total
Capital. The Leverage ratio increased 660 basis points as the decline in Tier 1
Capital was offset by the significant reduction of $69.7 billion in quarterly
average assets.

      Table 4 presents the regulatory capital ratios of the Corporation and BTCo
at December 31, 1999 and 1998 and the well-capitalized guidelines.

                               Bankers Trust Corporation and its Subsidiaries 11
<PAGE>

--------------------------------------------------------------------------------

Table 4 Regulatory Capital Ratios

                                                                            Well
                                    December 31,    December 31,     Capitalized
                                            1999            1998      Guidelines
--------------------------------------------------------------------------------
Corporation
Risk-Based Ratios
  Tier 1 Capital                           10.4%            7.5%            6.0%
  Total Capital                            18.4%           13.6%           10.0%
Leverage Ratio                              7.3%            3.5%            N/A
BTCo
Risk-Based Ratios
  Tier 1 Capital                           16.5%           10.5%            6.0%
  Total Capital                            18.9%           13.4%           10.0%
Leverage Ratio                             12.3%            5.7%            5.0%

N/A Not Applicable.

      The following were the essential components (in millions) used in
calculating the Corporation's and BTCo's risk-based capital ratios:

December 31,                                             1999               1998
--------------------------------------------------------------------------------
Corporation
Tier 1 Capital                                        $ 4,462            $ 5,069
Tier 2 Capital                                          3,399              3,812
Tier 3 Capital                                             --                400
--------------------------------------------------------------------------------
Total Capital                                         $ 7,861            $ 9,281
================================================================================
Total risk-weighted assets                            $42,823            $67,980
================================================================================

BTCo
Tier 1 Capital                                        $ 5,710            $ 6,682
Tier 2 Capital                                            851              1,858
--------------------------------------------------------------------------------
Total Capital                                         $ 6,561            $ 8,540
================================================================================
Total risk-weighted assets                            $34,657            $63,748
================================================================================

Risk Management

Market Risk

Market risk is the risk of losses in the value of the Corporation's portfolio
due to movements in market prices and rates. Market risk arises from the
Corporation's investment, trading, and client activities.

      One summary measure of market risk is Daily Price Volatility ("DPV"). The
Daily Price Volatility of a portfolio is the potential loss in fair value that
statistically would be exceeded only 1 percent of the time if that portfolio
were held unchanged for one day. As such, Daily Price Volatility falls within a
general class of risk measures that are referred to as Value at Risk ("VaR").
The Corporation's Daily Price Volatility is calculated using proprietary
simulation and risk modeling techniques. Table 5 provides information on the
Daily Price Volatility associated with the Corporation's market risk positions
during 1999. The table shows this information for the set of financial assets
and liabilities whose values are functions of market-traded variables
irrespective of accounting classification. This set of figures is labeled Total
Daily Price Volatility in the table. The table also reports information on the
Daily Price Volatility from the subset of market risk positions that are
reported as trading assets and liabilities. This set of figures is labeled
Trading Daily Price Volatility. Finally, the table reports information on the
Daily Price Volatility associated with the non-trading, market-sensitive
positions. This set of positions is labeled Non-Trading Daily Price Volatility,
and the information in this portion of the table reflects the incremental
contribution these positions have on the Corporation's Total Daily Price
Volatility.

      Effective October 1, 1999 the Corporation adopted the market risk VaR
models and methodologies that are used throughout the Deutsche Bank Group for
various purposes, including regulatory capital. Although the methodologies
employed by the former and current models differ in some respects, both models
meet the regulatory requirements and have been approved by the banking
regulators in the United States for use in risk-based capital. Therefore, the
1999 Daily Price Volatility Statistics for the overall portfolio in Table 5 are
generally comparable with the 1998  Daily Price Volatility Statistics for the
overall portfolio in Table 6.

      The prior period amounts have not been restated due to the complexities of
VaR models and of the correlation effects across risk classifications. In
addition, the quantitative risk measures presented for 1999 are not comparable
to those presented for 1998 due to the significant business and net financial
asset transfers to Deutsche Bank entities, as well as continued risk reduction
efforts begun in the third quarter of 1998. The Corporation's market risks at
December 31, 1999 were primarily from its private equity investments and
high-yield distressed debt positions, as well as positions arising from loan
trading, loan syndication and loan securitization businesses.


12 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

Table 5 BTC Daily Price Volatility Statistics for 1999 (in millions)

Total Daily Price Volatility

--------------------------------------------------------------------------------
                             Average        Minimum       Maximum   December 31,
Risk Class                      1999           1999          1999          1999
--------------------------------------------------------------------------------
Interest Rate                 $ 18.0          $ 4.3         $30.7         $ 5.1
Currency                         2.5            0.1          11.2           0.6
Equity                          22.6           10.2          37.7          11.7
Commodity                        0.6             --           1.8            --
Diversification                (12.4)            --            --          (4.6)
--------------------------------------------------------------------------------
Overall Portfolio             $ 31.3              *             *         $12.8
================================================================================

Trading Daily Price Volatility

--------------------------------------------------------------------------------
                             Average        Minimum       Maximum   December 31,
Risk Class                      1999           1999          1999          1999
--------------------------------------------------------------------------------
Interest Rate                  $11.1          $ 4.2         $18.4         $ 5.0
Currency                         2.3            0.1           7.8           0.6
Equity                           8.7            3.4          18.8           5.8
Commodity                        0.6             --           1.8            --
Diversification                 (7.0)            --            --          (3.7)
--------------------------------------------------------------------------------
Overall Portfolio              $15.7              *             *         $ 7.7
================================================================================

Non-Trading Daily Price Volatility: Incremental impact of non-trading positions
on Total Daily Price Volatility

--------------------------------------------------------------------------------
                             Average        Minimum       Maximum   December 31,
Risk Class                      1999           1999          1999          1999
--------------------------------------------------------------------------------
Interest Rate                  $ 6.9           $ --         $16.3         $ 0.1
Currency                         0.2             --           9.1            --
Equity                          13.9            5.0          20.2           5.9
Commodity                         --             --           0.4            --
Diversification                 (5.4)            --            --          (0.9)
--------------------------------------------------------------------------------
Overall Portfolio              $15.6              *             *         $ 5.1
================================================================================

*     The minimum (maximum) for each risk category occurred on different days so
      it is not meaningful to sum the risk class amounts presented above. For
      example, during 1999 the minimum Trading Daily Price Volatility was $7.6
      million and the maximum Trading Daily Price Volatility was $28.7 million.

Table 6 BTC Daily Price Volatility Statistics for 1998 (in millions)

Total Daily Price Volatility

-------------------------------------------------------------------------------
                            Average        Minimum       Maximum   December 31,
Risk Class                     1998           1998          1998           1998
-------------------------------------------------------------------------------
Interest Rate                $ 31.9          $19.2         $45.8         $ 25.0
Currency                       11.3            5.1          20.9            8.5
Equity                         28.5           16.2          36.7           33.9
Commodity                       1.3            0.6           3.4            1.2
Diversification               (21.7)            --            --          (21.3)
-------------------------------------------------------------------------------
Overall Portfolio            $ 51.3              *             *         $ 47.3
===============================================================================


                               Bankers Trust Corporation and its Subsidiaries 13
<PAGE>

--------------------------------------------------------------------------------

Trading Daily Price Volatility

--------------------------------------------------------------------------------
                             Average        Minimum       Maximum   December 31,
Risk Class                      1998           1998          1998           1998
--------------------------------------------------------------------------------
Interest Rate                  $19.3          $11.3         $31.4         $16.8
Currency                        11.1            5.0          20.7           7.2
Equity                          18.4            8.4          28.1          16.5
Commodity                        1.3            0.6           3.4           1.2
Diversification                (17.2)            --            --         (15.4)
--------------------------------------------------------------------------------
Overall Portfolio              $32.9              *             *         $26.3
================================================================================

Non-Trading Daily Price Volatility: Incremental impact of non-trading positions
on Total Daily Price Volatility

--------------------------------------------------------------------------------
                             Average        Minimum       Maximum   December 31,
Risk Class                      1998           1998          1998           1998
--------------------------------------------------------------------------------
Interest Rate                  $12.6          $ 1.5         $22.8         $ 8.2
Currency                         0.2             --           1.5           1.3
Equity                          10.1            5.1          17.5          17.4
Commodity                         --             --            --            --
Diversification                 (4.5)            --            --          (5.9)
--------------------------------------------------------------------------------
Overall Portfolio              $18.4              *             *         $21.0
================================================================================

*     The minimum (maximum) for each risk category occurred on different days so
      it is not meaningful to sum the risk class amounts presented above. For
      example, during 1998 the minimum Total Daily Price Volatility was $32.7
      million and the maximum Total Daily Price Volatility was $71.4 million.

      Tables 5 and 6 show that the Corporation's overall market risk as measured
by DPV declined in 1999 on an average and spot basis by 39 percent and 73
percent, respectively. The overall decline was driven by declines in all risk
classes. These reductions reflect the continuing effects of integrating the
Corporation into Deutsche Bank Group. The primary risks remaining at December
31, 1999 are interest rate risk and equity risk. The interest rate risk stems
primarily from the loan trading, loan syndication and loan securitization
businesses. The equity risk is primarily from private equity investments held by
the Corporation and from high yield distressed debt positions. Distressed debt
is classified as equity risk after implementation of Deutsche Bank models at the
beginning of the fourth quarter.

      Tables 5 and 6 show that the Corporation's DPV from Trading Assets also
declined sharply during this period, decreasing on an average and spot basis by
52 percent and 71 percent, respectively. The decline was evident across all risk
classes. These reductions reflect the continuing effects of integrating the
Corporation into Deutsche Bank Group.

Credit Risk Management

In conformity with Deutsche Bank policies, the Credit Risk Management
Department, headed by the Chief Credit Officer, is responsible for developing
credit policies, as well as for monitoring and managing overall credit risk. The
department evaluates the creditworthiness of each borrower/issuer/counterparty
and assigns a rating for each. Credit limits are established at the portfolio
level by borrower/issuer/counterparty and by other categories. A credit officer
is responsible for reviewing the entire credit risk portfolio of a
borrower/issuer/counterparty regardless of the nature of the exposure (e.g.,
loans, securities, and derivatives). Credit officers also monitor the usage of
credit risk by entity versus the limits at the product and business activity
level. The Credit Risk Management Department monitors country exposures and
industry, borrower/issuer/counterparty, product and regional risk concentrations
in order to evaluate the degree of diversification in the portfolio.

Derivatives

Derivatives are swaps, futures, forwards, options and other similar types of
contracts based on interest rates, foreign exchange rates and the prices of
equities and commodities (or related indices). Derivatives are generally either
privately-negotiated over-the-counter ("OTC") contracts or standard contracts
transacted through regulated exchanges. OTC contracts generally consist of
swaps, forwards and options. In the normal course of business, with the
agreement of the original customer, OTC derivatives may be terminated or
assigned to another customer. Exchange-traded derivatives include futures and
options. These capital markets products are described further in Note 24 of
Notes to Financial Statements. Derivatives may be used for either trading or
end-user purposes.


14 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

Trading Derivatives

The Corporation holds derivatives in connection with its activities as a dealer
acting as principal for particular transactions with clients, as a market maker
quoting bid and offer prices to provide liquidity and regular availability of
derivatives for clients and as a risk manager of its own trading positions
resulting from these client-driven transactions. The risks of derivative
positions are managed in accordance with Deutsche Bank's risk management
policies.

      As a result of the Acquisition, the Corporation's former derivatives
activities have been largely transferred to Deutsche Bank entities, and it is
anticipated that the existing positions at December 31, 1999 will be reduced
further over time.

      Substantially all of the Corporation's derivative positions at December
31, 1999 were trading-related, with gains and losses included in trading revenue
as they occur. Contracts with positive fair values are recorded as assets and
contracts with negative fair values are recorded as liabilities, after
application of qualifying master netting agreements. These positions may vary in
size from period to period, similar to the positions in cash instruments also
carried in the Corporation's trading account. Average trading assets and trading
liabilities related to derivatives during 1999 were $9.7 billion and $9.4
billion, respectively. The notional amounts, which are not recorded on the
balance sheet, of trading derivatives totaled $282 billion at December 31, 1999
and indicate the volume of activity but do not represent the Corporation's
exposure to market or credit risk.

End-User Derivatives

The Corporation utilizes end-user derivatives to manage exposures to interest
rate, and foreign currency risks associated with certain liabilities such as
interest-bearing deposits, short-term borrowings and long-term debt, as well as
loans and other assets. For example, the majority of the Corporation's end-user
derivatives involve certain instruments (principally interest rate and currency
swaps) used to transform fixed-rate-paying liabilities into variable-rate-paying
liabilities. See Note 24 and Note 26 of Notes to Financial Statements for
additional end-user information and for the fair value of end-user derivatives
and related financial instruments. The notional amounts, which are not recorded
on the balance sheet, of end-user derivatives totaled $41 billion at December
31, 1999 and indicate the volume of activity but do not represent the
Corporation's exposure to market or credit risk. End-user derivative contracts
represent approximately 13 percent of the aggregate notional amounts of all
derivatives outstanding at year end.

Market Risk

The market risk of derivatives arises principally from the potential for changes
in interest rates, foreign exchange rates, and equity and commodity prices and
is generally similar to the market risk of the cash instruments underlying the
contracts. The market risk to the Corporation is not measured by the price
sensitivity of the individual contracts, but by the net price sensitivity of the
relevant portfolio, including cash instruments. Exposures are generally managed
by taking risk-offsetting positions. Therefore, the Corporation believes it is
not meaningful to view the market risk of derivatives in isolation. Market
exposures arising from derivatives are monitored and are included in the Daily
Price Volatility amounts discussed in the preceding Risk Management section.

Liquidity Risk

In times of stress, sharp price movements or volatility shocks may reduce
liquidity in certain derivatives positions, as well as in cash instruments. The
liquidity risk of derivatives is substantially based on the liquidity of the
underlying cash instrument, which affects the ability of the Corporation to
alter the risk profile of its posi tions rapidly and at a reasonable cost. The
Corporation's mark-to-market practices for derivatives include adjustments in
consideration of liquidity risks, when appropriate. These practices are
consistent with those applied to the Corporation's trading positions in cash
instruments.

Derivatives-Related Credit Risk

Derivative transactions create dynamic credit exposure which changes as markets
move. The credit risk of derivatives arises from the potential for a customer to
default on its contractual obligations. Accordingly, credit risk related to
derivatives depends on the following: the current fair value of the contracts
with the customer; the potential credit exposure over time; the extent to which
legally enforceable netting arrangements allow the fair value of offsetting
contracts with that customer to be netted against each other; the extent to
which collateral held against the contracts reduces credit risk exposure; and
the likelihood of default by the customer.

      The Corporation monitors and manages the credit risk associated with
derivatives by applying a uniform credit process for all credit exposures. The
credit risk of derivatives is included in Deutsche Bank's credit risk management
systems. In order to reduce derivatives-related credit risk, the Corporation
enters into master netting agreements that provide for offsetting of all
contracts under each such agreement and obtains collateral where appropriate.
Such master netting agreements contemplate payment netting as well as the net
settlement of all covered contracts through a single payment in a single
currency with the same counterparty in the event that a default (including
insolvency) under the agreement occurs. Credit risk exposure is monitored on a
gross and a net basis and on a collateralized and an uncollateralized basis, as
appropriate.

      Current credit risk is calculated based on the current replacement cost of
outstanding positions with customers in OTC derivative financial instruments.
The gross replacement cost of a derivative portfolio with a customer is the
positive mark-to-market value of all transactions with that customer without the
effects of netting or collateral arrangements. The replacement costs, after
netting, of $4.8 billion more accurately portray the credit risk associated with
the Corporation's derivatives activities with external customers at December 31,
1999 than do the gross replacement costs.

      The Corporation applies netting based upon the criteria prescribed by
Financial Accounting Standards Board ("FASB") Interpretation No. 39 ("FIN 39"),
"Offsetting of Amounts Related to Certain Contracts," which provides that
offsetting is appropriate where the available evidence indicates that there are
reasonable assurances that the right of setoff contained in a master netting


                               Bankers Trust Corporation and its Subsidiaries 15
<PAGE>

--------------------------------------------------------------------------------

agreement governing derivatives contracts would be upheld after default,
including in the event of the customer's bankruptcy.

      Collateral also reduces credit risk. The Corporation generally accepts
collateral in the form of cash, U.S. Treasuries, and other approved securities
(generally, only liquid, marketable, publicly-traded securities are acceptable).

      The international bank regulatory standards for risk-based capital
consider the credit risk arising from derivatives in the assessment of capital
adequacy. These standards were issued under the Basle Capital Accord of July
1988 and adopted in 1989 by the U.S. bank regulators, including the Federal
Reserve Board. These standards use a formula-based assessment of customer credit
risk which, as amended at year-end 1995, reflect the credit-risk-reducing impact
of legally enforceable master netting agreements. These standards include a
calculation for estimating the potential future credit exposure caused by
potential price volatility (the "add-on"). At December 31, 1999, the
risk-weighted amounts (reflecting both current and potential future credit
exposure) that were calculated based on these international standards for
derivative financial instruments aggregated to $2.7 billion after application of
risk weightings.

Allowance for Credit Losses -- Loans

Overview

The Corporation's loan portfolio primarily consists of commercial lending
transactions to a diverse customer and geographic base. As such, the
Corporation's commercial loans tend to be individually large in size and are
non-homogeneous.

      As part of the Corporation's overall management and control process, the
Asset Quality Review Department is responsible for performing an ongoing
independent examination of the loan portfolio. The review program is designed to
identify at the earliest possible stage, counterparties who might be facing
financial difficulties. All significant counterparty relationships are reviewed
on a periodic basis, meaning that individual loans to a particular counterparty
are grouped together in evaluating the credit risk to such counterparty. Loans
under special supervision, such as cash basis and renegotiated loans, as well as
loans criticized by the Asset Quality Review Department under regulatory
guidelines (i.e., those loans classified as Special Mention, Substandard and
Doubtful) are also reviewed on a periodic basis. In addition, all levels of
management are required to bring to the attention of the Asset Quality Review
Department any credit risk where an additional review of the counterparty's
financial position is believed to be warranted. The Asset Quality Review
Department reports at least quarterly on the portfolio to the Audit and
Fiduciary Committee of the Board of Directors.

      In addition to the above procedures, Federal Reserve and State of New York
bank examiners (the "Bank regulatory authorities") perform periodic examinations
of the Corporation's credit risks, including the loan portfolio. The reports on
these examinations are also reviewed by the Asset Quality Review Department with
the Audit and Fiduciary Committee of the Board of Directors.

Determination of the Allowance for Credit Losses -- Loans

The allowance for credit losses--loans represents management's estimate of
probable loan losses that have occurred as of the date of the financial
statements.

      The Corporation undertook a comprehensive review in 1999 of its policies
and procedures related to the determination of the allowance for credit losses
to ensure that they are appropriate within the framework of generally accepted
accounting principles. The Corporation's policies and procedures were revised
and improved to ensure a systematic and adequately documented process for the
estimation of credit losses and related charge-offs.

      As a result of the aforementioned comprehensive review, the Corporation
recorded a $49 million reversal of the allowance for credit losses--loans in the
third quarter of 1999. For the year ended December 31, 1999, the Corporation
recorded a negative provision for credit losses--loans of $58 million.

      As noted above, all significant counterparty relationships and criticized
loans are reviewed periodically to allow management to determine the level of
the allowance for credit losses--loans. This process results in the following
three components of the allowance for credit losses--loans:

      Specific Allowance--The specific allowance component is the amount
required for impaired loans as calculated under SFAS 114, "Accounting by
Creditors for Impairment of a Loan." The specific component of the overall
allowance is determined through a loan-by-loan analysis of impaired loans that
considers expected future cash flows, the value of collateral and other factors
that may impact the borrowers' ability to pay. During 1999, the population of
loans that were individually evaluated for impairment under the SFAS 114
methodology was significantly broadened to include all loans rated Substandard
and Doubtful in the Corporation's internal class system.

      Country Risk--The country risk component is the amount provided for
exposures in countries experiencing financial stress, excluding those exposures
already identified and evaluated as impaired loans.

      The Deutsche Bank Group Board approves the countries that warrant risk
provisioning together with the percentages to be applied to the exposures in
these countries. The determination of countries to be included considers both
historical loss experience and market data such as economic, political and other
relevant factors affecting a country's financial condition. The list of
countries and associated percentages are periodically reviewed and changed as
necessary.

      Expected Loss--The expected loss component is an estimate of the remaining
probable losses inherent in the loan portfolio. This component is determined by
using a statistical model that utilizes a loan-type, risk-rated stratified
approach. Loss factors are derived by analyzing historical charge-offs and
recent economic events and applied to categories of loans by type and risk
rating.

      In calculating the loss factors, the Corporation utilizes the historical
loss experience of its portfolios and the actual amounts outstanding of the
portfolios segregated by borrower/counterparty ratings and several broad classes
of obligors. These ratings are internally determined mathematical expressions of
credit quality for individual obligors.


16 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

      Amounts deemed uncollectible are charged to the allowance. Subsequent
recoveries, if any, are credited to the allowance. Actual losses may vary from
current estimates and the amount of the actual credit loss provision may be
either greater than or less than actual net charge-offs. The related provision
for credit losses--loans, which is charged to income, is the amount necessary to
adjust the allowance to the level determined through the process described
above.

      The Bank regulatory authorities also assess and issue reports on the
quality of the portfolio and on the adequacy of the allowance and related
provision activity. Further, as part of their annual audit, the Corporation's
independent auditors review the process surrounding the determination of the
allowance for credit losses--loans and the level thereof. Their procedures
include discussions with management, a review of selected credit files and an
evaluation of the periodic reports issued by the Asset Quality Review Department
and regulatory examiners. In the opinion of management, the allowance for credit
losses--loans is fairly stated in accordance with generally accepted accounting
principles.

      The tables below provide the components of the allowance for credit
losses--loans by category. This breakdown of the allowance at each year end
reflects management's best estimate of probable credit losses and may not
necessarily be indicative of actual future charge-offs.

(in millions) December 31,                                                 1999*
--------------------------------------------------------------------------------
Domestic
 Specific
  Commercial and industrial                                                $200
  Real estate and real-estate related                                        12
--------------------------------------------------------------------------------
   Total specific                                                           212
   Expected loss                                                            127
--------------------------------------------------------------------------------
   Total domestic                                                           339
International
 Specific                                                                    56
 Country risk                                                                56
 Expected loss                                                               40
--------------------------------------------------------------------------------
   Total international                                                      152
--------------------------------------------------------------------------------
   Total allowance for credit losses--loans                                $491
================================================================================

*     Not comparable to prior years due to revised policies and procedures for
      determining the allowance for credit losses implemented in 1999.

(in millions) December 31,                      1998     1997     1996     1995*
--------------------------------------------------------------------------------
Domestic
  Commercial and industrial                     $162     $117     $153     $222
  Financial institutions                          20       38       20       40
  Real estate and real-estate related             84       89      107      100
--------------------------------------------------------------------------------
   Total domestic                                266      244      280      362
International                                    380      391      212      377
--------------------------------------------------------------------------------
   Total allocated**                             646      635      492      739
Unallocated portion                                6       64      281      253
--------------------------------------------------------------------------------
   Total allowance for credit losses--loans     $652     $699     $773     $992
================================================================================

*     Not comparable to other years presented in the table as 1995 includes
      allowance amounts related to derivatives and other credit-related
      commitments.

**    The specific allowance component was $61 million, $13 million, and $57
      million at December 31, 1998, 1997, and 1996, respectively. The general
      allowance component was $585 million, $622 million, and $435 million at
      December 31, 1998, 1997, and 1996, respectively.

      The allowance for credit losses--loans decreased to $491 million at
December 31, 1999, from $652 million at year-end 1998 and $699 million at
December 31, 1997. The decrease of $161 million in 1999 from 1998 was primarily
due to a negative provision for credit losses--loans of $58 million, reductions
in the allowance for credit losses--loans related to entities sold/transferred
and net charge-offs of $64 million. Such decrease reflects the significant
decline in the international component of the Corporation's loan portfolio
during 1999. The decrease of $47 million in 1998 from 1997 was primarily due to
$107 million of charge-offs, mainly related to Asian counterparties, partially
offset by recoveries and a $40 million provision. The decline in the 1998
allowance level is primarily attributable to the overall reduction in the
Corporation's risk profile in emerging market commercial and industrial loans.

      The following table presents an analysis of the changes in the
international component of the allowance for credit losses--loans:

<TABLE>
<CAPTION>
(in millions) Year Ended December 31,       1999        1998        1997        1996        1995(2)
------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>         <C>         <C>         <C>
Balance, beginning of year                 $ 380       $ 391       $ 212       $ 377       $ 416
------------------------------------------------------------------------------------------------
Net charge-offs
  Charge-offs                                 63          83          46          22         121
  Recoveries                                  12           6           7          26          24
------------------------------------------------------------------------------------------------
  Total net charge-offs (recoveries)
    to the allowance                          51          77          39          (4)         97
Allowance related to acquisition              --          --          17          --          --
Provision and increases (decreases)
  in the international portion
  of allowance                              (138)         66         258         (10)         58
Allowance related to BTAL and
  transferred entities(1)                    (39)         --          --          --          --
Reclassifications                             --          --         (57)       (159)         --
------------------------------------------------------------------------------------------------
Balance, end of year                       $ 152       $ 380       $ 391       $ 212       $ 377
================================================================================================
</TABLE>

(1)   Reflects the allowance for credit losses--loans of certain legal entities
      transferred to Deutsche Bank on the date of transfer and the allowance for
      credit losses--loans of BTAL on the date of sale.

(2)   Not comparable to other years presented in the table as 1995 includes
      allowance amounts related to derivatives and other credit-related
      commitments.


                               Bankers Trust Corporation and its Subsidiaries 17
<PAGE>
--------------------------------------------------------------------------------

Table 7 Analysis of the Allowances for Credit Losses

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
($ in millions) Year Ended December 31,                     1999        1998      1997        1996        1995
--------------------------------------------------------------------------------------------------------------
<S>                                                      <C>         <C>       <C>         <C>         <C>
Loans
Allowance, beginning of year                             $  652      $  699    $  773      $  992      $1,252
--------------------------------------------------------------------------------------------------------------
Charge-offs
  Domestic
   Commercial and industrial                                 28          24        19          46         177
   Real estate
     Construction                                            --          --        11           3          10
     Mortgage                                                --          --         2          18          22
  International                                              63          83        46          22         121
--------------------------------------------------------------------------------------------------------------
Total charge-offs                                            91         107        78          89         330
--------------------------------------------------------------------------------------------------------------
Recoveries
  Domestic
   Commercial and industrial                                 13           5        23          32          11
   Real estate
     Construction                                            --           1         1          --          --
     Mortgage                                                 2           8        13           7           4
  International                                              12           6         7          26          24
--------------------------------------------------------------------------------------------------------------
Total recoveries                                             27          20        44          65          39
--------------------------------------------------------------------------------------------------------------
Total net charge-offs(1)                                     64          87        34          24         291
Allowance related to acquisition                             --          --        17          --          --
Provision for credit losses                                 (58)         40        --           5          31
Allowance related to BTAL and transferred entities*         (39)         --        --          --          --
Reclassification                                             --          --       (57)       (200)         --
--------------------------------------------------------------------------------------------------------------
Allowance, end of year                                   $  491      $  652    $  699      $  773      $  992
=============================================================================================================

Percentage of total net charge-offs to average loans
  for the year                                             0.30%       0.39%     0.19%       0.18%       2.47%
=============================================================================================================
(1) Components:
   Secured by real estate                                  $ (8)       $(13)     $  5        $ 14        $ 23
   Real estate related                                       (4)          8        (2)          3           2
   Other                                                     76          92        31           7         266
--------------------------------------------------------------------------------------------------------------
     Total                                                 $ 64        $ 87      $ 34        $ 24        $291
=============================================================================================================
Other Liabilities
Allowance, beginning of year                               $ 18        $ 13      $ 10        $ --         $--
Provision for credit losses                                   6           5        --          --          --
Reclassification                                             --          --         3          10          --
--------------------------------------------------------------------------------------------------------------
Allowance, end of year                                     $ 24        $ 18      $ 13        $ 10         $--
=============================================================================================================
</TABLE>

*     Reflects the allowance for credit losses of certain legal entities
      transferred to Deutsche Bank on the date of transfer and the allowance for
      credit losses of BTAL on the date of sale.


18 Bankers Trust Corporation and its Subsidiaries
<PAGE>

Loans

The following table summarizes the composition of the loan portfolio at the end
of each of the last five years:

<TABLE>
<CAPTION>
(in millions) December 31,              1999         1998         1997         1996         1995
------------------------------------------------------------------------------------------------
<S>                                  <C>          <C>          <C>          <C>          <C>
Domestic
  Commercial and industrial          $ 8,125      $ 6,448      $ 4,244      $ 3,422      $ 2,520
  Financial institutions               2,788        2,441        2,148        1,631        1,778
  Real estate                          1,471        1,449        2,196        1,695        1,430
  Other                                4,028        3,558        1,427        1,436        1,490
------------------------------------------------------------------------------------------------
   Total domestic                     16,412       13,896       10,015        8,184        7,218
------------------------------------------------------------------------------------------------
International
  Governments and
    official institutions                120          190          252          237          227
  Banks and other
    financial institutions               690        3,599        3,175        3,482        1,543
  Commercial and industrial            1,765        3,931        4,931        2,759        1,934
  Real estate                             31          166          195          130          178
  Other                                1,167        1,813        1,402        1,290        1,701
------------------------------------------------------------------------------------------------
   Total international                 3,773        9,699        9,955        7,898        5,583
------------------------------------------------------------------------------------------------
Gross loans                           20,185       23,595       19,970       16,082       12,801
Less: unearned income                    223          310          165          202          120
------------------------------------------------------------------------------------------------
   Total loans                       $19,962      $23,285      $19,805      $15,880      $12,681
================================================================================================
</TABLE>

      Total loans decreased to $20.0 billion at December 31, 1999 down from
$23.3 billion at year-end 1998 and up from $19.8 billion at December 31, 1997.
The 1999 decrease of $3.3 billion primarily related to the international loan
portfolio which decreased $5.9 billion, or 61 percent, to $3.8 billion at
December 31, 1999, offset by an increase in the domestic component of the loan
portfolio.

      Following the Acquisition, the Corporation has actively sought to increase
its lending exposure in the domestic market. The domestic lending portfolio
balance at December 31, 1999 was $16.4 billion, an 18% increase over 1998. This
increase primarily relates to commercial and industrial loans and reflects the
continuing high levels of merger and acquisition related activity in the
domestic market.

      The significant decline in the international loan portfolio reflects the
de-emphasizing of lending in certain emerging markets and the consolidation of
business conducted by both Deutsche Bank and Bankers Trust into Deutsche Bank
legal entities. Such decline also reflects the sale of BTAL as well as the
transfer of BTI during 1999.

      During 1998, the loan portfolio increased $3.5 billion to $23.3 billion at
December 31, 1998 from $19.8 billion at December 31, 1997. The 1998 increase
related to the domestic loan portfolio which increased $3.9 billion, or 39
percent, to $13.9 billion at December 31, 1998, offset by a slight decline in
the international component of the loan portfolio. Within the domestic loan
portfolio, commercial and industrial loans increased $2.2 billion in 1998,
reflecting increased business volumes as well as higher targeted hold amounts in
relation to loan syndication activity. Domestic loans secured by real estate
declined $0.7 billion, or 34 percent, in 1998 reflecting a decrease in the
volume of direct real estate loans held. Other domestic loans increased to $3.6
billion at December 31, 1998 from $1.4 billion at December 31, 1997. The
increase was primarily related to an increase in real estate related loans,
including loans to real estate investment trusts ("REIT"), as well as to
increases in Private Client loans and in overnight overdrafts arising as a
matter of course from depository business.

      The international component of the loan portfolio totaled $9.7 billion at
December 31, 1998 down slightly from $10.0 billion at December 31, 1997. Within
the international portfolio, commercial and industrial loans decreased 20
percent in 1998 to $3.9 billion, reflecting the Corporation's efforts to reduce
exposure in this segment of the portfolio, particularly in the emerging markets,
following a significant increase in commercial and industrial lending beginning
in 1995. This reduction in exposure was primarily effected through pay-downs of
outstanding loans. The decline in commercial and industrial lending was offset
by increases in loans to banks and other financial institutions and in other
international loans which includes margin related lending. At year-end 1998, the
Corporation's inter national loan portfolio was primarily concentrated in
Australia/ New Zealand, Western Europe, Latin America, and non-Japan Asia.


                               Bankers Trust Corporation and its Subsidiaries 19
<PAGE>

Nonperforming Assets

Table 8 Nonperforming Assets

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
($ in millions) December 31,                                         1999       1998       1997       1996       1995
---------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>        <C>        <C>        <C>        <C>
Cash basis loans
  Domestic
   Commercial and industrial                                         $495       $ 91       $ 49       $117       $263
   Secured by real estate                                              67         86         92        233        297
   Financial institutions                                              11         15         --         --         10
---------------------------------------------------------------------------------------------------------------------
    Total domestic                                                    573        192        141        350        570
---------------------------------------------------------------------------------------------------------------------
  International
   Commercial and industrial                                          132        135         65         57        106
   Secured by real estate                                              10         18         25         39         65
   Financial institutions                                              --          2         --          4          3
   Foreign governments                                                 --         23         --         --         --
   Lease financings                                                     1          7          2          2         --
   Other                                                               21         15          7         --         --
---------------------------------------------------------------------------------------------------------------------
    Total international                                               164        200         99        102        174
---------------------------------------------------------------------------------------------------------------------
Total cash basis loans                                               $737       $392       $240       $452       $744
=====================================================================================================================
Ratio of cash basis loans to total gross loans                        3.7%       1.7%       1.2%       2.8%       5.9%
=====================================================================================================================
Ratio of allowance for credit losses--loans to cash basis loans        67%       166%       291%       171%       133%
=====================================================================================================================
Renegotiated loans
  Secured by real estate                                             $ --       $ 25       $ 25       $ 37       $ 88
  Other                                                                11          1         --         --         12
---------------------------------------------------------------------------------------------------------------------
Total renegotiated loans                                             $ 11       $ 26       $ 25       $ 37       $100
=====================================================================================================================
Other real estate                                                    $ 88       $ 87       $194       $213       $259
=====================================================================================================================
Other nonperforming assets                                           $  8       $  8       $  4       $ 10       $ 66
=====================================================================================================================
Loans 90 days or more past due and still accruing interest(1)        $ --       $ --       $ --       $ --       $ 26
=====================================================================================================================
</TABLE>

(1)   Represents loans 90 days or more past due with respect to interest or
      principal. These loans were considered to be well secured and were in the
      process of collection.


20 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

      The Corporation's credit review procedures are designed to promote early
identification of counterparty, country, and industry exposures that require a
higher-than normal degree of scrutiny. Each quarter a review is performed by the
Asset Quality Review Department and senior credit management of cash basis loans
and criticized assets (i.e. those assets internally classified as Special
Mention, Substandard and Doubtful). Individual borrower balances are evaluated
and a charge-off of amounts deemed uncollectible is recommended. Factors
considered in this evaluation include the credit quality of the counterparties,
the amount and duration of the exposure, collateral values, the Corporation's
ability to reduce exposure in situations of deteriorating creditworthiness and
loss probabilities. Once a charge-off is taken, the remaining portion, if any,
is immediately placed on a cash basis. If the collection or liquidation in full
is questionable, the asset is classified as doubtful. In addition, it is
generally the Corporation's policy that loans be immediately placed on a cash
basis when they become 90 days past due with respect to interest or principal.

      The Corporation's total cash basis loans amounted to $737 million at
December 31, 1999, an increase of $345 million, or 88 percent, from 1998, which
had increased $152 million, or 63 percent, from 1997. The 1999 increase was
significantly impacted by a rise in domestic commercial and industrial loans.
Such increase related to certain borrowers in the manufacturing, health care and
gaming sectors.

      Cash basis loans increased $345 million during 1999, primarily due to a
rise in impaired loans from $418 million at December 31, 1998 to $889 million at
December 31, 1999. The specific allowance related to impaired loans amounted to
$268 million at December 31, 1999, an increase of $207 million from 1998 which
had increased $48 million from 1997.

      An analysis of the changes in the Corporation's total cash basis loans
follows:

<TABLE>
<CAPTION>
(in millions)
Year Ended December 31,                 1999        1998        1997        1996        1995
--------------------------------------------------------------------------------------------
<S>                                    <C>         <C>         <C>         <C>         <C>
Balance, beginning of year             $ 392       $ 240       $ 452       $ 744       $ 996
Net transfers to cash basis loans        622         365         111          96         314
Net paydowns                             (91)        (64)       (146)       (241)       (221)
Charge-offs                              (91)       (107)        (78)        (87)       (330)
Net transfers from (to) other
  real estate                            (13)         (2)        (16)        (14)         13
Loan sales                               (19)        (24)        (47)        (38)         (1)
Transfers to Deutsche Bank*              (15)         --          --          --          --
Other                                    (48)        (16)        (36)         (8)        (27)
--------------------------------------------------------------------------------------------
Balance, end of year                   $ 737       $ 392       $ 240       $ 452       $ 744
============================================================================================
</TABLE>

*     Reflects the cash basis loans of certain legal entities transferred to
      Deutsche Bank on date of the transfer.

Cross-Border Outstandings

The Corporation's cross-border outstandings reflect certain additional economic
and political risks beyond those associated with its domestic outstandings, such
as risks arising from funds transfer restrictions and balance-of-payments
issues, as well as risks arising from operating in different legal and
regulatory jurisdictions.

      The following table presents the Corporation's cross-border outstandings
at December 31, 1999, 1998 and 1997 for each foreign country where such
outstandings exceeded .75 percent of the Corporation's total assets. The
outstanding balances are presented in accordance with the reporting guidelines
adopted by the Federal Financial Institutions Examination Council (FFIEC) as of
March 1997.


                               Bankers Trust Corporation and its Subsidiaries 21
<PAGE>

--------------------------------------------------------------------------------

Table 9 Cross-Border Outstandings

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
                                                                    Governments      Banks and
                                                           % of             and           Other       Commercial
                                             Total        Total        Official       Financial              and
($ in millions)                       Outstandings       Assets    Institutions    Institutions       Industrial           Other
--------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>             <C>          <C>             <C>              <C>             <C>
At December 31, 1999
  Germany                                  $ 4,993         7.32%        $     1         $ 4,471          $   521         $    --
  International(1)                             516         0.76             516              --               --              --
  Cayman Islands                               315         0.46              --             271               44              --
  All other cross-border outstandings        4,067         5.97             128           1,885            1,976              78
--------------------------------------------------------------------------------------------------------------------------------
  Total cross-border outstandings          $ 9,891        14.51%        $   645         $ 6,627          $ 2,541         $    78
================================================================================================================================
At December 31, 1998
  France                                   $ 5,600         4.21%        $   373         $ 4,639          $   588         $    --
  Germany                                    3,651         2.74             162           3,226              263              --
  United Kingdom                             3,093         2.32              47           2,218              824               4
  Japan(2)                                   2,705         2.03           1,122           1,184              399              --
  Australia                                  2,097         1.58             408           1,199              490              --
  Canada                                     1,898         1.43             649             915              331               3
  Switzerland                                1,839         1.38              --           1,754               85              --
  Netherlands                                1,778         1.34             106           1,448              224              --
  Italy                                      1,705         1.28             293             917              495              --
  All other cross-border outstandings       12,364         9.29           1,738           6,212            4,412               2
--------------------------------------------------------------------------------------------------------------------------------
  Total cross-border outstandings          $36,730        27.60%        $ 4,898         $23,712          $ 8,111         $     9
================================================================================================================================
At December 31, 1997
  Japan(2)                                 $ 7,018         5.01%        $   935         $ 4,996          $ 1,087         $    --
  France                                     3,898         2.78               2           3,558              338              --
  Spain                                      3,520         2.51             302           2,940              278              --
  Australia                                  3,003         2.14             507           2,072              424              --
  Germany                                    2,771         1.98             281           2,295              195              --
  United Kingdom                             2,428         1.73               8           2,309              108               3
  Canada                                     2,258         1.61             579           1,251              426               2
  Switzerland                                1,919         1.37              --           1,123              796              --
  Brazil(3)                                  1,917         1.37             809             588              520              --
  Republic of Korea(4)                       1,583         1.13             186             929              468              --
  Netherlands                                1,322         0.94              --             879              443              --
  Indonesia(3)                               1,247         0.89              24             440              783              --
  Italy                                      1,110         0.79             427             432              251              --
  All other cross-border outstandings       12,572         8.97           3,208           6,408            2,905              51
--------------------------------------------------------------------------------------------------------------------------------
  Total cross-border outstandings          $46,566        33.22%        $ 7,268         $30,220          $ 9,022         $    56
================================================================================================================================
</TABLE>

(1)   The Corporation's cross-border outstandings with International primarily
      consisted of revaluation gains from the marking to market of interest rate
      and foreign exchange contracts held for trading purposes with multilateral
      development banks.

(2)   The Corporation's cross-border outstandings with Japan primarily consisted
      of trading account assets and securities available for sale which are
      carried at fair value. For 1997, the cross-border outstandings primarily
      consisted of interest-bearing deposits with banks and trading account
      assets carried at fair value.

(3)   The Corporation's cross-border outstandings with Brazil and Indonesia
      primarily consisted of trading account assets carried at fair value.

(4)   The Corporation's cross-border outstandings with the Republic of Korea
      primarily consisted of trading account assets carried at fair value and
      acceptances outstanding.


22 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

      The cross-border claims outstandings in Table 9 were compiled based upon
category and domicile of ultimate risk and are comprised of balances with banks,
trading account assets (including net revaluation gains on foreign exchange and
derivative products), securities available for sale, securities purchased under
resale agreements, loans, accrued interest receivable and acceptances
outstanding.

      Governments and official institutions comprises foreign governments and
their agencies; state, provincial and local governments and their agencies; and
central banks. Banks and other financial institutions is comprised of commercial
and savings banks and other similar institutions accepting short-term deposits,
including government-owned banks which do not function as central banks, and
nonbank credit and financial companies.

      The amounts outstanding for each country listed in Table 9 exclude local
country claims. Local country claims, as defined by the FFIEC's March 1997
reporting guidelines, include claims on residents of the same country in which
the booking office is domiciled. Such claims are generally funded with
borrowings that represent liabilities of that office or are hedged with foreign
exchange and derivative products.

      At December 31, 1999, total cross-border commitments to borrowers or
counterparties domiciled in the countries presented in Table 9 were: Germany
$107 million and Cayman Islands $28 million.

      The amendments to the FFIEC's cross-border reporting guidelines as adopted
in March 1997 included the addition of net revaluation gains on foreign exchange
and derivative products to the definition of claims outstanding, and the
elimination of the currency denomination criteria when segregating local from
cross-border country claims.

      There were no cash basis loans outstanding for the countries presented in
Table 9 as of December 31, 1999. The following table details the cash basis
loans of the outstandings at December 31, 1998 and 1997 for those countries
presented in Table 9.

                                                                      Cash Basis
(in millions)                                                              Loans
--------------------------------------------------------------------------------
At December 31, 1998
  United Kingdom                                                             $36
  Canada                                                                      16
  Italy                                                                        3
--------------------------------------------------------------------------------
Total                                                                        $55
================================================================================
At December 31, 1997
  Indonesia                                                                  $10
  Spain                                                                        2
--------------------------------------------------------------------------------
Total                                                                        $12
================================================================================

      There were no cross-border renegotiated loans for the years ended December
31, 1999, 1998 and 1997.

Accounting Developments

In June 1998, the FASB issued SFAS 133, "Accounting for Derivative Instruments
and Hedging Activities." This statement establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires companies
to recognize all derivatives on the balance sheet as assets or liabilities
measured at fair value. SFAS 137 deferred the effective date of SFAS 133 until
January 1, 2001 for calendar year companies. Depending on the underlying risk
management strategy, the accounting for these products under the new standard
could affect reported earnings and balance sheet accounts. The Corporation
continues to evaluate the potential impact of the new standard as plans for
implementation proceed.

Recent Developments

On March 9, 2000, Deutsche Bank AG and Dresdner Bank AG announced their
intention to merge. Dresdner Bank AG is one of the largest banks in Germany.

      The merger, which the parties expect to complete by January 2001, is
subject to the approval of the shareholders of Deutsche Bank AG and Dresdner
Bank AG and of various authorities worldwide. The impact on the Corporation's
Consolidated Financial Statements is not known at this time.


                               Bankers Trust Corporation and its Subsidiaries 23
<PAGE>

Consolidated Statement of Income (in millions, except per share data)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
Year Ended December 31,                                                          1999              1998          1997
---------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>               <C>           <C>
Net Interest Revenue
  Interest revenue                                                            $ 4,419           $ 8,291       $ 7,285
  Interest expense                                                              3,612             6,919         5,926
---------------------------------------------------------------------------------------------------------------------
Net Interest Revenue                                                              807             1,372         1,359
Provision for credit losses--loans                                                (58)               40            --
---------------------------------------------------------------------------------------------------------------------
Net Interest Revenue after Provision for Credit Losses -- Loans                   865             1,332         1,359
---------------------------------------------------------------------------------------------------------------------
Noninterest Revenue
  Trading                                                                          42              (184)        1,055
  Fiduciary and funds management                                                1,017             1,108         1,059
  Corporate finance fees                                                          542             1,255         1,113
  Other fees and commissions                                                      538               817           606
  Net revenue from equity investments                                             356               302           224
  Securities available for sale gains (losses)                                    (89)              (56)          158
  Insurance premiums                                                               86               256           287
  Other                                                                         1,008               259           359
---------------------------------------------------------------------------------------------------------------------
Total noninterest revenue                                                       3,500             3,757         4,861
---------------------------------------------------------------------------------------------------------------------
Noninterest Expenses
  Salaries and commissions                                                      1,039             1,421         1,273
  Incentive compensation and employee benefits                                  1,088             1,530         1,726
  Change in control related incentive compensation and employee benefits        1,101                --            --
  Agency and other professional service fees                                      430               501           391
  Communication and data services                                                 206               252           231
  Occupancy, net                                                                  198               218           181
  Furniture and equipment                                                         221               252           224
  Travel and entertainment                                                        114               171           142
  Provision for policyholder benefits                                             114               322           333
  Other                                                                           636               499           423
  Restructuring and other related activities                                      633                --            57
---------------------------------------------------------------------------------------------------------------------
Total noninterest expenses                                                      5,780             5,166         4,981
---------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes                                              (1,415)              (77)        1,239
Income taxes (benefit)                                                            188                (4)          373
---------------------------------------------------------------------------------------------------------------------
Net Income (Loss)                                                             $(1,603)          $   (73)      $   866
=====================================================================================================================

Net Income (Loss) Applicable to Common Stock**                                      *           $  (105)      $   817
=====================================================================================================================

Earnings (Loss) per Common Share:
  Basic                                                                             *           $ (1.05)      $  8.15
=====================================================================================================================

  Diluted                                                                           *           $ (1.05)      $  7.66
=====================================================================================================================

Cash dividends declared per common share                                      $  1.00*          $  4.00       $  4.00
=====================================================================================================================
</TABLE>

*     Amounts for net income applicable to common stock and earnings (loss) per
      common share are not meaningful due to Deutsche Bank AG acquiring all of
      the outstanding shares of common stock of Bankers Trust Corporation on
      June 4, 1999. Cash dividends declared per common share of $1.00 represent
      dividends declared prior to June 4, 1999.

**    Amounts shown are used to calculate basic earnings per common share for
      the year ended December 31, 1998 and 1997.

The accompanying notes are an integral part of the financial statements.


24 Bankers Trust Corporation and its Subsidiaries
<PAGE>

Consolidated Statement of Comprehensive Income (in millions)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
Year Ended December 31,                                                1999          1998        1997
-----------------------------------------------------------------------------------------------------
<S>                                                                 <C>           <C>         <C>
Net Income (Loss)                                                   $(1,603)      $   (73)    $   866
-----------------------------------------------------------------------------------------------------
Other comprehensive income (loss), net of tax:
  Foreign currency translation adjustments:
    Unrealized foreign currency translation gains (losses)
      arising during the year, net of tax*                              (17)          (36)          2
    Reclassification adjustment for realized foreign currency
      translation (gains) losses, net of tax**                          369            --          --
  Unrealized gains (losses) on securities:
    Unrealized holding gains (losses) arising during the year,
      net of tax***                                                      (1)          (90)          6
    Reclassification adjustment for realized (gains) losses,
      net of tax****                                                     82            57         (95)
-----------------------------------------------------------------------------------------------------
Total other comprehensive income (loss)                                 433           (69)        (87)
-----------------------------------------------------------------------------------------------------
Comprehensive Income (Loss)                                         $(1,170)      $  (142)    $   779
=====================================================================================================
</TABLE>

*     Amounts are net of an income tax (benefit) expense of $(13) million, $(10)
      million and $76 million for the years ended December 31, 1999, 1998 and
      1997, respectively.

**    Realized foreign currency translation losses result from the transfer of
      certain foreign subsidiaries to Deutsche Bank and the sale of BTAL in
      1999. Amount is net of an income tax benefit of $54 million for the year
      ended December 31, 1999.

***   Amounts are net of an income tax (benefit) expense of $21 million, $(12)
      million and $6 million for the years ended December 31, 1999, 1998 and
      1997, respectively.

****  Amounts are net of an income tax (benefit) expense of $(7) million, $1
      million and $63 million for the years ended December 31, 1999, 1998 and
      1997 respectively.

The accompanying notes are an integral part of the financial statements.


                               Bankers Trust Corporation and its Subsidiaries 25
<PAGE>

Consolidated Balance Sheet ($ in millions, except par value)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
December 31,                                                          1999           1998
-----------------------------------------------------------------------------------------
<S>                                                              <C>            <C>
Assets
Cash and due from banks                                          $   3,212      $   2,837
Interest-bearing deposits with banks                                 4,693          2,382
Federal funds sold                                                   2,472          2,484
Securities purchased under resale agreements                         6,764         17,053
Securities borrowed                                                     --         14,709
Trading assets:
  Government securities                                              2,296          5,731
  Corporate debt securities                                          1,367          5,519
  Equity securities                                                  7,144          5,810
  Swaps, options and other derivatives                               4,807         17,376
  Other trading assets                                               3,403         11,734
-----------------------------------------------------------------------------------------
Total trading assets                                                19,017         46,170
Securities available for sale                                        3,252         12,748
Loans, net                                                          19,471         22,633
Customer receivables                                                   306          1,524
Due from customers on acceptances                                      262            232
Accounts receivable and accrued interest                             2,307          3,815
Other assets                                                         6,401          6,528
-----------------------------------------------------------------------------------------
Total                                                            $  68,157      $ 133,115
=========================================================================================

Liabilities
Noninterest-bearing deposits
  Domestic offices                                               $   2,690      $   2,784
  Foreign offices                                                    2,299          1,689
Interest-bearing deposits
  Domestic offices                                                  12,118         18,259
  Foreign offices                                                    6,362         14,602
-----------------------------------------------------------------------------------------
Total deposits                                                      23,469         37,334
Trading liabilities:
  Securities sold, not yet purchased
    Government securities                                               53          4,149
    Equity securities                                                   21          6,458
    Other trading liabilities                                            9            789
  Swaps, options and other derivatives                               5,183         15,857
-----------------------------------------------------------------------------------------
Total trading liabilities                                            5,266         27,253
Securities loaned and securities sold
under repurchase agreements                                             56         17,420
Other short-term borrowings                                         11,540         16,313
Acceptances outstanding                                                266            232
Accounts payable and accrued expenses                                3,314          5,210
Other liabilities                                                    3,462          5,234
Long-term debt not included in risk-based capital                   12,582         14,890
Long-term debt included in risk-based capital                        2,424          3,113
Mandatorily redeemable capital securities
  of subsidiary trusts holding solely junior
  subordinated deferrable interest debentures
  included in risk-based capital                                     1,428          1,420
-----------------------------------------------------------------------------------------
Total liabilities                                                   63,807        128,419
=========================================================================================
Commitments and contingent liabilities (Notes 7, 24 and 30)

Stockholders' Equity
Preferred stock                                                        376            394
Common stock, $1 par value
  Authorized: 1999, 200 shares;
              1998, 300,000,000 shares
  Issued: 1999, 1 share;
          1998, 105,380,175 shares                                      --            105
Capital surplus                                                      2,318          1,613
Retained earnings                                                    1,686          3,504
Common stock in treasury, at cost: 1999, 0 shares;
                                   1998, 9,666,055 shares               --         (1,056)
Other stockholders' equity                                              --            599
Accumulated other comprehensive income:
  Net unrealized gains (losses) on securities
    available for sale, net of taxes                                    16            (65)
  Foreign currency translation, net of taxes                           (46)          (398)
-----------------------------------------------------------------------------------------
Total stockholders' equity                                           4,350          4,696
-----------------------------------------------------------------------------------------
Total                                                            $  68,157      $ 133,115
=========================================================================================
</TABLE>

The accompanying notes are an integral part of the financial statements.


26 Bankers Trust Corporation and its Subsidiaries
<PAGE>

Consolidated Statement of Changes in Stockholders' Equity (in millions)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
Year Ended December 31,                                           1999          1998               1997
-------------------------------------------------------------------------------------------------------
<S>                                                            <C>           <C>                <C>
Preferred Stock
Balance, beginning of year                                     $   394       $   658            $   810
Preferred stock issued                                              --            --                  1
Preferred stock repurchased                                        (18)          (16)                (8)
Preferred stock redeemed                                            --          (248)              (145)
-------------------------------------------------------------------------------------------------------
Balance, end of year                                               376           394                658
-------------------------------------------------------------------------------------------------------
Common Stock
Balance, beginning of year                                         105           105                104
Retirement of common stock                                        (105)           --                 --
Issuance of common stock*                                           --            --                  1
-------------------------------------------------------------------------------------------------------
Balance, end of year                                                --           105                105
-------------------------------------------------------------------------------------------------------
Capital Surplus
Balance, beginning of year                                       1,613         1,563              1,437
Issuance of common stock                                            --            --                 59
Repurchase and retirement of common stock                           --            --                 (6)
Common stock distributed under employee benefit plans                4            50                 73
Capital transactions related to change in control                 (699)           --                 --
Capital contribution from parent                                 1,400            --                 --
-------------------------------------------------------------------------------------------------------
Balance, end of year                                             2,318         1,613              1,563
-------------------------------------------------------------------------------------------------------
Retained Earnings
Balance, beginning of year                                       3,504         4,202              3,988
Net income (loss)                                               (1,603)          (73)               866
Cash dividends declared
  Preferred stock                                                  (22)          (35)               (50)
  Common stock                                                     (98)         (384)              (366)
Treasury stock distributed under employee benefit plans            (95)         (206)              (236)
-------------------------------------------------------------------------------------------------------
Balance, end of year                                             1,686         3,504              4,202
-------------------------------------------------------------------------------------------------------
Common Stock in Treasury, at cost
Balance, beginning of year                                      (1,056)         (889)              (372)
Purchases of stock                                                 (71)         (618)            (1,038)
Treasury stock distributed under employee benefit plans            322           451                521
Capital transactions related to change in control                  805            --                 --
-------------------------------------------------------------------------------------------------------
Balance, end of year                                                --        (1,056)              (889)
-------------------------------------------------------------------------------------------------------
Common Stock Issuable -- Stock Awards
Balance, beginning of year                                         817           901                526
Deferred stock awards granted, net                                 557            54                401
Deferred stock distributed                                        (216)         (138)               (26)
Capital transactions related to change in control               (1,158)           --                 --
-------------------------------------------------------------------------------------------------------
Balance, end of year                                                --           817                901
-------------------------------------------------------------------------------------------------------
Deferred Compensation -- Stock Awards
Balance, beginning of year                                        (218)         (438)              (308)
Deferred stock awards granted, net                                (556)          (55)              (404)
Amortization of deferred compensation, net                         749           275                274
Other                                                               25            --                 --
-------------------------------------------------------------------------------------------------------
Balance, end of year                                                --          (218)              (438)
-------------------------------------------------------------------------------------------------------
Cumulative Translation Adjustments
Balance, beginning of year                                        (398)         (362)              (364)
Translation adjustments/entity transfers and sales                 393           (46)                78
Income taxes                                                       (41)           10                (76)
-------------------------------------------------------------------------------------------------------
Balance, end of year                                               (46)         (398)              (362)
-------------------------------------------------------------------------------------------------------
Securities Valuation Allowance
Balance, beginning of year                                         (65)          (32)                57
Change in unrealized net gains (losses), after applicable
income taxes and minority interest                                  81           (33)               (89)
-------------------------------------------------------------------------------------------------------
Balance, end of year                                                16           (65)               (32)
-------------------------------------------------------------------------------------------------------
Total stockholders' equity, end of year                        $ 4,350       $ 4,696            $ 5,708
=======================================================================================================
</TABLE>

*1999: 1 share, $1 par value.

The accompanying notes are an integral part of the financial statements.


                               Bankers Trust Corporation and its Subsidiaries 27
<PAGE>

Consolidated Statement of Cash Flows (in millions)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31,                                                                     1999           1998           1997
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>            <C>            <C>
Cash Flows from Operating Activities
Net income (loss)                                                                       $ (1,603)      $    (73)      $    866
Adjustments to reconcile net income (loss) to net cash
  provided by (used in) operating activities:
  Provision for credit losses--loans                                                         (58)            40             --
  Provision for credit losses--other                                                           6              5             --
  Provision for policyholder benefits                                                        114            322            333
  Restructuring and other related activities                                                 633             --             57
  Deferred income taxes, net                                                                (395)          (276)          (272)
  Depreciation and other amortization and accretion                                          879            379            415
  Other, net                                                                                 153             13            (61)
  Gain on sale of Bankers Trust Australia Limited                                           (779)            --             --
------------------------------------------------------------------------------------------------------------------------------
    Earnings adjusted for noncash charges, credits and other items                        (1,050)           410          1,338
Net change in:
  Trading assets                                                                         (14,995)         8,554         (8,825)
  Trading liabilities                                                                     20,602            245          4,525
  Receivables and payables from securities transactions                                      875           (528)           477
  Customer receivables                                                                    (1,110)            23            (18)
  Other operating assets and liabilities, net                                                 42         (1,724)           (79)
Securities available for sale losses (gains)                                                  89             56           (158)
------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities                                        4,453          7,036         (2,740)
------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Investing Activities
Net change in:
  Interest-bearing deposits with banks                                                    (3,764)         1,886         (2,171)
  Federal funds sold                                                                         (39)        (1,102)           302
  Securities purchased under resale agreements                                            (4,268)         2,110         (1,197)
  Securities borrowed                                                                     (8,716)         2,042            254
  Loans                                                                                       89         (1,906)        (4,637)
Securities available for sale:
  Purchases                                                                               (6,190)       (22,041)        (6,430)
  Maturities and other redemptions                                                         1,024          2,794          3,845
  Sales and other transfers to affiliates                                                  8,412         15,102          1,511
Acquisitions of premises and equipment                                                      (102)          (447)          (237)
Other, net                                                                                  (501)         1,183            911
Proceeds from transfer of legal entities                                                   3,062             --             --
Proceeds from sale of Bankers Trust Australia Limited                                      1,313             --             --
------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                     (9,680)          (379)        (7,849)
------------------------------------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Net change in:
  Deposits                                                                                (6,284)        (5,474)        12,651
  Securities loaned and securities sold under repurchase agreements                       12,465           (277)        (5,399)
  Other short-term borrowings                                                             (1,886)        (2,879)         1,125
Issuances of long-term debt*                                                               4,966          7,746          9,645
Repayments of long-term debt**                                                            (4,791)        (3,973)        (5,188)
Issuances of common stock                                                                     --             --             48
Repurchase and retirement of common stock                                                     --             --             (6)
Issuance of preferred stock of subsidiary                                                     --            304             --
Redemptions of preferred stock of subsidiary                                                  --           (304)          (250)
Redemptions and repurchases of preferred stock                                               (18)          (264)          (152)
Purchases of treasury stock                                                                  (71)          (618)        (1,038)
Cash dividends paid                                                                         (216)          (421)          (397)
Capital contribution from parent                                                           1,400             --             --
Other, net                                                                                    18            128            248
------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities                                        5,583         (6,032)        11,287
------------------------------------------------------------------------------------------------------------------------------
Net effect of exchange rate changes on cash                                                   19             24            (78)
------------------------------------------------------------------------------------------------------------------------------
Net Increase in Cash and Due from Banks                                                      375            649            620
Cash and due from banks, beginning of year                                                 2,837          2,188          1,568
------------------------------------------------------------------------------------------------------------------------------
Cash and due from banks, end of year                                                    $  3,212       $  2,837       $  2,188
==============================================================================================================================
Interest paid                                                                           $  4,730       $  6,868       $  5,515
==============================================================================================================================
Income taxes paid, net                                                                  $     39       $     76       $    260
==============================================================================================================================
Noncash investing activities:
  Transfer of legal entity in exchange for shares in affiliate                          $    852       $     --       $     --
  Conversions of loans to other real estate and assets acquired in credit workouts            21              6             64
  Exchanges of Chilean government bonds for annuity contracts                                  9              9             57
------------------------------------------------------------------------------------------------------------------------------
Total noncash investing activities                                                      $    882       $     15       $    121
==============================================================================================================================
Noncash financing activity: conversion of debt to equity                                $     --       $     15       $     63
==============================================================================================================================
</TABLE>

*     Includes $739 million for the year ended December 31, 1997 related to
      mandatorily redeemable capital securities of subsidiary trusts holding
      solely junior subordinated deferrable interest debentures included in
      risk-based capital.

**    Includes $57 million for the year ended December 31, 1998, related to
      mandatorily redeemable capital securities of subsidiary trusts holding
      solely junior subordinated deferrable interest debentures included in
      risk-based capital.

The accompanying notes are an integral part of the financial statements.


28 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------
                         NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Note 1 -- Acquisition by Deutsche Bank AG

Change of Control

On June 4, 1999, the change-of-control ("COC") date, pursuant to an agreement
dated as of November 30, 1998, between Deutsche Bank AG ("Deutsche Bank") and
Bankers Trust Corporation ("Bankers Trust"), Deutsche Bank, through its U.S.
holding corporation, Taunus Corporation ("Taunus"), acquired all of the
outstanding shares of common stock of Bankers Trust from its shareholders at a
price of $93.00 per share (the "Acquisition"). Deutsche Bank accounted for the
Acquisition as a purchase. No purchase accounting adjustments were pushed down
to Bankers Trust.

      On June 4, 1999, all Bankers Trust employee deferred compensation amounts
vested in full. Employer contributions to individual employee retirement
accounts also vested. In addition, all bonus- eligible employees on the date of
COC became entitled to a pro rata bonus which was paid in cash on July 2, 1999
for that portion of the 1999 performance year ending on the COC date. The pro
rata bonus was based on the greater of an employee's total (cash and deferred
stock) 1998 performance bonus or the employee's average total 1996, 1997 and
1998 performance bonus awards.

      In conjunction with the Acquisition, during the second quarter of 1999
Bankers Trust Corporation together with its subsidiaries (the "Corporation" or
the "Firm") incurred pre-tax charges of approximately $1.1 billion in
COC-related costs, principally due to the aforementioned vesting of all employee
deferred compensation amounts and related pro-rata bonus awards as well as a
pre-tax restructuring charge of $459 million. Also, in connection with the
Acquisition, the Corporation incurred other charges reflecting a change in
management's intention regarding certain assets as a result of integrating the
Corporation into Deutsche Bank, a change in certain pricing methodologies in
order to conform to those of Deutsche Bank, and the transfer of certain
available for sale securities to Deutsche Bank related entities based on changes
in management responsibility. These one-time charges are included in Deutsche
Bank's consolidated financial statements as of June 30, 1999 as part of the
goodwill associated with the Acquisition. The goodwill is being amortized over
15 years.

Disposition of Assets

On June 5, 1999, Bankers Trust transferred its wholly-owned subsidiary BT Alex.
Brown Incorporated ("BTAB") and substantially all of its interest in Bankers
Trust International PLC ("BTI") to Deutsche Bank Securities Inc. ("DBSI") and
Deutsche Holdings (BTI) Ltd., respectively, which are wholly-owned subsidiaries
of Deutsche Bank. The transfer of BTAB to DBSI took the form of an exchange of
stock pursuant to which BTAB became a wholly-owned subsidiary of DBSI and
Bankers Trust received shares of DB U.S. Financial Markets Holding Corporation
("DBUSH"), the parent of DBSI. In the third quarter of 1999, the Corporation
sold its shares of DBUSH to Taunus for approximately $800 million. The transfer
of substantially all of Bankers Trust's interest in BTI was for cash in the
amount of approximately $1.7 billion.

      On August 31, 1999, the Corporation completed the sale of Bankers Trust
Australia Limited ("BTAL"), a wholly-owned subsidiary, to the Principal
Financial Group for a price of approximately $1.3 billion. Prior to the sale,
BTAL remitted to the Corporation a dividend for accumulated retained earnings
that included proceeds from BTAL's sale of its investment banking division to
Macquarie Bank. The Corporation also received cash for the assumption of certain
BTAL long-term debt. In addition, according to the sale agreement, the
Corporation is entitled to receive an additional payment. The amount and timing
of such payment is not known at this time. When such payment is received, it
will be reflected in the Corporation's results of operations. The Corporation
recognized a pre-tax gain of approximately $779 million in the third quarter of
1999 on the sale of BTAL.

      In connection with the Acquisition and in addition to the foregoing
transactions, the Corporation has and will continue to transfer certain entities
and financial assets and liabilities to Deutsche Bank related entities. The
consideration received and to be received for such transactions was and will be
fair market value of the financial assets and liabilities at and on the date of
transfer. In addition, the Corporation's money market related funding
activities, which are short-term in nature, are expected to be significantly
reduced over time.

      Because of the significant business and net financial asset transfers to
Deutsche Bank entities, the aforementioned other charges reflecting changes in
management intent and responsibility and the sale of BTAL, the Corporation's
historical financial statements are not fully comparable for all periods
presented.

      Prior to the Acquisition, the Corporation was a global financial
institution, providing products and services to its clients worldwide.
Subsequent to the Acquisition and associated reorganization activities, the
Corporation and its subsidiaries conduct their business primarily in the
Americas, focusing their activities principally in the asset management,
lending, institutional services, private equity, and private banking businesses.

Capital Contribution

In conjunction with the Acquisition and to strengthen the Corporation's capital
base, Deutsche Bank made a capital contri bution of $1.4 billion in the second
quarter of 1999.

Note 2 -- Significant Accounting Policies

On September 1, 1997, Alex. Brown Incorporated ("Alex. Brown") was merged into a
wholly-owned subsidiary of Bankers Trust Corporation. The merger was accounted
for as a pooling-of-interests, and accordingly, the information included in the
financial statements presents the combined results of Alex. Brown and the
Corporation prior to the transfer of BTAB to DBSI on June 5, 1999.

      The accounting policies of the Corporation conform with generally accepted
accounting principles and prevailing industry practices. 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 balance sheet date, and the reported amounts of revenue


                               Bankers Trust Corporation and its Subsidiaries 29
<PAGE>

--------------------------------------------------------------------------------

and expenses during the reporting period. Actual results could differ from
management's estimates. The following is a description of the significant
accounting policies of the Corporation.

Principles of Consolidation

The consolidated financial statements of the Corporation include Bankers Trust,
Bankers Trust Company and its subsidiaries ("BTCo") and all other significant,
majority-owned subsidiaries, after elimination of material intercompany
transactions and accounts. Investments in other companies over which the Corpo
ration has significant influence are accounted for using the equity method of
accounting. These investments are reported in other assets and the related
equity income or loss, as well as disposition gains and losses, is included in
noninterest revenue. Investments within designated Small Business Investment
Company subsidiaries are carried at fair value. Changes in fair value are
included in noninterest revenue.

Foreign Currency Translation

Assets and liabilities denominated in currencies other than an entity's
functional currency are translated into its functional currency using the
current exchange rates and the resulting translation gains and losses are
reported in noninterest revenue. Assets and liabilities of entities whose
functional currency is not the U.S. dollar are translated into U.S. dollars
using the current exchange rates and the translation gains and losses, net of
tax effects, are reported in other comprehensive income.

Resale and Repurchase Agreements

Resale and repurchase agreements are generally treated as collateralized
financings and are carried at the amount of cash disbursed or received. The
Corporation offsets resale and repurchase agreements which meet the applicable
netting criteria.

      Generally, the party disbursing the cash takes possession of the
securities serving as collateral for the financing. Securities purchased under
resale agreements consist primarily of U.S. government and federal agency
securities and OECD country sovereign bonds.

      The Corporation monitors the fair value of the securities received or
sent. For securities purchased under resale agreements, the Corporation requests
additional securities or the return of a portion of the cash disbursed when
appropriate in response to a decline in the market value of the securities
received. Similarly, the return of excess securities or additional cash is
requested when appropriate in response to an increase in the market value of
securities sold under repurchase agreements.

Trading Securities; Securities Available for Sale

The Corporation designates debt and marketable equity securities as either held
for trading purposes or available for sale at the date of acquisition.

      Debt and marketable equity securities, loans and money market instruments
that are classified as trading assets, as well as short trading positions which
are classified as trading liabilities, are carried at their fair values and
related gains and losses are included in trading revenue.

      Securities available for sale are carried at fair value with the changes
in fair value, net of applicable deferred income taxes, reported in other
comprehensive income. Realized gains and losses, as well as the amortization of
premiums and accretion of discounts, are recorded in earnings. The specific
identification method is used to determine the cost of securities sold.

      Fair value is generally based on quoted market prices, price quotes from
brokers or dealers or discounted expected cash flows.

Derivatives

The Corporation enters into swaps, futures contracts, forward commitments,
options and other similar types of contracts and commitments based on interest
and foreign exchange rates, and equity and commodity prices, for trading
purposes. Such positions are carried at their fair values as either trading
assets or trading liabilities. Fair values for derivatives are based on quoted
market prices or pricing models which take into account current market and
contractual prices of the underlying instruments as well as time value and yield
curve or volatility factors underlying the positions. Fair values also take into
account expected market risks, administrative costs and credit considerations.
Unrealized gains and losses are reported as assets and liabilities,
respectively, and those arising from contracts covered by qualifying master
netting agreements are reported on a net basis. Gains and losses resulting from
trading positions are included in trading revenue.

      In addition to its trading activities, the Corporation, as an end user,
enters into various types of derivative transactions (principally interest rate
and currency swaps) to manage the interest rate, currency and other market risks
arising from a number of categories of its assets and liabilities. Hedge
accounting, as described below, is applied to derivatives used to manage such
risks. To qualify for hedge accounting, the derivative contract must be
designated as a hedge at its inception and must remain effective as a hedge
throughout its term. A derivative is considered to be an effective hedge when
its terms correlate highly with the hedged item.

      The accounting for end-user derivatives follows that of the underlying
item being hedged. Thus, net interest revenue is accrued or amortized for
interest rate contracts, and in addition, hedges of securities available for
sale are carried at fair value with changes in fair value due to market price
changes reported in other comprehensive income. Foreign exchange rate contracts
used to hedge foreign-currency-denominated assets and liabilities are translated
at spot rates with the resulting gains and losses reported in noninterest
revenue or other comprehensive income, and the discounts or premiums on these
contracts are accrued to net interest revenue. Translation gains and losses, as
well as the accretion of discount and amortization of premium on foreign
exchange rate contracts used to hedge net investments in foreign entities are
reported in other comprehensive income. The book values of end-user derivatives
are reported in other assets or other liabilities.

      Realized gains and losses on terminated hedges where the underlying hedged
items are still outstanding are deferred and amortized to net interest
revenue over the remaining term of the hedge or hedged item, whichever is
shorter. Any time the underlying item is also terminated, the remaining deferred
amounts related to the


30 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

terminated hedge are recognized and reported consistently with the realized gain
or loss on the underlying item.

      Derivatives that do not qualify for hedge accounting are considered to be
trading positions and are accounted for as such.

Loans, Other Real Estate and Other Nonperforming Assets

Loans generally are stated at their outstanding unpaid principal balances net of
any deferred fees on originated loans, and net of any unamortized premiums or
discounts on purchased loans. Interest revenue is accrued on the unpaid
principal balance. Net deferred fees and premiums or discounts are recognized as
an adjustment of the yield (interest revenue) over the lives of the related
loans.

      Loans are accounted for on a cash basis once principal or interest
payments are past due 90 days or earlier if considered appropriate by
management. In addition, all loans classified as doubtful and all partially
charged-off loans are accounted for on a cash basis even if the borrower is
still making required payments. Any accrued but unpaid interest previously
recorded on cash basis loans is reversed against current period interest
revenue. Cash receipts of interest on cash basis loans are recorded as either
revenue or a reduction of principal according to management's judgment as to the
collectibility of principal.

      Renegotiated loans are those which have been renegotiated to an effective
interest rate lower than the then-current market rate because of a deterioration
in the financial position of the borrower. Interest on such loans is accrued at
the renegotiated rate.

      Assets acquired in credit work-outs, including real estate, are recorded
at the lower of fair value less costs to sell or the recorded investment in the
related loan and are classified as other assets. Any excess of the recorded
investment in the loan over the fair value of the asset acquired is charged
against the allowance for credit losses-loans.

Allowance For Credit Losses

The allowance for credit losses represents management's estimate of probable
losses that have occurred as of the date of the financial statements. The
allowance for credit losses-loans is reported as a reduction of loans and the
allowance for credit losses for other credit-related items is reported in other
liabilities.

      The Corporation recently undertook a comprehensive review of its policies
and procedures related to the determination of the allowance for credit losses
to ensure that they are appropriate within the framework of generally accepted
accounting principles. Policies and procedures were revised and improved to
ensure a systematic and adequately documented process for the estimation of
credit losses and related charge-offs.

      To allow management to determine the appropriate level of the allowance
for credit losses-loans, all significant counterparty relationships are reviewed
periodically, as are loans under special supervision, such as criticized, cash
basis and renegotiated loans. This management process results in three
components of the overall allowance for credit losses-loans: a specific
allowance component, a country risk component and an expected loss component.
The specific allowance component is the amount required for impaired loans as
calculated under SFAS 114, "Accounting by Creditors for Impairment of a Loan."
The country risk component is the amount provided for exposures in countries
experiencing financial stress, excluding those exposures already identified and
evaluated as impaired loans. The expected loss component is an estimate of the
remaining probable losses inherent in the loan portfolio. This component is
determined by using a statistical model that utilizes a loan-type, risk-rated
stratified approach. Loss factors are derived by analyzing historical
charge-offs and recent economic events and applied to categories of loans by
type and risk rating.

      Amounts deemed uncollectible are charged to the allowance. Subsequent
recoveries, if any, are credited to the allowance. Actual losses may vary from
current estimates and the amount of the actual credit loss provision may be
either greater than or less than actual net charge-offs. The related provision
for credit losses--loans, which is charged to income, is the amount necessary to
adjust the allowance to the level determined through the process described
above.

Customer Receivables

Customer receivables include amounts due on uncompleted transactions and margin
balances. Securities owned by customers and held as collateral for these
receivables are not reflected in the financial statements.

Premises and Equipment

Premises and equipment owned are stated at cost less accumulated depreciation
and amortization. Depreciation is computed using the straight-line method over
the estimated useful lives of the assets. Leasehold improvements are amortized
on a straight-line basis over the terms of the leases or the estimated useful
lives of the improvements, whichever are shorter. Maintenance and repairs are
charged to expense and improvements are capitalized. Gains and losses on
dispositions are reflected in earnings.

      Leased properties meeting certain criteria are capitalized and amortized
using the straight-line method over the terms of the leases.

Income Taxes

The Corporation recognizes the current and deferred tax consequences of all
transactions that have been recognized in the financial statements using the
provisions of enacted tax laws. Deferred tax assets and liabilities are
recognized for the estimated future tax effects of temporary differences. The
amount of deferred tax assets is reduced, if necessary, to the amount that,
based on available evidence, will more likely than not be realized.

Stock-Based Compensation

Prior to the Acquisition, the Corporation accounted for its stock option awards
under the intrinsic value-based method of accounting prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." The
Corporation


                               Bankers Trust Corporation and its Subsidiaries 31
<PAGE>

--------------------------------------------------------------------------------

made pro forma disclosures of net income and earnings per share as if the fair
value-based method of accounting had been applied under SFAS 123, "Accounting
for Stock-Based Compensation." On the COC date, all outstanding stock options
were settled in cash equaling a price of $93.00 per option less the exercise
price.

      Prior to the Acquisition, the Corporation also recorded its obli gations
under outstanding deferred stock awards in stockholders' equity as common stock
issuable-stock awards. The related deferred compensation was also included in
stockholders' equity. These classifications were based upon the Corporation's
intent to settle these awards with its common stock. On the COC date, all
outstanding awards were settled in cash.

Statement of Cash Flows

For purposes of the consolidated statement of cash flows, the Corporation's cash
and cash equivalents are cash and due from banks. Net cash flows from
instruments such as futures, forwards, options and swaps used to hedge assets or
liabilities are classified as cash flows from operating activities.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current
presentation.

Note 3 -- Trading Assets and Trading Liabilities

The components of these accounts, which are carried at fair value, were as
follows:

(in millions) December 31,                                     1999         1998
--------------------------------------------------------------------------------
Trading assets
U.S. government and agency securities                       $ 2,101      $   686
Obligations of U.S. states and political subdivisions            81          246
Foreign government securities                                   114        4,799
Corporate debt securities                                     1,367        5,519
Equity securities                                             7,144        5,810
Swaps, options and other derivative contracts(1)              4,807       17,376
Bankers acceptances and certificates of deposit                  53        2,844
Other                                                         3,350        8,890
--------------------------------------------------------------------------------
Total trading assets                                        $19,017      $46,170
================================================================================
Trading liabilities
Securities sold, not yet purchased
  U.S. government and agency securities                     $    53      $ 1,504
  Foreign government securities                                  --        2,616
  Equity securities                                              21        6,458
  Other                                                           9          818
Swaps, options and other derivative contracts(1)              5,183       15,857
--------------------------------------------------------------------------------
Total trading liabilities                                   $ 5,266      $27,253
================================================================================

(1)   Comprised of fair values of interest rate instruments, foreign exchange
      rate instruments, and equity and commodity instruments, reduced by the
      effects of master netting agreements, in accordance with Financial
      Accounting Standards Board ("FASB") Interpretation No. 39 ("FIN 39"),
      "Offsetting of Amounts Related to Certain Contracts."

Note 4 -- Securities Available for Sale

The fair value, amortized cost, and gross unrealized holding gains and losses
for the Corporation's securities available for sale follow:

<TABLE>
<CAPTION>
(in millions) December 31,                             1999                                            1998
------------------------------------------------------------------------------------------------------------------------------
                                                       Gross                                           Gross
                                                 Unrealized Holding                              Unrealized Holding
                                          Fair   ------------------   Amortized        Fair      ------------------  Amortized
                                         Value    Gains    (Losses)        Cost       Value      Gains     (Losses)       Cost
<S>                                    <C>      <C>        <C>          <C>         <C>        <C>         <C>         <C>
------------------------------------------------------------------------------------------------------------------------------
Debt securities
  U.S. government and agencies         $   348  $    --    $    (9)     $   357     $ 1,431    $    14     $   (11)    $ 1,428
  States of the U.S. and
    political subdivisions                  16       --         --           16       1,770         91         (72)      1,751
  Asset-backed                               5       --         --            5         107          8          (1)        100
  Certificates of deposit                   --       --         --           --         108          1          --         107
  Foreign governments                      480       --         --          480       3,182         23        (114)      3,273
  Corporate debt                         2,226       --         (1)       2,227       2,431          6         (81)      2,506
  Mortgage-backed                           94       --         (2)          96       3,125         52         (69)      3,142
Equity securities                           83       45         (8)          46         594         69         (71)        596
------------------------------------------------------------------------------------------------------------------------------
Total securities available for sale    $ 3,252  $    45    $   (20)     $ 3,227     $12,748    $   264     $  (419)    $12,903
==============================================================================================================================

<CAPTION>
(in millions) December 31,                                   1997
--------------------------------------------------------------------------------------
                                                             Gross
                                                       Unrealized Holding
                                            Fair       ------------------    Amortized
                                           Value       Gains     (Losses)         Cost
<S>                                      <C>         <C>         <C>           <C>
--------------------------------------------------------------------------------------
Debt securities
  U.S. government and agencies           $   525     $     3     $    --       $   522
  States of the U.S. and
    political subdivisions                 1,392          78         (50)        1,364
  Asset-backed                               156          --          --           156
  Certificates of deposit                    135          --          --           135
  Foreign governments                      2,122           5         (46)        2,163
  Corporate debt                           3,135           1         (61)        3,195
  Mortgage-backed                            113          --          --           113
Equity securities                            503          41         (18)          480
--------------------------------------------------------------------------------------
Total securities available for sale      $ 8,081     $   128     $  (175)      $ 8,128
======================================================================================
</TABLE>

      There were no securities of any individual issuer included in securities
available for sale that exceeded 10 percent of the Corporation's total
stockholders' equity at December 31, 1999.

      The components of securities available for sale gains (losses) as reported
in the consolidated statement of income follow:

(in millions) Year Ended December 31,                 1999      1998       1997
--------------------------------------------------------------------------------
Debt securities--gross realized gains                $  81     $ 163      $  53
Debt securities--gross realized losses                (234)     (248)       (18)
Equity securities--net realized gains                   64        29        123
--------------------------------------------------------------------------------
Total securities available for sale gains (losses)   $ (89)    $ (56)     $ 158
================================================================================


32 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

The following table shows the fair value, remaining maturities, approximate
weighted-average yields (based on amortized cost) and total amortized cost by
maturity distribution of the debt components of the Corporation's securities
available for sale at December 31, 1999.

                              Maturity Distribution

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                             After One            After Five
                                       Within                But Within           But Within              After
                                      One Year               Five Years           Ten Years             Ten Years
----------------------------------------------------------------------------------------------------------------------
($ in millions)                   Amount     Yield       Amount     Yield     Amount      Yield     Amount     Yield
----------------------------------------------------------------------------------------------------------------------
<S>                                 <C>       <C>          <C>       <C>      <C>          <C>      <C>
U.S. government and agencies        $ 42      8.49%        $126      5.09%    $  180       3.64%    $   --         --%
States of the U.S. and political
  subdivisions                         8      6.28           --        --          6        5.5          2       37.6
Asset-backed securities               --        --            5      2.45         --         --         --         --
Certificates of deposit               --        --           --        --         --         --         --         --
Foreign government securities        182     14.88          298      3.24         --         --         --         --
Corporate debt securities            181      3.65          901      7.31      1,120       5.16         24      14.88
Mortgage-backed securities            --        --           --        --         72       5.86         12      12.76
----------------------------------------------------------------------------------------------------------------------
Total fair value                    $413                 $1,330               $1,378                $   38
========================================                 ======               ======                ======

Total amortized cost                $416                 $1,336               $1,380                $   39
========================================                 ======               ======                ======

<CAPTION>
--------------------------------------------------------------------------

                                       Mortgage-
                                        Backed               Total
--------------------------------------------------------------------------
($ in millions)                   Amount      Yield     Amount     Yield
--------------------------------------------------------------------------
<S>                               <C>                   <C>          <C>
U.S. government and agencies      $   --         --%    $  348       4.70%
States of the U.S. and political
  subdivisions                        --         --         16      10.18
Asset-backed securities               --         --          5       2.45
Certificates of deposit               --         --         --         --
Foreign government securities         --         --        480       7.64
Corporate debt securities             --         --      2,226       6.02
Mortgage-backed securities            10      16.90         94       7.94
--------------------------------------------------------------------------
Total fair value                  $   10                $3,169
================================  ======                ======
Total amortized cost              $   10                $3,181
================================  ======                ======
</TABLE>

Note 5 -- Loans

The following table summarizes the composition of loans at the end of each of
the last five years:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
($ in millions) December 31,             1999                1998               1997                 1996                1995
---------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>            <C>   <C>           <C>  <C>          <C>     <C>          <C>     <C>          <C>
Domestic
  Commercial and industrial     $ 8,125        40%   $ 6,448       27%  $ 4,244      21%     $ 3,422      21%     $ 2,520      20%
  Financial institutions          2,788        14      2,441       10     2,148      11        1,631      10        1,778      14
  Real estate
     Construction                   128         1        134        1       108       1          133       1          154       1
     Mortgage                     1,343         6      1,315        6     2,088      10        1,562      10        1,276      10
  Other                           4,028        20      3,558       15     1,427       7        1,436       9        1,490      11
---------------------------------------------------------------------------------------------------------------------------------
Total domestic                   16,412        81     13,896       59    10,015      50        8,184      51        7,218      56
---------------------------------------------------------------------------------------------------------------------------------
International
  Governments and official
     institutions                   120         1        190        1       252       1          237       1          227       2
  Banks and other financial
    institutions                    690         3      3,599       15     3,175      16        3,482      22        1,543      13
  Commercial and industrial       1,765         9      3,931       17     4,931      25        2,759      17        1,934      15
  Real estate
     Construction                    --        --         71       --        --      --           --      --            2      --
     Mortgage                        31        --         95       --       195       1          130       1          176       1
  Other                           1,167         6      1,813        8     1,402       7        1,290       8        1,701      13
---------------------------------------------------------------------------------------------------------------------------------
Total international               3,773        19      9,699       41     9,955      50        7,898      49        5,583      44
---------------------------------------------------------------------------------------------------------------------------------
Gross loans                      20,185       100%    23,595      100%   19,970     100%      16,082     100%      12,801     100%
                                              ===                 ===               ===                  ===                  ===
Less: unearned income               223                  310                165                  202                  120
---------------------------------------              -------            -------              -------              -------
Total loans                     $19,962              $23,285            $19,805              $15,880              $12,681
=======================================              =======            =======              =======              =======
</TABLE>

      On a global basis, the commercial and industrial category and the "other"
category included no single industry group with aggregate borrowings from the
Corporation in excess of 10 percent of the total loan portfolio at December 31,
1999.


                               Bankers Trust Corporation and its Subsidiaries 33
<PAGE>

--------------------------------------------------------------------------------

      Certain contractual maturity information for the Corporation's loans at
December 31, 1999, excluding 1-4 family mortgages, installment loans and lease
financing is summarized below. Actual maturities may differ from contractual
maturities since borrowers may have the right to prepay obligations with or
without prepayment penalties.

                                                 Remaining Maturity
--------------------------------------------------------------------------------
                                     Within    After One       After
                                        One   But Within        Five
(in millions)                          Year   Five Years       Years       Total
--------------------------------------------------------------------------------
Domestic
  Commercial and industrial          $  955       $4,707      $2,463     $ 8,125
  Financial institutions              2,411          347          30       2,788
  Real estate
    Construction                         58           70          --         128
    Mortgage                            238          836          63       1,137
  Other                               1,961          883          87       2,931
--------------------------------------------------------------------------------
Total domestic                        5,623        6,843       2,643      15,109
International                         2,231          699          68       2,998
--------------------------------------------------------------------------------
Total                                $7,854       $7,542      $2,711     $18,107
================================================================================
Loans due after one year
  With predetermined interest rates               $  249      $  351
====================================================================
  With floating or adjustable
    interest rates                                $7,293      $2,360
====================================================================

Cash Basis Loans and Renegotiated Loans

The Corporation's cash basis loans and renegotiated loans are summarized as
follows:

(in millions) December 31,                                 1999             1998
--------------------------------------------------------------------------------
Cash basis loans
  Domestic                                                 $573             $192
  International                                             164              200
--------------------------------------------------------------------------------
Total cash basis loans                                     $737             $392
================================================================================
Renegotiated loans
  Domestic                                                 $ 11             $ 25
  International                                              --                1
--------------------------------------------------------------------------------
Total renegotiated loans                                   $ 11             $ 26
================================================================================

      At December 31, 1999 and 1998, borrowers on a cash basis or renegotiated
status had undrawn commitments with the Corporation of $38 million and $39
million, respectively. Such 1999 amounts, if drawn, will be classified as cash
basis or renegotiated.

      The following table sets forth the approximate effect on interest revenue
of cash basis loans and renegotiated loans. This disclosure reflects the
interest on loans that were carried on the balance sheet and classified as
either cash basis or renegotiated at December 31 of each year. The rates used in
determining the gross amount of interest that would have been recorded at the
original rate were not necessarily representative of current market rates.

(in millions) Year Ended December 31,                 1999       1998       1997
--------------------------------------------------------------------------------
Domestic loans
  Gross amount of interest that would
     have been recorded at original rate               $27        $16        $16
  Less, interest, net of reversals,
     recognized in interest revenue                     18          8          3
--------------------------------------------------------------------------------
Reduction of interest revenue                            9          8         13
--------------------------------------------------------------------------------
International loans
  Gross amount of interest that would
     have been recorded at original rate                 3         16          5
  Less, interest, net of reversals,
     recognized in interest revenue                      1         11         --
--------------------------------------------------------------------------------
Reduction of interest revenue                            2          5          5
--------------------------------------------------------------------------------
Total reduction of interest revenue                    $11        $13        $18
================================================================================

      At December 31, 1999 and 1998, the recorded investment in loans that was
considered to be impaired under SFAS 114 was $889 million and $418 million,
respectively. Included in these amounts were $718 million and $295 million of
loans that required a valuation allowance of $268 million and $61 million at
those same dates, respectively. The average recorded investment in impaired
loans during the years ended December 31, 1999 and December 31, 1998 was
approximately $502 million and $295 million, respectively. For the years ended
December 31, 1999, 1998 and 1997, the Corporation recognized interest income on
impaired loans of $12 million, $19 million and $3 million, respectively.


34 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

Note 6 -- Allowances for Credit Losses

An analysis of the changes in the Corporation's allowances for credit losses
follows:

<TABLE>
<CAPTION>
(in millions) Year Ended December 31,              1999         1998        1997
--------------------------------------------------------------------------------
<S>                                               <C>          <C>         <C>
Loans
Balance, beginning of year                        $ 652        $ 699       $ 773
Provision for credit losses                         (58)          40          --
Allowance related to BTAL and
  transferred entities*                             (39)          --          --
Reclassification                                     --           --         (57)
Allowance related to acquisition                     --           --          17
Net charge-offs
  Charge-offs                                        91          107          78
  Recoveries                                         27           20          44
--------------------------------------------------------------------------------
Total net charge-offs                                64           87          34
--------------------------------------------------------------------------------
Balance, end of year                              $ 491        $ 652       $ 699
================================================================================

Other liabilities
Balance, beginning of year                        $  18        $  13       $  10
Provision for credit losses                           6            5          --
Reclassification                                     --           --           3
--------------------------------------------------------------------------------
Balance, end of year                              $  24        $  18       $  13
================================================================================
</TABLE>

*     Reflects the allowance for credit losses of certain legal entities
      transferred to Deutsche Bank on the date of transfer and the allowance for
      credit losses--loans of BTAL on the date of sale.

Note 7 -- Premises and Equipment; Leases

An analysis of premises and equipment follows:

(in millions) December 31,                                    1999          1998
--------------------------------------------------------------------------------
Land                                                        $   71        $   85
Buildings                                                      265           338
Leasehold improvements                                         330           416
Furniture and equipment                                        816         1,389
Construction-in-progress                                        21            36
--------------------------------------------------------------------------------
Total                                                        1,503         2,264
Less accumulated depreciation and amortization                 842         1,131
--------------------------------------------------------------------------------
Net book value                                              $  661        $1,133
================================================================================

      The Corporation is a lessee under lease agreements covering real property
and equipment. The future minimum lease payments required under the
Corporation's noncancelable operating leases at the end of 1999 were as follows:

(in millions) Year Ended December 31,
--------------------------------------------------------------------------------
2000                                                                        $ 47
2001                                                                          46
2002                                                                          40
2003                                                                          37
2004                                                                          36
2005 and later                                                               222
--------------------------------------------------------------------------------
Total minimum lease payments                                                 428
Less minimum noncancelable sublease rentals                                    4
--------------------------------------------------------------------------------
Net minimum lease payments                                                  $424
================================================================================

      The following shows the net rental expense for all operating leases:

(in millions) Year Ended December 31,               1999        1998        1997
--------------------------------------------------------------------------------
Gross rental expense                                $124        $131        $107
Less sublease rental income                            6           4           3
--------------------------------------------------------------------------------
Net rental expense                                  $118        $127        $104
================================================================================

Note 8 -- Securities Loaned and Securities Sold Under Repurchase Agreements and
Other Short-term Borrowings

Short-term borrowings are borrowed funds generally with an original maturity of
one year or less. Debt instruments which contain a provision for early
redemption, exercisable at the option of the security holder, are classified on
the basis of the earliest possible redemption date.

      Securities loaned and securities sold under repurchase agreements and
federal funds purchased generally mature in one day; commercial paper generally
matures within 90 days.

      The details of these borrowings for the years 1999, 1998 and 1997 are
presented below:

($ in millions)                                  1999         1998         1997
--------------------------------------------------------------------------------
Securities loaned and securities sold
  under repurchase agreements
Balance at year end                           $    56      $17,420      $17,896
Average amount outstanding                      8,261       28,732       23,897
Maximum amount outstanding at
  any month end                                23,383       37,140       27,878
Average interest rate for the year               6.52%        6.60%        5.91%
Average interest rate on year-end balance        6.89%        5.06%        5.30%
Federal funds purchased
Balance at year end                           $ 5,270      $ 3,686      $ 3,260
Average amount outstanding                      3,226        3,840        4,097
Maximum amount outstanding at
  any month end                                 5,968       10,036        8,444
Average interest rate for the year               4.48%        4.83%        5.03%
Average interest rate on year-end balance        3.45%        3.90%        5.42%
Commercial paper
Balance at year end                               $--      $ 5,110      $ 8,733
Average amount outstanding                      3,615        9,708        8,881
Maximum amount outstanding at
  any month end                                 9,458       15,293        9,584
Average interest rate for the year               6.98%        5.98%        5.79%
Average interest rate on year-end balance          --%        5.41%        5.94%
Other
Balance at year end                           $ 6,270      $ 7,517      $ 7,584
Average amount outstanding                      6,044        8,049        7,190
Maximum amount outstanding at
  any month end                                 8,854        8,885        8,249
Average interest rate for the year               6.61%        6.97%        6.58%
Average interest rate on year-end balance        9.74%        5.54%        5.93%
================================================================================


                               Bankers Trust Corporation and its Subsidiaries 35
<PAGE>

--------------------------------------------------------------------------------

Note 9 -- Long-Term Debt

In accordance with the Federal Reserve Board's Capital Adequacy Guidelines,
long-term debt included in risk-based capital must meet specific criteria.
Generally, qualifying debt must be unsecured, subordinated and have an original
weighted-average maturity of at least five years. Additionally, the outstanding
amount of long-term debt included in risk-based capital is reduced as these
issues approach maturity. That is, one-fifth of the original issue is amortized
each year during the last five years before maturity.

      Long-term debt included in risk-based capital and other long-term debt are
summarized as follows, based on the contractual terms of each issue:

Long-term debt included in risk-based capital

                                                          Dec. 31,    Dec. 31,
                        Subordinated      Subordinated        1999        1998
(in millions)             Fixed Rate     Floating Rate       Total       Total
--------------------------------------------------------------------------------
Bankers Trust
Due in 1999                  $    --           $    --     $    --     $   147
Due in 2000                      197                --         197         196
Due in 2001                      214                --         214         212
Due in 2002                      617                80         697         693
Due in 2003                      102               194         296         296
Due in 2004                       16                25          41          42
Due in 2005-2009                 760                71         831         830
Thereafter                       886                --         886         886
--------------------------------------------------------------------------------
Total                        $ 2,792           $   370     $ 3,162     $ 3,302
--------------------------------------------------------------------------------
BTCo
Due in 1999                  $    --           $    --     $    --     $     9
Due in 2000                        9                --           9           8
Due in 2001                        9                --           9           8
Due in 2002                        8                --           8           7
Due in 2003                        7                --           7           7
Due in 2004                        7                --           7           6
Due in 2005-2009                  11               247         258         359
Thereafter                        --                --          --          --
--------------------------------------------------------------------------------
Total                        $    51           $   247     $   298     $   404
--------------------------------------------------------------------------------
Other
Due in 1999                  $    --           $    --     $    --     $   200
Due in 2000                       --                --          --         200
--------------------------------------------------------------------------------
Total                        $    --           $    --     $    --     $   400
--------------------------------------------------------------------------------
Total long-term debt                                       $ 3,460     $ 4,106
--------------------------------------------------------------------------------
Less: Amortization for risk-based capital purposes        (1,036)         (882)
--------------------------------------------------------------------------------
Less: Subordinated debt in excess of risk-based
 capital limitations                                          --          (111)
--------------------------------------------------------------------------------
Total long-term debt included in risk-based capital      $ 2,424       $ 3,113
================================================================================

Long-term debt not included in risk-based capital

                                    Senior       Senior     Dec. 31,    Dec. 31,
                                     Fixed     Floating         1999        1998
(in millions)                         Rate         Rate        Total       Total
--------------------------------------------------------------------------------
Bankers Trust
Due in 1999                        $    --      $    --      $    --     $   836
Due in 2000                            194          542          736         737
Due in 2001                            250          868        1,118       1,128
Due in 2002                             --          555          555         564
Due in 2003                             --          499          499         663
Due in 2004                             --            7            7           7
Due in 2005-2009                       113          443          556         691
Thereafter                              --           --           --          --
--------------------------------------------------------------------------------
Total                              $   557      $ 2,914      $ 3,471     $ 4,626
--------------------------------------------------------------------------------
BTCo
Due in 1999                        $    --      $    --      $    --     $ 1,805
Due in 2000                            466          647        1,113       1,113
Due in 2001                              6          533          539         659
Due in 2002                            729          528        1,257         722
Due in 2003                             36           --           36         103
Due in 2004                              2            8           10         380
Due in 2005-2009                        50           --           50       1,636
Thereafter                               3            8           11           8
--------------------------------------------------------------------------------
Total                              $ 1,292      $ 1,724      $ 3,016     $ 6,426
--------------------------------------------------------------------------------
Other
Other (fixed rate)                                           $   828     $    21
Other (floating rate)                                          4,231       2,824
--------------------------------------------------------------------------------
Total long-term debt                                         $11,546     $13,897
Add: Amortization for risk-based capital purposes              1,036         882
Add: Subordinated debt in excess of risk-based
 capital limitations                                              --         111
--------------------------------------------------------------------------------
Total long-term debt not included in risk-based capital      $12,582     $14,890
================================================================================

      Based solely on the contractual terms of the debt issues, at December 31,
1999 and 1998 the Corporation's total fixed rate long-term debt had a
weighted-average interest rate of 6.41 percent and 6.98 percent, respectively.

      The Corporation has entered into interest rate and currency swap
agreements for many of its long-term debt issues, in order to manage its
interest rate and currency risks.

      The interest rates for the floating rate debt issues and the fixed rate
debt issues effectively converted to floating are generally based on LIBOR,
although in certain instances they are subject to minimum interest rates as
specified in the agreements governing the respective issues.

      The weighted-average effective interest rates for total long-term debt,
including the effects of the related swap agreements, were 5.38 percent and 5.06
percent at December 31, 1999 and 1998, respectively.

      At December 31, 1999 and 1998, certain subsidiaries of Bankers Trust
Company had outstanding $1.2 billion and $3.54 billion, respectively of
mandatory redeemable preference securities included in the table above which are
not included in risk-based capital. Maturities at December 31, 1999 range from
April 2000 to May 2002 and maturities at December 31, 1998 ranged from February
1999 to December 2005. Additionally, a subsidiary of the Corporation, had
outstanding $1.83 billion of mandatory redeemable


36 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

preference securities included in the table above which are not included in
risk-based capital. These securities mature in December 2003.

Note 10-- Mandatorily Redeemable Capital Securities of Subsidiary Trusts Holding
Solely Junior Subordinated Deferrable Interest Debentures Included in Risk-Based
Capital ("Trust Preferred Capital Securities")

The trust preferred capital securities are issued by trusts all of whose
outstanding common securities are owned by either Bankers Trust or BTCo. The
trust preferred capital securities represent preferred undivided beneficial
interests in the assets of the trusts. The trusts exist for the sole purpose of
issuing the trust preferred capital securities and investing the proceeds
thereof in junior subordinated deferrable interest debentures issued by Bankers
Trust or BTCo, as applicable (the "debentures"). The debentures are unsecured
and subordinated to all senior indebtedness of Bankers Trust or BTCo, as
applicable, and are the sole assets of the trusts. Payments under the debentures
by either Bankers Trust or BTCo are the same as those for the trust preferred
capital securities. The debentures are redeemable prior to stated maturity at
the option of Bankers Trust or BTCo during the redemption periods described
below. The trust preferred capital securities are subject to mandatory
redemption upon repayment of the related debentures at their stated maturity
dates or their earlier redemption at a redemption price equal to their
liquidation amount plus accrued distributions to the date fixed for redemption
and the premium, if any, paid by Bankers Trust or BTCo upon concurrent repayment
of the related debentures.

      Bankers Trust and BTCo, as applicable, have issued guarantees for the
payment of distributions and payments on liquidation or redemption of the trust
preferred capital securities, but only to the extent of funds held by the
relevant trust.

      The appropriate obligations of Bankers Trust or BTCo under each series of
debentures, the relevant indenture and trust agreement, the relevant guarantee
and certain other related agreements, in the aggregate, constitute a full and
unconditional guarantee by Bankers Trust or BTCo, as applicable, of each trust's
obligations under the relevant trust preferred capital securities.

      The Corporation is required by the Federal Reserve to maintain certain
levels of capital. The Federal Reserve has announced that certain cumulative
preferred securities having the characteristics of trust preferred capital
securities qualify as minority interest, which is included in Tier 1 Capital for
bank holding companies. Such Tier 1 Capital treatment, together with Bankers
Trust's ability to deduct, for federal income tax purposes, interest expense on
the corresponding debentures, provides Bankers Trust with a cost-effective means
of obtaining capital for regulatory purposes.


The following is a summary of the outstanding trust preferred capital securities
and debentures:

<TABLE>
<CAPTION>
                                       Aggregate       Aggregate
                                     Liquidation     Liquidation    Per Annum
                                       Amount of       Amount of     Interest
                                           Trust           Trust      Rate of
                                       Preferred       Preferred   Debentures
                                         Capital         Capital    and Trust
                                   Securities at   Securities at    Preferred           Interest
                                    December 31,    December 31,      Capital            Payment
($ in millions)                             1999            1998   Securities              Dates
--------------------------------------------------------------------------------------------------
<S>                                         <C>             <C>          <C>           <C>  <C>
Bankers Trust--Obligated
BT Institutional Capital Trust A(3)         $290            $290         8.09%         6/1, 12/1

BT Institutional Capital Trust B             200             200         7.75          6/1, 12/1

BT Capital Trust B                           250             250         7.90         1/15, 7/15

BT Preferred Capital Trust I                 250             250            8 1/8     3/31, 6/30
                                                                                     9/30, 12/31
BT Preferred Capital Trust II(3)             203             203        7.875         2/25, 8/25

BTCo--Obligated
BTC Capital Trust I                          250             250      3-Month         3/30, 6/30
                                                                        LIBOR        9/30, 12/30
                                                                    plus 0.75%
--------------------------------------------------------------------------------------------------
Total                                     $1,443(1)       $1,443(1)
==================================================================================================

<CAPTION>
                                          Stated
                                     Maturity of
                                      Debentures
                                       and Trust
                                       Preferred       Earlier          Redemption
                                         Capital      Maturity           Period of
($ in millions)                       Securities          Date(2)       Debentures
----------------------------------------------------------------------------------
<S>                                      <C>           <C>             <C>
Bankers Trust--Obligated
BT Institutional Capital Trust A(3)      12/1/26            --         On or after
                                                                           12/1/06
BT Institutional Capital Trust B         12/1/26            --         On or after
                                                                           12/1/06
BT Capital Trust B                       1/15/27       1/15/17         On or after
                                                                           1/15/07
BT Preferred Capital Trust I              2/1/37        2/1/02         On or after
                                                                            2/1/02
BT Preferred Capital Trust II(3)         2/25/27       2/25/12         On or after
                                                                           2/25/07
BTCo--Obligated
BTC Capital Trust I                     12/30/26            --         On or after
                                                                          12/30/06

----------------------------------------------------------------------------------
Total
==================================================================================
</TABLE>

(1)   Excludes $15 million and $23 million of deferred issuance costs and
      unamortized discount at December 31, 1999 and December 31, 1998,
      respectively.

(2)   The maturity dates may be shortened under certain circumstances.

(3)   During 1998, the Corporation repurchased $10 million and $47 million of BT
      Institutional Capital Trust A and BT Preferred Capital Trust II
      securities, respectively.


                               Bankers Trust Corporation and its Subsidiaries 37
<PAGE>

Note 11 -- Preferred Stock
Series Preferred Stock

Bankers Trust is authorized to issue 190,100 shares of Series Preferred Stock,
without par value. All shares of Series Preferred Stock constitute one and the
same class and have equal rank and priority over common stockholders as to
dividends and in the event of liquidation. Each series of Series Preferred Stock
has a liquidation preference per share (as indicated below), plus accrued and
unpaid dividends, as well as contingent voting rights. Dividends on shares of
each outstanding series of preferred stock are payable quarterly and are
cumulative. The Series Preferred Stock outstandings were as follows:

                               Outstanding At
                                December 31,
                               --------------
                               1999      1998     Liquidation        Earliest
                               --------------      Preference      Redemption
                               (in millions)        Per Share            Date(1)
--------------------------------------------------------------------------------
Adjustable Rate
  Cumulative, Series Q(2)      $151      $160          $2,500        03/01/99
Adjustable Rate
  Cumulative, Series R(2)       100       109           2,500        09/01/99
7.75% Cumulative,
  Series S                      125       125           2,500        06/01/00
--------------------------------------------------------------------------------
Total preferred stock          $376      $394
================================================================================

(1)   At the option of Bankers Trust, series may be redeemed, in whole or in
      part, on or after the above mentioned redemption date at $2,500 per share
      (or $25 per depositary share), plus accrued and unpaid dividends to the
      redemption date. Any optional redemption shall be with the approval of the
      Federal Reserve Board unless at that time that body should determine that
      its approval is not required.

(2)   The dividend rate is determined by a formula that considers the interest
      rates of selected short- and long-term U.S. Treasury securities at the
      time the rate is set. In no event will the dividend rate be less than 41/2
      percent or more than 101/2 percent per annum. The rates in effect for
      Series Q were 5.17 percent and 4.50 percent at December 31, 1999 and 1998,
      respectively. The rates in effect for Series R were 5.14 percent and 4.50
      percent at December 31, 1999 and 1998, respectively.

      The number of shares of Series Preferred Stock issued, repurchased and
redeemed during 1997, 1998 and 1999 was as follows (number of shares in
thousands):

<TABLE>
<CAPTION>
                                            Fixed/
                                        Adjustable                                    Adjustable    Adjustable
                            8.55%             Rate         7 5/8%            7.50%          Rate          Rate         7.75%
                       Cumulative       Cumulative     Cumulative       Cumulative    Cumulative    Cumulative    Cumulative
                        Preferred        Preferred      Preferred        Preferred     Preferred     Preferred     Preferred
Shares of Series           Stock,           Stock,         Stock,           Stock,        Stock,        Stock,        Stock,
Preferred Stock          Series I         Series J       Series O(1)      Series P(2)   Series Q(3)   Series R(3)   Series S(3)
----------------------------------------------------------------------------------------------------------------------------
<S>                        <C>                <C>            <C>               <C>            <C>           <C>           <C>
December 31, 1996           1,000              447            592               99            65            52            50
----------------------------------------------------------------------------------------------------------------------------
  Issued                       --               --              3               --            --            --            --
  Repurchased                  --               --             --               --            (1)           (2)           --
  Redeemed(4)              (1,000)            (447)            --               --            --            --            --
----------------------------------------------------------------------------------------------------------------------------
December 31, 1997              --               --            595               99            64            50            50
----------------------------------------------------------------------------------------------------------------------------
  Issued                       --               --             --               --            --            --            --
  Repurchased                  --               --             --               --            --            (6)           --
  Redeemed(5)                  --               --           (595)             (99)           --            --            --
----------------------------------------------------------------------------------------------------------------------------
December 31, 1998              --               --             --               --            64            44            50
----------------------------------------------------------------------------------------------------------------------------
  Issued                       --               --             --               --            --            --            --
  Repurchased                  --               --             --               --            (4)           (4)           --
  Redeemed                     --               --             --               --            --            --            --
----------------------------------------------------------------------------------------------------------------------------
December 31, 1999              --               --             --               --            60            40            50
============================================================================================================================
</TABLE>

(1)   On March 1, 1995, Bankers Trust reset the interest rate on $150 million of
      75/8% Convertible Capital Securities to a rate of 61/8% per annum giving
      holders of this issue the right to convert the debt securities into
      depositary shares, at $25 per depositary share, each representing a
      one-tenth interest in a share of Series O. Approximately $147 million of
      the debt securities were converted in 1995.

(2)   On May 15, 1995, Bankers Trust reset the interest rate on $100 million of
      7.50% Convertible Capital Securities to a rate of 6.00% per annum giving
      holders of this issue the right to convert the debt securities into
      depositary shares, at $25 per depositary share, each representing a
      one-fortieth interest in a share of Series P. Approximately $98 million of
      the debt securities were converted in 1995.

(3)   Series Q, Series R and Series S are represented by depositary shares at
      $25 per depositary share, each representing a one-hundredth interest of a
      share.

(4)   Series I and Series J were redeemed at $100 per share plus an amount equal
      to accrued and unpaid dividends to the redemption date.

(5)   Series O and Series P were redeemed at $250 per share (or $25 per
      depositary share) and $1000 per share (or $25 per depositary share),
      respectively, plus an amount equal to accrued and unpaid dividends to the
      redemption date.


38 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

Note 12 -- Preferred Share Purchase Rights

On February 16, 1988, the Board of Directors of Bankers Trust Corporation
declared a dividend distribution of one Preferred Share Purchase Right ("Right")
for each share of common stock held, payable February 26, 1988 to stockholders
of record on that date. Rights also automatically attached to each share of
common stock issued after February 26, 1988. Each Right entitled the registered
holder to purchase from Bankers Trust a one-hundredth interest in a share of
Bankers Trust's Series C ("Series C") Junior Participating Preferred Stock at an
exercise price of $480, as amended, subject to certain adjustments. No Series C
shares were ever issued. The Rights terminated on the COC date.

Note 13 -- Common Stock and Stock-Based Compensation Plans

Common stock activity during 1999, 1998 and 1997 was as follows:

<TABLE>
<CAPTION>
Year Ended December 31,                        1999                 1998              1997
------------------------------------------------------------------------------------------
<S>                                     <C>                   <C>               <C>
Common shares outstanding,
  beginning of year                      95,714,120           96,956,340        99,189,329
------------------------------------------------------------------------------------------
Shares issued or distributed under
  employee benefit plans                  2,974,125            4,192,633         7,167,221
Conversion of 5 3/4% Convertible
  Subordinated Debentures                        --                1,434           399,450
Shares issued for acquisitions                   --                   --            14,678(1)
Shares purchased for treasury              (837,410)          (5,436,287)       (9,735,358)
Shares purchased and retired            (97,850,834)(2)               --           (78,980)
------------------------------------------------------------------------------------------
Common shares outstanding,
  end of year                                     1           95,714,120        96,956,340
================================================================================
</TABLE>

(1)   The information presented reflects the additional shares issued in
      conjunction with the Alex. Brown merger.

(2)   Amount represents shares purchased and retired in connection with
      Acquisition.

      Prior to the Acquisition, stock options were granted to purchase stock at
a price not less than the fair market value of the stock on the date of grant.
As of the Acquisition date, all unvested options vested and became immediately
exercisable. The Corporation paid $93.00 less the exercise price for each option
outstanding on the Acquisition date.

      No stock options were granted in 1999. There were no stock options
outstanding at December 31, 1999.

      The following is a summary of stock option transactions that occurred
during 1997, 1998 and 1999 (number of shares in thousands):

                                                                Weighted-Average
                                              Exercise Price      Exercise Price
                                  Options         Per Option          Per Option
--------------------------------------------------------------------------------
December 31, 1996                   9,859     $14.01-83.3125             $ 60.77
=========================================
  Granted                           7,417       68.44-111.75               93.56
  Exercised                        (4,590)      14.01-79.125               59.37
  Cancelled                          (208)                                 60.18
-----------------------------------------
December 31, 1997                  12,478       16.81-111.75               80.76
=========================================
  Granted                             959       56.25-134.50              112.88
  Exercised                        (1,970)    16.81-102.6625               65.37
  Cancelled                          (671)                                 98.87
-----------------------------------------
December 31, 1998                  10,796       21.59-134.50               85.29
=========================================
  Exercised                          (442)       21.59-90.75               57.74
  Cancelled                          (297)                                 92.61
  Settled due to COC              (10,057)
-----------------------------------------
December 31, 1999                      --                 --                  --
=========================================                                =======
Exercisable at:
December 31, 1998                   7,581                                $ 76.72
=========================================                                =======

      Deferred stock awards, which entitled certain employees to receive common
stock of the Corporation at a specified future date, were also granted prior to
the Acquisition. On the COC date, all deferred compensation amounts vested in
full.

      There were no deferred stock awards outstanding at December 31, 1999. At
December 31, 1998, there were deferred stock awards outstanding of 8,698,216
shares. In January 1999, 6,548,524 deferred stock awards were granted related to
the 1998 performance year. Compensation expense recognized for deferred stock
awards was $749 million, $275 million and $274 million in 1999, 1998 and 1997,
respectively. The increase in 1999 is due to the vesting of all deferred stock
awards on the COC date. All deferred stock awards granted during 1999 were paid
out at $93.00 per share on the COC date.

SFAS 123 Pro Forma Information

In conjunction with the Acquisition, compensation expense related to all options
outstanding as of the Acquisition date was recognized reflecting the buyout of
such options. For each option outstanding, this expense was equal to $93.00 less
the exercise price resulting in total expense of $118 million.

      Prior to the Acquisition, the Corporation applied Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and
related Interpretations in accounting for its employee stock options. Under APB
25, because the exercise price of the Corporation's employee stock options
equaled the market price of the underlying stock on the date of grant, no
compensation expense was recognized for the years ended December 31, 1998 and
1997.

      Pro forma information regarding net income and earnings per share is
required by SFAS 123, and was determined for the years ended December 31, 1998
and 1997 as if the Corporation had accounted for its employee stock options
under the fair value method of SFAS 123. For purposes of pro forma disclosure,
the


                               Bankers Trust Corporation and its Subsidiaries 39
<PAGE>

--------------------------------------------------------------------------------

estimated fair value of the options was amortized to expense over the options'
vesting period.

(in millions except earnings per share)                     1998            1997
--------------------------------------------------------------------------------
Net income (loss):
  As reported                                             $  (73)          $ 866
  Pro forma                                               $ (129)          $ 807
Basic earnings (loss) per share:
  As reported                                             $(1.05)          $8.15
  Pro forma                                               $(1.61)          $7.56
Diluted earnings (loss) per share:
  As reported                                             $(1.05)          $7.66
  Pro forma                                               $(1.61)          $7.11
================================================================================

Note 14 -- Asset and Dividend Restrictions

The Federal Reserve Act, as amended by the Monetary Control Act of 1980,
requires that reserve balances on certain deposits of depository institutions be
maintained at the Federal Reserve Bank. The required reserve balances of the
Corporation's subsidiary banks were $189 million and $200 million at December
31, 1999 and 1998, respectively. For the years 1999 and 1998, the average
reserve balances of these banks amounted to $132 million and $148 million,
respectively.

      Assets, principally trading assets and securities available for sale, of
approximately $9.569 billion at December 31, 1999 were pledged as collateral to
secure public and trust deposits, for borrowings, and for other purposes.

      Federal law also requires that "covered transactions," as defined, engaged
in by insured banks and their subsidiaries with certain affiliates, including
Bankers Trust, be at arm's length and limited to 20 percent of capital surplus.
The Federal Reserve Board defines capital surplus as Tier 1 Capital and Tier 2
Capital plus the balance of the institution's allowance for loan and lease
losses not included in Tier 2 Capital. Additionally, "covered transactions" with
any one such affiliate is limited to 10 percent of capital and surplus. Covered
transactions are defined to include, among other things, loans and other
extensions of credit to such an affiliate and guarantees, acceptances and
letters of credit issued on behalf of such an affiliate. Such loans, other
extensions of credit, guarantees, acceptances and letters of credit must be
secured. Other restrictions also apply to inter-affiliate transactions.

      Limitations exist on the availability of BTCo's undistributed earnings for
the payment of dividends to Bankers Trust without prior approval of the bank
regulatory authorities. In this regard, BTCo cannot declare dividends in 2000
without approval of the regulatory authorities. The Federal Reserve Board may
prohibit the payment of dividends if it determines that circumstances relating
to the financial condition of a bank are such that the payment of dividends
would be an unsafe and unsound practice.

      Certain other subsidiaries are subject to various regulatory and other
restrictions that may limit cash dividends and advances to Bankers Trust.

Note 15 -- Regulatory Capital

The Corporation and its banking subsidiaries are subject to various regulatory
capital requirements administered by the federal banking agencies. The Federal
Reserve Board's risk-based capital guidelines address the capital adequacy of
bank holding companies and banks (collectively, "banking organizations"). These
guidelines include a definition of capital, a framework for calculating
risk-weighted assets, and minimum risk-based capital ratios to be maintained by
banking organizations. A banking organization's risk-based capital ratios are
calculated by dividing its qualifying capital by its risk-weighted assets. The
Federal Reserve Board also has a minimum Leverage ratio that is used as a
supplement to the risk-based capital ratios in evaluating the capital adequacy
of banks and bank holding companies. The Leverage ratio is calculated by
dividing Tier 1 Capital by adjusted quarterly average assets.

      Failure to meet minimum capital requirements can initiate certain
mandates, and possibly additional discretionary actions by the regulators that,
if undertaken, could have a direct material effect on the consolidated financial
statements of the Corporation and BTCo.

      Under the risk-based capital guidelines, there are two categories of
capital: core capital ("Tier 1 Capital") and supplemental capital ("Tier 2
Capital"), collectively referred to as Total Capital. Tier 1 Capital includes
common stockholders' equity, qualifying perpetual preferred stock, qualifying
trust preferred capital securities and minority interest in equity accounts of
consolidated subsidiaries. Tier 2 Capital includes perpetual preferred stock and
trust preferred capital securities (to the extent ineligible for Tier 1
Capital), hybrid capital instruments (i.e., perpetual debt and mandatory
convertible securities), limited amounts of subordinated debt, intermediate-term
preferred stock, and a portion of the allowance for credit losses.

      Risk-weighted assets are calculated by assigning nontrading account assets
and off-balance sheet items to broad risk categories.

      The Corporation had previously adopted the market risk amendment to the
risk-based capital guidelines issued by the Federal Reserve Board and the Bank
for International Settlements (BIS). The amendment changed the calculation of
the risk-weighted assets for trading accounts from assigning trading assets to
broad risk categories to the use of internal models to measure market risk.

      The market risk amendment also provides for the inclusion of Tier 3
Capital, which is defined to be subordinated debt that is unsecured; has an
original maturity of a minimum of two years; is not redeemable before maturity
without prior approval from the Federal Reserve; and includes a lock-in clause
precluding payment of either interest or principal if the payment would cause
the issuing organization's risk-based capital ratio to fall below the minimum
required level.

      In addition, under the prompt corrective action provisions of the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), five capital
categories were established for banks. Pursuant to that statute, the federal
bank regulatory agencies have specifically defined these categories by
determining that a bank is well capitalized if it maintains a Tier 1 Capital
ratio of at least 6.0 percent, a Total Capital ratio of at least 10 percent and
a Leverage ratio of at least 5.0 percent.

      The Federal Reserve Board has also adopted these same thresholds for the
Tier 1 Capital ratio and Total Capital ratio in defining a well-capitalized bank
holding company. The well-capitalized


40 Bankers Trust Corporation and its Subsidiaries
<PAGE>

41

threshold for the Leverage ratio is not applicable at the bank holding company
level.

      Based on their respective regulatory capital ratios at December 31, 1999
and December 31, 1998, both the Corporation and BTCo are well capitalized. There
are no conditions or events that management believes have changed the
Corporation's and BTCo's well-capitalized status.

      The Corporation's and BTCo's actual capital amounts and ratios are
presented in the table below.

<TABLE>
<CAPTION>
                                                                                       FRB
                                                                                   Minimum     To Be Well
                                                                                       For    Capitalized
                                                                                   Capital          Under
                                    Actual as of           Actual as of           Adequacy     Regulatory
                                      12/31/99               12/31/98            Purposes:    Guidelines:
---------------------------------------------------------------------------------------------------------
($ in millions)                 Amount        Ratio    Amount        Ratio           Ratio          Ratio
---------------------------------------------------------------------------------------------------------
<S>                             <C>           <C>      <C>            <C>             <C>            <C>
Corporation
 Risk-Based Capital Ratios
  Tier 1 Capital(1)             $4,462        10.4%    $5,069         7.5%            4.0%           6.0%
  Total Capital(1)               7,861        18.4%     9,281        13.6%            8.0%          10.0%
 Leverage Ratio(2)              $4,462         7.3%    $5,069         3.5%            3.0%           N/A
BTCo
 Risk-Based Capital Ratios
  Tier 1 Capital(1)             $5,710        16.5%    $6,682        10.5%            4.0%           6.0%
  Total Capital(1)               6,561        18.9%     8,540        13.4%            8.0%          10.0%
 Leverage Ratio(2)              $5,710        12.3%    $6,682         5.7%            3.0%           5.0%
</TABLE>

(1)   Ratios are calculated on Tier 1 Capital and Total Capital as a percentage
      of risk-weighted assets.

(2)   Ratio is calculated on Tier 1 Capital as a percentage of adjusted
      quarterly average assets.

N/A Not Applicable.

Note 16 -- Interest Revenue and Interest Expense

The following are the components of interest revenue and interest expense:

(in millions) Year Ended December 31,               1999        1998        1997
--------------------------------------------------------------------------------
Interest Revenue
Interest-bearing deposits with banks              $  309      $  310      $  395
Federal funds sold                                   160         211         266
Securities purchased under
  resale agreements                                  675       1,635       1,352
Securities borrowed                                  383       1,222         746
Trading assets                                       916       2,388       2,488
Securities available for sale
  Taxable                                            362         633         436
  Exempt from federal income taxes                    22          43          32
Loans                                              1,522       1,711       1,437
Customer receivables                                  70         138         133
--------------------------------------------------------------------------------
Total interest revenue                             4,419       8,291       7,285
--------------------------------------------------------------------------------
Interest Expense
Interest-bearing deposits
  Domestic offices                                   694       1,183         895
  Foreign offices                                    730       1,012       1,181
Trading liabilities                                  131         462         476
Securities loaned and securities sold
  under repurchase agreements                        539       1,897       1,413
Other short-term borrowings                          796       1,327       1,193
Long-term debt                                       608         921         655
Mandatorily redeemable capital
  securities of subsidiary trusts holding
solely junior subordinated deferrable
interest debentures included in
risk-based capital                                   114         117         113
--------------------------------------------------------------------------------
Total interest expense                             3,612       6,919       5,926
--------------------------------------------------------------------------------
Net interest revenue                              $  807      $1,372      $1,359
================================================================================

Note 17 -- Trading Revenue

The following are the components of trading revenue:

(in millions) Year Ended December 31,               1999        1998        1997
--------------------------------------------------------------------------------
Interest rate risk                                $ (165)     $ (427)     $  433
Foreign exchange risk                                139         426         277
Equity and commodity risk                             68        (183)        345
--------------------------------------------------------------------------------
Total trading revenue                             $   42      $ (184)     $1,055
================================================================================

Note 18 -- Pension and Other Employee Benefit Plans

The Corporation has a trusteed, noncontributory, defined benefit pension plan
covering substantially all domestic employees. Effective January 1, 1999, the
value of a participant's accrued benefit is expressed using a cash balance
account approach (a type of defined benefit plan). Previously, the pension plan
benefit formula was based upon years of service and average compensation over
the final years of service.

      The Corporation also has both defined benefit and defined contribution
retirement and similar plans covering the majority of its foreign employees.
Contributions to defined contribution plans are based upon a percentage of
salary.

      During 1998 and 1997, the Corporation maintained a noncontributory profit
sharing plan, called PartnerShare, covering certain domestic employees. The
Corporation's contribution consisted of a fixed contribution equal to six
percent of eligible domestic employees' annual salary as well as an additional
contribution of from zero to nine percent of eligible employees' annual salary,
which percentage was calculated using a formula based on the Corporation's
consolidated income before income taxes. Expense recognized for


                               Bankers Trust Corporation and its Subsidiaries 41
<PAGE>

this plan amounted to $27 million and $53 million for the years ended December
31, 1998 and 1997, respectively.

      Effective January 1, 1999, the Corporation implemented a 401 (k) Savings
Plan covering substantially all domestic employees, which replaced the
Partnershare Plan and the Corporation's prior 401(k) plan. Employees are
permitted within limitations imposed by tax laws to make pretax contributions to
the 401(k) Savings Plan. The Corporation makes fixed contributions equaling
three percent of eligible domestic employees' annual salary and will also match
employees' contributions up to three percent of eligible salary. The Corporation
may, solely at its discretion, match an additional zero percent to 200 percent
of the employees' contribution up to 3 percent of eligible salary. Expense
recognized for this plan amounted to $27 million for the year ended December 31,
1999.

      The Corporation also provides health care benefits to employ ees
(retirees) who met specific age and/or service requirements on January 1, 1990
provided that they retire (retired) under the principal domestic pension plan
with at least ten years of service. This plan is contributory for participating
retirees and also requires them to absorb deductibles and coinsurance. The
Corporation also provides noncontributory life insurance benefits for
substantially all domestic retirees who retired before January 1, 1999 with at
least ten years of service.

      The following tables provide a reconciliation of the changes in the plans'
benefit obligations and fair value of assets over the two-year period ended
December 31, 1999 and a statement of the funded status as of December 31 of both
years:

<TABLE>
<CAPTION>
                                                        Pension Benefits    Postretirement Benefits
---------------------------------------------------------------------------------------------------
(in millions)                                          1999          1998          1999        1998
---------------------------------------------------------------------------------------------------
<S>                                                 <C>           <C>           <C>         <C>
Change in benefit obligation
Benefit obligation at beginning of year             $   803       $   685       $   101     $   126
Service cost                                             33            23             1           1
Interest cost                                            52            48             6           7
Plan amendments                                          --            25            --          --
Acquisitions                                             --            13            --          --
Actuarial (gain) loss                                  (111)           28           (10)        (19)
Benefits paid                                           (50)          (21)           (4)         (7)
Curtailment/settlement                                  (12)           --            --          (7)
Foreign currency exchange rate changes                   (5)            2            --          --
---------------------------------------------------------------------------------------------------
Benefit obligation at end of year                   $   710       $   803       $    94     $   101
===================================================================================================
Change in plan assets
Fair value of plan assets at beginning
 of year                                            $ 1,107       $   973       $     4     $     4
Actual return on plan assets                            172           144            --          --
Employer contributions                                    6             2             4           7
Acquisitions                                             --            13            --          --
Benefits paid                                           (50)          (21)           (4)         (7)
Curtailment/settlement                                   (7)           (5)           --          --
Foreign currency exchange rate changes                   (4)            1            --          --
---------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year            $ 1,224       $ 1,107       $     4     $     4
===================================================================================================
Funded Status                                       $   514       $   304       $   (90)    $   (97)
Unrecognized net (gain) loss                           (315)         (143)          (34)        (28)
Unrecognized prior service cost                          18            35             5           2
Unrecognized net (assets) obligations                    (7)          (11)           --          --
---------------------------------------------------------------------------------------------------
Prepaid (accrued) benefit cost at end of year*      $   210       $   185       $  (119)    $  (123)
===================================================================================================
</TABLE>

*     Prepaid pension costs totaled $229 million and $210 million at December
      31, 1999 and 1998, respectively. No prepaid postretirement costs were
      recognized at these dates.

      The aggregate projected benefit obligation, accumulated benefit
obligation, and fair value of plan assets for those pension plans with
accumulated benefit obligations in excess of plan assets were $16 million, $16
million and $1 million, respectively, as of December 31, 1999 and $24 million,
$23 million and $3 million, respectively, as of December 31, 1998.

      Benefits expense for 1999, 1998 and 1997 included the following
components:

<TABLE>
<CAPTION>
                                                Pension Benefits             Postretirement Benefits
----------------------------------------------------------------------------------------------------
(in millions) Year Ended December 31,      1999       1998       1997       1999      1998      1997
----------------------------------------------------------------------------------------------------
<S>                                        <C>        <C>        <C>        <C>       <C>       <C>
Service cost                               $ 33       $ 23       $ 21       $  1      $  1      $  1
Interest cost                                52         48         45          6         7         8
Expected return on plan assets              (94)       (84)       (81)        --        --        --
Net amortization and deferral                (5)        (6)        (1)        (3)       (3)       --
----------------------------------------------------------------------------------------------------
Total defined benefit plans                 (14)       (19)       (16)         4         5         9
====================================================================================================
Defined contribution plans                   43         79         88         --        --        --
Other plans                                   5          4          6         --        --        --
----------------------------------------------------------------------------------------------------
Net periodic benefit expense               $ 34       $ 64       $ 78       $  4      $  5      $  9
====================================================================================================
</TABLE>

42 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

      The actuarial assumptions used for the principal domestic defined benefit
plan and postretirement benefit plan were as follows:

<TABLE>
<CAPTION>
                                                                 Pension Benefits                     Postretirement Benefits
------------------------------------------------------------------------------------------------------------------------------------
                                                         1999          1998          1997          1999          1998          1997
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>           <C>           <C>           <C>           <C>
Discount rate in determining expense                     6.75%         7.00%         7.50%         6.75%         7.00%         7.50%
Discount rate in determining benefit
  obligations at year end                                7.75%         6.75%         7.00%         7.75%         6.75%         7.00%
Rate of increase in future compensation
  levels for determining expense                         5.00%         5.00%         5.00%         5.00%         5.00%         5.00%
Rate of increase in future compensation
  levels for determining benefit obligations
  at year end                                            5.00%         5.00%         5.00%         5.00%         5.00%         5.00%
Expected long-term rate of return on assets              9.00%         9.00%         9.00%         9.00%         9.00%         9.00%
</TABLE>

      The assumptions used for the other domestic and the principal foreign
defined benefit pension plans were substantially similar to those used for the
principal domestic pension plan, given local economic conditions in the cases of
the principal foreign pension plans.

      In determining postretirement benefits expense, a 7.00 per cent annual
rate of increase in the per capita cost of covered health care benefits was
assumed for 2000. The rate was assumed to decrease gradually to 5.50 percent
over 2 years and remain at that level thereafter.

      Assumed health care cost trend rates have a significant effect on the
amounts reported for the retiree health care plan. A one-percentage-point change
in assumed health care cost trend rates would have the following effects on the
Corporation's retiree health care plan:

                                             One-Percentage      One-Percentage
                                             Point Increase      Point Decrease
--------------------------------------------------------------------------------
(in millions)                               1999       1998    1999        1998
--------------------------------------------------------------------------------
Effect on total of service and interest
 cost components                           $  --      $   1   $ (--)      $  (1)
Effect on accumulated postretirement
 benefit obligation                        $   5      $   6   $  (5)      $  (6)

Benefit Plan Changes

Effective January 1, 2000, the Corporation's trusteed, noncontributory, domestic
defined benefit pension plan merged with Deutsche Bank Americas Holding Corp.'s
pension plan. There has been no change in the value of a participant's accrued
benefit as a result of this transaction.

Note 19 -- Restructuring and Other Related Activities

During 1999, the Corporation recorded pre-tax charges for restructuring and
other related activities totaling $633 million. Of this amount, $459 million
related to a restructuring charge recorded in the second quarter in conjunction
with the Acquisition ("Plan 1"). This charge reflected $394 million of severance
and other termination-related costs as well as $65 million of other costs
primarily related to lease terminations and write-offs of fixed assets and
leasehold improvements. During the fourth quarter, the Corporation recorded
additional charges related to restructuring and other related activities of $174
million in connection with its continuing efforts to streamline support
functions and realign certain business activities ("Plan 2"). These charges
reflected $116 million of severance and other termination-related costs, as well
as $58 million of other costs primarily related to the intended liquidation of
certain financial assets.

                                      Plan 1                     Plan 2
                             ---------------------------------------------------
(in millions)                Severance     Other    Severance     Other    Total
--------------------------------------------------------------------------------
Beginning Reserve
  Balance                         $394      $ 65         $116      $ 58     $633
Charges Against Reserve            282        54           59        --      395
--------------------------------------------------------------------------------
Ending Reserve Balance at
  December 31, 1999               $112      $ 11         $ 57      $ 58     $238
================================================================================

      At December 31, 1999, $169 million of the remaining reserve balance
related to severance and other termination-related costs for further staff
reductions of approximately 850 positions. These severance actions, as well as
the actions related to other exit activities, are expected to be substantially
completed during 2000.

Note 20 -- Income Taxes

The Corporation's 1999 results of operations are included in the consolidated
tax returns of Taunus.

      The domestic and foreign components of consolidated income (loss) before
income taxes (benefit) follow:

(in millions) Year Ended December 31,              1999          1998       1997
--------------------------------------------------------------------------------
Domestic                                        $(1,104)      $   (83)   $   640
Foreign                                            (311)            6        599
--------------------------------------------------------------------------------
Total                                           $(1,415)      $   (77)   $ 1,239
================================================================================


                               Bankers Trust Corporation and its Subsidiaries 43
<PAGE>

--------------------------------------------------------------------------------

      For purposes of determining the above amounts, foreign income is defined
as income recorded by operations located outside of the U.S.

      Deferred income taxes result from differences in the timing of revenue and
expense recognition for income tax and financial reporting purposes.

      An analysis of consolidated income taxes (benefit) follows:

(in millions) Year Ended December 31,             1999         1998        1997
--------------------------------------------------------------------------------
Income taxes (benefit) applicable to:
  Income (loss) before income
   taxes (benefit)*                              $ 188        $  (4)      $ 373
  Capital surplus                                   (5)         (50)        (73)
  Cumulative translation adjustments                41          (10)         76
  Securities valuation allowance                    28          (13)        (57)
--------------------------------------------------------------------------------
Total                                            $ 252        $ (77)      $ 319
================================================================================

*     Includes income tax expense (benefit) related to securities available for
      sale transactions of $4 million, $(7) million and $68 million in 1999,
      1998 and 1997, respectively.

      The components of consolidated income taxes (benefit) follow:

(in millions) Year Ended December 31,              1999        1998        1997
--------------------------------------------------------------------------------
Current
  Federal                                         $ 290       $  (9)      $ 198
  Foreign                                           237         175         232
  State and local                                   120          33         161
--------------------------------------------------------------------------------
Total current                                       647         199         591
--------------------------------------------------------------------------------
Deferred
  Federal                                          (122)       (229)       (203)
  Foreign                                          (171)         10         (31)
  State and local                                  (102)        (57)        (38)
--------------------------------------------------------------------------------
Total deferred                                    $(395)       (276)       (272)
--------------------------------------------------------------------------------
Total                                             $ 252       $ (77)      $ 319
================================================================================

      The following is an analysis of the difference between the U.S. federal
statutory income tax (benefit) and the effective tax (benefit) on consolidated
income (loss) before income taxes:

(in millions) Year Ended December 31,               1999        1998       1997
--------------------------------------------------------------------------------
Computed expected tax expense (benefit)            $(495)      $ (27)     $ 434
State and local income taxes (benefit)                 7         (15)        55
Tax-exempt income                                    (11)        (17)       (58)
Foreign subsidiary earnings                          428          54        (47)
Valuation allowance                                  211          --        (20)
Nondeductible penalty                                 --          22         --
Other                                                 48         (21)         9
--------------------------------------------------------------------------------
Effective income tax (benefit)                     $ 188       $  (4)     $ 373
================================================================================

      The following is an analysis of the Corporation's net deferred tax assets:

(in millions) December 31,                                    1999          1998
--------------------------------------------------------------------------------
Deferred tax assets                                         $1,943        $1,486
Valuation allowance                                            418           207
--------------------------------------------------------------------------------
Deferred tax assets net of valuation allowance               1,525         1,279
Deferred tax liabilities                                       158           307
--------------------------------------------------------------------------------
Net deferred tax assets                                     $1,367        $  972
================================================================================

      At December 31, 1999, the Corporation's deferred tax assets were primarily
related to foreign tax credit carryovers that will expire in 2003 and 2004 ($545
million), credit losses ($299 million), net operating loss carryovers that
primarily will start to expire in 2018 ($133 million), and international
operations ($81 million). Deferred tax liabilities were primarily related to
certain trading activities ($49 million) and lease financing activities ($46
million).

      At December 31, 1998, the Corporation's deferred tax assets were primarily
related to credit losses ($332 million), employee benefits ($317 million) and
international operations ($292 million). Deferred tax liabilities were primarily
related to certain trading activities ($201 million) and lease financing
activities ($83 million).

Note 21 -- Earnings (Loss) per Common Share

At December 31, 1997, the Corporation adopted SFAS 128, "Earnings Per Share,"
which established standards for computing and presenting earnings per share.

      Due to the Acquisition, earnings per common share are not meaningful for
1999. The following table sets forth the computation of basic and diluted
earnings (loss) per share for the years ended December 31, 1998 and 1997 (in
millions, except per share amounts):

Year Ended December 31,                                    1998            1997
--------------------------------------------------------------------------------
Numerator
  Net income (loss)                                   $     (73)      $     866
  Preferred stock dividends                                 (32)            (49)
--------------------------------------------------------------------------------
  Numerator for basic earnings (loss) per
    share--net income (loss) applicable
    to common stockholders                                 (105)            817
  Effect of dilutive securities
    Convertible subordinated debentures                      --               3
--------------------------------------------------------------------------------
    Numerator for diluted earnings (loss) per
      share--net income (loss) applicable to
      common stockholders after
      assumed conversions                             $    (105)      $     820
================================================================================
Denominator
  Denominator for basic earnings (loss) per
    share--weighted-average shares
    outstanding                                         100.152         100.286
  Effect of dilutive securities*
    Options                                                  --           1.839
    Convertible subordinated
      debentures                                             --           2.457
    Deferred stock                                           --           2.408
--------------------------------------------------------------------------------
  Dilutive potential common shares                           --           6.704
    Denominator for diluted earnings (loss)
      per share--adjusted weighted-
      average shares after assumed
      conversions                                       100.152         106.990
================================================================================
Basic earnings (loss) per share                       $   (1.05)      $    8.15
================================================================================
Diluted earnings (loss) per share                     $   (1.05)      $    7.66
================================================================================

*     Due to a loss for the year ended December 31, 1998, no incremental shares
      are included in the loss per share calculation because the effect would be
      antidilutive.


44 Bankers Trust Corporation and its Subsidiaries
<PAGE>

Note 22 -- Business Segments and Related Information

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," redefines operating segments and establishes standards for
reporting information about operating segments and related disclosures about
products and services, geographic areas, and major customers.

      In order to conform to Deutsche Bank's management structure, the
Corporation has realigned its business activities into the following business
segments: Retail and Private Banking, Asset Management, Global Corporates and
Institutions, and Global Technology and Services. All prior periods have been
restated to conform with the Deutsche Bank reporting format.

      Business segments results are determined based on the Corporation's
internal management accounting process, which allocates revenue and expenses
among the business segments. Because the Corporation's business is diverse in
nature and its operations are integrated, certain estimates and judgments have
been made to apportion revenue and expense items. The internal management
accounting process, unlike financial accounting in accordance with generally
accepted accounting principles, is based on the way management views its
business and is not necessarily comparable with similar information disclosed by
other financial institutions. The accounting policies of the business segments
are generally the same as those described in Note 2.

      Segments that hold net asset positions are allocated interest expense to
reflect their net use of funds and segments that have net liability positions
are allocated interest income to reflect their net contribution of funds.

      The Retail and Private Banking division provides banking services to
private clients, self-employed individuals as well as to smaller business
clients, and offers a wide variety of banking products to these clients
including financial planning services and market research and investment
strategies for high net worth individuals.

      The Asset Management division combines the institutional asset management
and retail investment fund businesses.

      The Global Corporates and Institutions division integrates long-standing
relationship and credit-oriented commercial banking with the product and
transactional orientation of investment banking for corporate clients and
financial institutions. This business segment also includes credit business,
trade finance, structured finance and cash management in addition to the
Corporation's private equity business and trading activities.

      Global Technology and Services comprises custody services, payment
settlement, securities settlement, and electronic banking services.

<TABLE>
<CAPTION>
Year Ended                                                                      Global            Global            Total
December 31, 1999                           Retail and         Asset    Corporates and    Technology and         Business
(in millions)                          Private Banking    Management      Institutions          Services         Segments
-------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>           <C>               <C>               <C>              <C>
Net revenues from external customers*         $    169      $    241          $  1,378          $    922         $  2,710
Net interest revenue                                38            (3)              378               181              594
Credit quality expense--loans                       --            --                64                 2               66
Pre-tax income (loss)                              (20)           20            (1,275)              (48)          (1,323)
Total assets*                                    2,589           222            55,774             7,453           66,038
</TABLE>

*     There were no material intersegment revenues or intersegment assets among
      the business segments.

<TABLE>
<CAPTION>
Year Ended                                                                      Global            Global            Total
December 31, 1998                           Retail and         Asset    Corporates and    Technology and         Business
(in millions)                          Private Banking    Management      Institutions          Services         Segments
-------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>           <C>               <C>               <C>              <C>
Net revenues from external customers*         $    187      $    253          $  2,567          $    946         $  3,953
Net interest revenue                                40            (3)              658               190              885
Credit quality expense--loans                        2            --                85                 1               88
Pre-tax income (loss)                               12            98              (491)               46             (335)
Total assets*                                    3,063           185           106,433             8,907          118,588
</TABLE>

*     There were no material intersegment revenues or intersegment assets among
      the business segments.

<TABLE>
<CAPTION>
Year Ended                                                                      Global            Global            Total
December 31, 1997                           Retail and         Asset    Corporates and    Technology and         Business
(in millions)                          Private Banking    Management      Institutions          Services         Segments
-------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>           <C>               <C>               <C>              <C>
Net revenues from external customers*         $    173      $    191          $  3,499          $    915         $  4,778
Net interest revenue                                32            --               618               167              817
Credit quality expense--loans                       --            --                46                 5               51
Pre-tax income (loss)                               (3)           54               760                83              894
</TABLE>

*     There were no material intersegment revenues among the business segments.


                               Bankers Trust Corporation and its Subsidiaries 45
<PAGE>

The following table reconciles total net revenue for business segments to
consolidated net revenue (in millions):

<TABLE>
<CAPTION>
Year Ended December 31,                                1999           1998             1997
-------------------------------------------------------------------------------------------
<S>                                                 <C>            <C>              <C>
Total net revenue reported for business
  segments                                          $ 2,710        $ 3,953          $ 4,778
Earnings associated with unassigned
  capital                                               195            317              342
Net revenue of entities sold                            370            855              932
Gain on sale of BTAL*                                   779             --               --
Gain on sale of office building                          --             --               76
Credit quality adjustment                               124             48               51
Other                                                   187            (84)              41
-------------------------------------------------------------------------------------------
Consolidated net revenue(1)                         $ 4,365        $ 5,089          $ 6,220
===========================================================================================
</TABLE>

(1)   Consolidated net revenue includes net interest revenue after provision for
      credit losses--loans and noninterest revenue.

*     Gain is net of foreign currency translation losses realized on the sale.

      The following table reconciles total pre-tax income (loss) for business
segments to consolidated pre-tax income (loss) (in millions):

<TABLE>
<CAPTION>
Year Ended December 31,                                1999             1998           1997
-------------------------------------------------------------------------------------------
<S>                                                 <C>              <C>            <C>
Total pre-tax income (loss) reported for
  business segments                                 $(1,323)         $  (335)       $   894
Pre-tax income (loss) of entities sold                  (76)             188            213
Gain on sale of BTAL*                                   779               --             --
Restructuring and other related activities             (633)              --            (63)
Realized foreign currency translation
  losses**                                             (257)              --             --
Earnings associated with unassigned
  capital                                               195              317            342
Gain on sale of office building                          --               --             76
Credit quality adjustment                               124               48             51
Legal settlement                                         --              (69)            --
Legal fees                                               --               --            (32)
Other unallocated amounts                              (224)            (226)          (242)
-------------------------------------------------------------------------------------------
Consolidated pre-tax income (loss)                  $(1,415)         $   (77)       $ 1,239
===========================================================================================
</TABLE>

*     Gain is net of foreign currency translation losses realized on the sale.

**    Excluding realized foreign currency translation losses related to BTAL.

      The following table reconciles total assets for business segments to
consolidated assets (in millions):

December 31,                                                1999            1998
--------------------------------------------------------------------------------
Total assets reported for business segments             $ 66,038        $118,588
Premises and equipment                                       211              58
Securities available for sale                                 46             359
Goodwill not allocated to business segments                   22             403
Investments in unconsolidated companies
  accounted for at equity                                      3               3
Assets of entities sold                                       --          10,886
Other unallocated amounts                                  1,837           2,818
--------------------------------------------------------------------------------
Consolidated assets                                     $ 68,157        $133,115
================================================================================

      The following table reconciles the other significant items reported for
the business segments to the consolidated financial statements:

<TABLE>
<CAPTION>
(in millions) Year Ended December 31,                            1999
-------------------------------------------------------------------------------------
                                                Total
                                             Business                          Total
                                             Segments     Adjustments   Consolidated
-------------------------------------------------------------------------------------
<S>                                            <C>             <C>            <C>
Net interest revenue(1)                        $  594          $  213         $  807
Credit quality expense--loans                      66            (124)           (58)
=====================================================================================

<CAPTION>
(in millions) Year Ended December 31,                            1998                                      1997
------------------------------------------------------------------------------------------------------------------------------
                                                Total                                     Total
                                             Business                          Total    Business                         Total
                                             Segments     Adjustments   Consolidated    Segments    Adjustments   Consolidated
------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>             <C>            <C>         <C>            <C>            <C>
Net interest revenue(1)                        $  885          $  487         $1,372      $  817         $  542         $1,359
Credit quality expense--loans                      88             (48)            40          51            (51)            --
==============================================================================================================================
</TABLE>

(1)   Adjustments primarily represent earnings associated with unassigned
      capital partially offset by unallocated funding costs.

46 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

      The following table presents net revenue by geographical location (in
millions):

Year Ended December 31,                       1999           1998           1997
--------------------------------------------------------------------------------
United States                               $3,254         $2,823         $3,692
United Kingdom                                 521            993          1,159
Australia                                      284            603            576
Chile                                          153            375            441
Other foreign countries                        153            295            352
--------------------------------------------------------------------------------
Consolidated net revenue(1)                 $4,365         $5,089         $6,220
================================================================================

(1)   Consolidated net revenue includes net interest revenue after provision for
      credit losses--loans and noninterest revenue. Revenue is attributed to
      countries based on the location in which entities are incorporated.

      The following table presents net revenue of the Corporation organized
around specific products and services (in millions):

Year Ended December 31,                      1999             1998          1997
--------------------------------------------------------------------------------
Corporate Finance                          $1,163          $ 1,460       $ 1,325
Debt Investments                               35               44            71
Private Equity                                521              452           428
Trading and Risk Management                  (127)             471         1,619
Processing Services                         1,030            1,176           949
Investment Management                         427              496           479
Private Banking                               381              596           568
Insurance                                     128              331           394
Other                                         807*              63           387
--------------------------------------------------------------------------------
Consolidated net revenue                  $ 4,365          $ 5,089       $ 6,220
================================================================================

*     Amount includes the gain on the sale of BTAL.

Note 23 -- International Operations

Management views the operations of the Corporation on a business segment basis,
as disclosed in Note 22. However, in order to comply with the financial
reporting regulations of the Securities and Exchange Commission, the Corporation
is required to report international operations on the basis of the domicile of
the customer.

      Pursuant to these regulations, any business transacted with a customer who
is domiciled outside the U.S. is reported as international operations. Due to
the complex nature of the Corporation's businesses and because its revenue from
customers domiciled outside the U.S. is recorded in both domestic and foreign
offices, it is impossible to segregate with precision the respective
contributions to income from the domestic and international operations. As these
operations are highly integrated, estimates and subjective assumptions have been
made to apportion revenue and expenses between domestic and international
operations. These estimates and assumptions include the following: interest
revenue and interest expense are apportioned to geographic areas based on the
geographic distribution of average interest earning assets. The geographic
location of the assets is determined by the domicile of the customer, or for
interest earning securities, by the domicile of the issuer. Trading gains and
losses are primarily allocated based on the geographic distribution of average
trading assets as determined by the domicile of the issuer. All other
noninterest revenue is allocated based on the geographic location of the office
recording the income. Noninterest expense is basically apportioned
geographically based on the geographical distribution of operating income (net
interest revenue plus noninterest revenue). Corporate overhead expenses are
allocated based upon average assets by geographic region. International offices
are assessed a cost of funds charge based on a short-term funding rate.
Allocation of the provisions for credit losses is based on the geographical
distribution of net charges to the allowances for credit losses and management's
assessment of the risks associated with the domestic and international
portfolios. International taxes are calculated based on the foreign tax rate for
each foreign office.

      Earning assets are allocated by the domicile of the customer. All other
assets are allocated based on the location of the office recording the assets.

      Subject to the above limitations, estimates and assumptions, the following
tables present information attributable to international operations ($ in
millions):

<TABLE>
<CAPTION>
                                                                                   Income
                                                                                    (loss)          Net
                                      Total           Total          Total         before        income
                                     assets         revenue (1)   expenses (1)      taxes         (loss)
-------------------------------------------------------------------------------------------------------
1999
-------------------------------------------------------------------------------------------------------
<S>                                <C>             <C>            <C>            <C>           <C>
International operations
  Asia                             $  1,131        $    222       $    402       $   (180)     $   (145)
  Australia/New Zealand                  60             474            624           (150)         (120)
  Western Hemisphere                  8,712             802          1,057           (255)         (206)
  Europe                             18,159             684            933           (249)         (201)
  United Kingdom                     10,885             704          1,269           (565)         (453)
  Middle East/Africa                    801              58             69            (11)           (9)
Eliminations                        (21,135)           (278)          (278)            --            --
-------------------------------------------------------------------------------------------------------
Total international                  18,613           2,666          4,076         (1,410)       (1,134)
Domestic operations                  49,544           5,253          5,258             (5)         (469)
-------------------------------------------------------------------------------------------------------
Total                              $ 68,157        $  7,919       $  9,334       $ (1,415)     $ (1,603)
=======================================================================================================
International as a percentage
  of total                               27%             34%            44%           N/M           N/M
=======================================================================================================
</TABLE>

(1)   Total revenue includes interest revenue and noninterest revenue. Total
      expenses includes interest expense, noninterest expenses and provision for
      credit losses--loans.

N/M Not meaningful.

<TABLE>
<CAPTION>
                                                                                  Income
                                                                                   (loss)        Net
                                       Total       Total           Total          before      income
                                      assets     revenue (1)    expenses (1)       taxes       (loss)
----------------------------------------------------------------------------------------------------
<S>                                <C>           <C>             <C>               <C>         <C>
1998
----------------------------------------------------------------------------------------------------
International operations
  Asia                             $ 11,362      $   493         $   811           $(318)      $(210)
  Australia/New Zealand              12,095        1,062             899             163         107
  Western Hemisphere                 16,568        1,625           1,771            (146)        (96)
  Europe                             19,363          963           1,010             (47)        (30)
  United Kingdom                     29,097        1,377           1,349              28          18
  Middle East/Africa                    414           30              30              --          --
Eliminations                        (25,839)      (1,228)         (1,228)             --          --
----------------------------------------------------------------------------------------------------
Total international                  63,060        4,322           4,642            (320)       (211)
Domestic operations                  70,055        7,726           7,483             243         138
----------------------------------------------------------------------------------------------------
Total                              $133,115      $12,048         $12,125           $ (77)      $ (73)
International as a percentage
  of total                               47%          36%             38%            N/M         N/M
====================================================================================================
</TABLE>

(1)   Total revenue includes interest revenue and noninterest revenue. Total
      expenses includes interest expense, noninterest expenses and provision for
      credit losses--loans.

N/M Not Meaningful.


                               Bankers Trust Corporation and its Subsidiaries 47
<PAGE>

<TABLE>
<CAPTION>
                                                                               Income       Net
                                      Total          Total         Total       before    income
                                     assets        revenue (1)  expenses (1)    taxes     (loss)
------------------------------------------------------------------------------------------------
<S>                                <C>             <C>           <C>           <C>         <C>
1997
------------------------------------------------------------------------------------------------
International operations
  Asia                             $ 18,203        $   916       $   975       $  (59)     $(44)
  Australia/New Zealand              10,598            939           827          112        83
  Western Hemisphere                 16,420          1,618         1,509          109        81
  Europe                             15,787          1,050         1,014           36        26
  United Kingdom                     29,396          1,374         1,268          106        79
  Middle East/Africa                    471             66            62            4         3
Eliminations                        (18,210)          (851)         (851)          --        --
------------------------------------------------------------------------------------------------
Total international                  72,665          5,112         4,804          308       228
Domestic operations                  67,437          7,034         6,103          931       638
------------------------------------------------------------------------------------------------
Total                              $140,102        $12,146       $10,907       $1,239      $866
===============================================================================================
International as a percentage
  of total                               52%            42%           44%          25%       26%
===============================================================================================
</TABLE>

(1)   Total revenue includes interest revenue and noninterest revenue. Total
      expenses includes interest expense, noninterest expenses and provision for
      credit losses--loans.

Note 24-- Derivative Financial Instruments and Financial Instruments with
Off-Balance Sheet Risk

In the normal course of business, the Corporation is a party to a variety of
derivative and off-balance sheet financial instruments to meet the needs of its
customers and to manage its exposure to interest rate and other risks. These
financial instruments consist of derivatives (such as swaps, forwards and
options), securities lending indemnifications, and credit-related arrangements
and involve varying degrees of credit risk and market risk.

      Credit risk, as defined by SFAS 105, represents the maximum potential
accounting loss due to possible non-performance by obligors and counterparties
under the terms of their contracts. Market risk represents the potential loss
due to the decrease in the value of a financial instrument caused primarily by
changes in interest rates or foreign exchange rates, or the prices of equities
or commodities (or related indices).

      The Corporation manages the credit risk of its derivative and off-balance
sheet portfolios by limiting the total amount of arrangements outstanding with
individual customers; by monitoring the size and maturity structure of the
portfolios; by obtaining collateral based on management's credit assessment of
the customer; and by applying a uniform credit process for all credit exposures.
Collateral held generally includes cash and U.S. government and federal agency
securities. In order to reduce derivatives-related credit risk, the Corporation
enters into master netting agreements which incorporate the right of setoff to
provide for the net settlement of covered contracts with the same customer in
the event of default or other cancellation of the agreement.

Trading Derivative Financial Instruments

The Corporation manages trading positions in a variety of derivative contracts.
All positions are reported at fair value and changes in fair values are
reflected in trading revenue as they occur. As a result of the Acquisition, the
Corporation's former derivatives activities have been largely transferred to
Deutsche Bank entities, and it is anticipated that the existing positions at
December 31, 1999 will be reduced further over time.

      As required by SFAS 119, "Disclosure about Derivative Financial
Instruments and Fair Value of Financial Instruments," the amounts disclosed
below represent the end-of-period fair values of trading derivatives and their
average aggregate fair values during the year. These amounts are presented gross
before the impact of master netting agreements. The gross fair values of trading
derivatives do not represent the amount of market or credit risk of derivatives
in the trading portfolio. Rather, they indicate the extent of involvement in the
over-the-counter (OTC) markets for interest rate, foreign exchange rate, equity
and commodity price derivatives, and exchange traded options during the year.
Any measurement of risk is meaningful only when all related factors are
identified, such as risk-offsetting transactions, master netting agreements, and
the value of any related collateral. These factors are considered in internal
risk analyses. The accounting impact of netting agreements, which is applied on
a cross-product basis in accordance with the terms of each master agreement and
which is calculated based on the criteria prescribed by FIN 39, is provided
below in order to display how these amounts are reflected in trading assets and
trading liabilities in the consolidated balance sheet.


48 Bankers Trust Corporation and its Subsidiaries
<PAGE>


--------------------------------------------------------------------------------

      Contracts with positive fair values are recorded as assets and contracts
with negative fair values are recorded as liabilities after application of
master netting agreements. The following table reflects the gross fair values
and balance sheet amounts of trading derivative financial instruments:

<TABLE>
<CAPTION>
                                          At December 31, 1999              Average during 1999
                                     -----------------------------      --------------------------
(in millions)                          Assets        (Liabilities)       Assets      (Liabilities)
--------------------------------------------------------------------------------------------------
<S>                                  <C>              <C>               <C>            <C>
OTC Financial Instruments
Interest Rate and Currency
  Swap Contracts                     $ 6,400          $ (6,570)         $ 12,295       $(11,966)

Interest Rate Contracts
  Forwards                                --                --               205           (249)
  Options purchased                      519                                 771
  Options written                                         (614)                            (834)

Foreign Exchange Rate Contracts
  Spot and Forwards                       11                (3)            7,228         (7,081)
  Options purchased                      351                               1,043
  Options written                                         (350)                            (946)
Equity-related contracts               1,760            (1,865)            4,323         (4,685)
Commodity-related and
  other contracts                        853              (852)              693           (682)

Exchange-Traded Options
Interest Rate                             --                --                 3             (1)
Foreign Exchange                          --                --                 2             (1)
Commodity                                 --                --                 2             (3)
Equity                                    --               (16)              136             --
--------------------------------------------------------------------------------------------------
Total Gross Fair Values                9,894           (10,270)           26,701        (26,448)
--------------------------------------------------------------------------------------------------
Impact of Netting Agreements          (5,087)            5,087           (17,024)        17,024
--------------------------------------------------------------------------------------------------
                                     $ 4,807(1)       $ (5,183)(1)      $  9,677       $ (9,424)
                                     =======          ========          ========       ========
</TABLE>

<TABLE>
<CAPTION>
                                            At December 31, 1998          Average during 1998
                                     -----------------------------      --------------------------
(in millions)                          Assets        (Liabilities)     Assets      (Liabilities)
--------------------------------------------------------------------------------------------------
<S>                                  <C>               <C>            <C>            <C>
OTC Financial Instruments
Interest Rate and Currency
  Swap Contracts                     $ 26,923          $(26,401)      $ 24,062       $(22,222)
Interest Rate Contracts
  Forwards                                188              (193)           252           (242)
  Options purchased                     2,236                            1,509
  Options written                                        (2,111)                       (1,615)
Foreign Exchange Rate Contracts
  Spot and Forwards                    17,851           (17,169)        14,780        (14,875)
  Options purchased                     1,254                            1,436
  Options written                                        (1,048)                       (1,260)
Equity-related contracts                5,508            (5,672)         4,808         (5,551)
Commodity-related and
  other contracts                         966              (970)           775           (780)

Exchange-Traded Options
Interest Rate                              12                (4)             8             (8)
Foreign Exchange                           30               (39)            24            (20)
Commodity                                   8                (9)           578           (394)
Equity                                    531              (372)             2             (4)
--------------------------------------------------------------------------------------------------
Total Gross Fair Values                55,507           (53,988)        48,234        (46,971)
--------------------------------------------------------------------------------------------------
Impact of Netting Agreements          (38,131)           38,131        (30,481)        30,481
--------------------------------------------------------------------------------------------------
                                      $17,376 (1)      $(15,857)(1)   $ 17,753       $(16,490)
                                      =======          ========       ========       ========
</TABLE>

(1)   As reflected on the balance sheet in "Trading Assets" and "Trading
      Liabilities."

      Derivative contracts are generally either privately-negotiated OTC
contracts or standard contracts transacted through regulated exchanges. Fair
values of futures contracts are not included above due to cash margining
requirements of regulated exchanges. Monthly averages are used in the table
above.

End-User Derivative Financial Instruments

The Corporation, as an end user, utilizes various types of derivative products
(principally interest rate and currency swaps) to manage the interest rate,
currency and other market risks associated with certain liabilities such as
interest-bearing deposits, short-term borrowings and long-term debt, as well as
loans and other assets. Revenue or expense pertaining to management of interest
rate exposure is predominantly recognized over the life of the contract as an
adjustment to interest revenue or expense.

      When the Corporation issues liabilities at fixed interest rates it
subjects itself to risk as market interest rates change. This risk is managed by
entering into interest rate contracts which change the fixed rate cash flows
into variable rate cash flows.

      When the Corporation purchases foreign currency denominated assets or
issues foreign currency denominated debt, it subjects itself to risk as exchange
rates move. This risk is managed by entering into currency swaps and forwards.

      The fair values and other information related to end-user derivatives are
disclosed in Note 26.

Notional Amounts of Trading and End-User Derivative Financial Instruments

Notional amounts indicate the extent of the Corporation's involvement in the
various types and uses of derivative financial instruments and do not measure
the Corporation's exposure to credit or market risks and do not necessarily
represent the amounts exchanged by the parties to the instruments. The amounts
exchanged are based on the contractual notional amounts and the other terms of
the instruments. Notional amounts are not included in the consolidated balance
sheet and generally exceed the future cash requirements relating to the
instruments. The leveraging


                               Bankers Trust Corporation and its Subsidiaries 49
<PAGE>

--------------------------------------------------------------------------------

effects of leveraged derivative transactions are reflected in the table below.

<TABLE>
<CAPTION>
Notional Amounts
(in millions)                             December 31, 1999            December 31, 1998
-----------------------------------------------------------------------------------------
                                                      End                           End
                                       Trading       User(1)        Trading       User(1)
-----------------------------------------------------------------------------------------
<S>                                    <C>           <C>          <C>             <C>
Interest rate contracts
Swaps                                  $172,778      $38,404      $1,079,450      $94,041
Futures                                      --           --         110,995           --
Forwards                                  4,151           --          84,741          600
Options purchased
  Exchange traded                            --           --          22,362           --
  OTC                                    29,068           13         135,671          146
Options written
  Exchange traded                            --           --          15,873           --
  OTC                                    18,378           --         122,497           --
-----------------------------------------------------------------------------------------
Total                                  $224,375      $38,417      $1,571,589      $94,787
=========================================================================================
Foreign exchange rate contracts
Spot, forwards, futures                $  2,309      $     4      $  647,221      $ 5,063
Swaps                                    15,351        2,736          67,059        4,425
OTC options purchased                     8,990           --          38,179           --
OTC options written                       8,792           --          37,932           --
-----------------------------------------------------------------------------------------
Total                                  $ 35,442      $ 2,740      $  790,391      $ 9,488
=========================================================================================
Equity derivative contracts
Swaps                                  $  3,134           --      $    5,851           --
Futures and forwards                        470           --           5,026           --
Options purchased
  Exchange traded                            --           --          10,124           --
  OTC                                     3,899           --          31,035           --
Options written
  Exchange traded                            --           --           8,164           --
  OTC                                     1,493           --          14,354           --
-----------------------------------------------------------------------------------------
Total                                  $  8,996      $    --      $   74,554           --
=========================================================================================
Commodity and other contracts (2)
Swaps                                  $  9,693      $    --      $    4,974           --
Futures                                      --           --             534           --
Forwards                                     --           --             843           --
Options purchased
  Exchange traded                            --           --              81           --
  OTC                                     1,815           --           2,666           --
Options written
  Exchange traded                            --           --             264           --
  OTC                                     1,749           --           2,596           --
-----------------------------------------------------------------------------------------
Total                                  $ 13,257      $    --      $   11,958           --
=========================================================================================
</TABLE>

(1)   These are hedges of loans, other assets, interest-bearing deposits, other
      short-term borrowings and long-term debt.

(2)   Excluded from the notional amounts above were benefit-responsive contracts
      reflecting actuarial-related risk, minimal market risk and no credit risk,
      for which the notional values totaled $7.6 billion and $11.0 billion at
      December 31, 1999 and 1998, respectively.

Swaps

Interest rate swap contracts generally represent the contractual exchange of
fixed and floating rate payments of a single currency, based on a notional
amount and an interest reference rate. Cross-currency interest rate swap
contracts generally involve the exchange of payments which are based on the
interest reference rates availa ble at the inception of the contract on two
different currency principal balances that are exchanged. The principal balances
are re-exchanged at an agreed upon rate at a specified future date. Equity swap
contracts typically involve the payment of an amount equal to the total return
of a U.S. or international equity index, basket of equities, or an individual
equity over a fixed time period in exchange for receiving a floating interest
rate, both based upon the same notional amount.

Futures and Forwards

Futures and forward contracts represent commitments to purchase or sell
securities, money market instruments, foreign currencies or commodities at a
future date and at a specified price. Futures contracts are traded on regulated
U.S. and international exchanges. The Corporation intends to close out most open
positions in futures contracts prior to maturity; therefore future cash receipts
or payments are generally limited to the change in fair value of the underlying
instruments. Since futures contracts generally entail daily net cash margining
with regulated exchanges, the credit risk is generally minimized to a one-day
receivable. Included in this category of contracts are spot foreign currency
contracts, cash-settled index contracts, and forward rate agreements (agreements
to exchange amounts at a specified future date for interest rate differentials
between an agreed interest rate and a reference rate, computed on a notional
amount).

Options

Option contracts are either deliverable or cash-settled. Deliverable contracts
convey to the purchaser (holder) the right to buy (call) or sell (put)
securities, money market instruments, foreign currencies or commodities at or
before a specified date for a contracted price from the seller (writer) of the
contract. Cash-settled contracts convey to the purchaser the right to the
monetary equivalent of the increase (call) or decrease (put), or a percentage
thereof, in a specified reference rate or index, computed on a notional amount,
from the writer. The initial price of an option contract is equal to the premium
paid by the purchaser and is significantly less than the contract or notional
amount. Included in these contracts are: (i) interest rate caps, floors and
collars, which are agreements to make periodic payments for interest rate
differentials between an agreed upon interest rate and a reference rate and (ii)
purchased options to enter into future (or cancel existing) interest rate swap
contracts ("swap options").

      The Corporation is subject to credit risk as a purchaser of an option
contract, and is subject to market risk to the extent of the purchase price of
the option. The Corporation is subject to market risk on its written option
contracts, but not to credit risk since the customer has already performed
according to the terms of the contract by paying a cash premium up front.

Financial Instruments with Off-Balance Sheet Credit Risk

As required by SFAS 105, off-balance sheet credit risk amounts are determined
without consideration of the value of any related collateral and reflect the
total potential loss on commitments to purchase securities for all obligors
(including governments); securities lending indemnifications; and undrawn
commitments, standby letters of credit and similar arrangements.


50 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

Securities and Money Market Activities

(in millions)                      December 31, 1999        December 31, 1998
--------------------------------------------------------------------------------
                                Contract    Credit Risk    Contract  Credit Risk
                                 Amount        Amount       Amount      Amount
--------------------------------------------------------------------------------
Commitments to purchase(1)      $    57      $    57      $    80      $    80
Securities lending
  indemnifications               37,553       37,553       41,695       41,695
--------------------------------------------------------------------------------

(1)   Includes $57 million and $65 million of forward-dated money market assets
      at December 31, 1999 and 1998, respectively.

      Securities lending indemnifications represent the market value of
customers' securities lent to third parties. The Corporation indemnifies
customers to the extent of the replacement cost and/or the market value of the
securities in the event of a failure by a third party to return the securities
lent. The market value of collateral, primarily cash, received for customers'
securities lent was in excess of the contract amounts and was approximately $39
billion at December 31, 1999 and $43 billion at December 31, 1998.

Credit-Related Arrangements

(in millions)                      December 31, 1999         December 31, 1998
-------------------------------------------------------------------------------
                                                Credit                    Credit
                                 Contract        Risk       Contract       Risk
                                   Amount       Amount       Amount       Amount
-------------------------------------------------------------------------------
Commitments to
  extend credit(1)                $19,073      $19,073      $19,707      $19,707
Standby letters of credit and
  similar arrangements(2)           4,700        4,700        3,422        3,422
-------------------------------------------------------------------------------

(1)   Includes participations to other entities of approximately $1 billion and
      $2 billion at December 31, 1999 and 1998, respectively. Of the
      non-participated amount, approximately $7 billion and $5 billion expire in
      one year or less at December 31, 1999 and 1998, respectively.

(2)   Includes participations to other entities of approximately $1 billion at
      December 31, 1999 and 1998.

      Commitments to extend credit represent contractual commitments to make
loans and revolving credits. Commitments generally have fixed expiration dates
or other termination clauses and require the payment of a fee. Because
commitments may expire without being drawn upon, the total contract amounts do
not necessarily represent future cash requirements. Included in the amounts
above are unused commitments to extend credit that are related to loans held for
trading purposes.

      Standby letters of credit and similar arrangements ("standbys"), issued
primarily to support corporate obligations, commit the Corporation to make
payments on behalf of customers contingent upon the failure of the customer to
perform under the terms of the contract. Standbys at December 31, 1999 related
to customer obligations such as commercial paper, medium- and long-term notes
and debentures (including industrial revenue obligations), as well as other
financial and performance-related obligations. At December 31, 1999, $3.380
billion will expire within one year, $1.027 billion from one to four years and
$293 million after four years.

      For standbys, commitments to extend credit and securities lending
indemnifications, the credit risk amount represents the contractual amount.
Standbys and commitments to extend credit would have market risk if issued or
extended at a fixed rate of interest. However, these contracts are primarily
made at a floating rate. Fees received are generally recognized as revenue over
the life of the commitment.

Note 25 -- Concentrations of Credit Risk

The Corporation, as required by SFAS 105, has identified two significant
concentrations of credit risk: OECD country banks and OECD country central
governments, their agencies and central banks. Together they represented 27
percent and 37 percent of total credit risk (after exclusion of securities
lending indemnifications for customers) at December 31, 1999 and 1998,
respectively. The Organization for Economic Cooperation and Development (OECD)
is an international organization of countries which are committed to
market-oriented economic policies, including the promotion of private enterprise
and free market prices, liberal trade policies, and the absence of exchange
controls. The OECD consists of 29 industrialized countries that are located
primarily in Western Europe and North America, as well as Australia, Japan, New
Zealand and South Korea. For regulatory capital purposes, domestic and foreign
bank regulators generally assign OECD country central governments, their
agencies and their central banks a credit risk weighting of zero percent, which
means that no credit risk capital is required to support their financial
instruments. OECD country banks are assigned the next lowest credit risk
weighting (20 percent) by these regulators. The largest counterparty
concentration was the U.S. government and its related entities, which comprised
approximately 89 percent of the OECD country governments category. Within all
other counterparties, approximately 43 percent was collateralized by cash and
U.S. government securities.

      The following table reflects the aggregate credit risk by groups of
counterparties, as defined by SFAS 105, relating to on- and off-balance sheet
financial instruments, including derivatives, at December 31, 1999 and 1998.


                               Bankers Trust Corporation and its Subsidiaries 51
<PAGE>

--------------------------------------------------------------------------------

Credit Risk

                                            On-Balance   Off-Balance
(in millions)                                  Sheet        Sheet          Total
--------------------------------------------------------------------------------
1999
--------------------------------------------------------------------------------
Significant concentrations(1)
  OECD country banks                         $ 12,767      $ 3,541      $ 16,308
  OECD country governments                      4,975           --         4,975
--------------------------------------------------------------------------------
Total significant concentrations               17,742        3,541        21,283
All other(3)                                   36,345       57,842        94,187
--------------------------------------------------------------------------------
Total                                        $ 54,087      $61,383      $115,470
================================================================================
1998
--------------------------------------------------------------------------------
Significant concentrations(1)
  OECD country banks(2)                      $ 36,584      $ 3,019      $ 39,603
  OECD country governments                     12,277          416        12,693
--------------------------------------------------------------------------------
Total significant concentrations               48,861        3,435        52,296
All other(3)                                   70,096       61,960       132,056
--------------------------------------------------------------------------------
Total                                        $118,957      $65,395      $184,352
================================================================================

(1)   For these purposes, Poland has been excluded from the OECD categories.

(2)   Included in the on-balance sheet component of this category was
      approximately $2 billion at December 31, 1998 that was collateralized by
      U.S. government securities.

(3)   The "all other" category of credit risk is diversified with respect to
      type of obligor and counterparty. Included in the on-balance sheet
      component of this category was approximately $5 billion and $13 billion at
      December 31, 1999 and 1998, respectively, that was collateralized by cash
      and U.S. government securities. Included in the off-balance sheet
      component of this category at December 31, 1999 was approximately $36
      billion that was collateralized by cash and U.S. government securities and
      approximately $18 billion of unused commitments to extend credit,
      approximately $7 billion of which expire in one year or less. The
      corresponding amounts for December 31, 1998 were $42 billion, $19 billion
      and $7 billion, respectively.

Note 26 -- Fair Value of Financial Instruments

SFAS 107, "Disclosures about Fair Value of Financial Instruments," requires the
disclosure of fair value information about financial instruments, whether or not
recognized in the balance sheet, for which it is practicable to estimate that
value. Quoted market prices, when available, are used as the measure of fair
value. In cases where quoted market prices are not available, fair values are
based on present value estimates or other valuation techniques. These derived
fair values are significantly affected by assumptions used, principally the
timing of future cash flows and the discount rate. Because assumptions are
inherently subjective in nature, the estimated fair values cannot be
substantiated by comparison to independent market quotes and, in many cases, the
estimated fair values would not necessarily be realized in an immediate sale or
settlement of the instrument. The disclosure requirements of SFAS 107 exclude
certain financial instruments and all nonfinancial instruments (e.g., franchise
value of businesses). Accordingly, the aggregate fair value amounts presented do
not represent management's estimation of the underlying value of the
Corporation.

      The disclosures distinguish between financial instruments held for trading
purposes, measured at fair value with gains and losses recognized in earnings,
and financial instruments held or issued for purposes other than trading. The
fair value of derivative financial instruments must be disclosed separately from
nonderivative financial instruments. Additionally, the fair value of derivative
financial instruments may not be netted with the fair value of other derivative
financial instruments, except as allowed by FIN 39.


52 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

The following are the estimated fair values of the Corporation's financial
instruments followed by a general description of the methods and assumptions
used to estimate such fair values.

<TABLE>
<CAPTION>
Fair Value of Financial Instruments
------------------------------------------------------------------------------------------------------------------------------------
                                                                           Underlying      Effect of                 Fair Value Over
                                                             Book             Fair          End-User      Total          (Under)
(in millions) December 31, 1999                              Value            Value        Derivative   Fair Value      Book Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>              <C>            <C>          <C>               <C>
Financial Assets, Including Hedges
Cash and due from banks                                     $ 3,212          $ 3,212        $  --        $  3,212          $  --
Interest-bearing deposits with banks                          4,693            4,693           --           4,693             --
Federal funds sold                                            2,472            2,472           --           2,472             --
Securities purchased under resale agreements                  6,764            6,766           --           6,766              2
Securities borrowed                                              --               --           --              --             --
Trading assets (see Notes 3 and 24)                          19,017           19,017           --          19,017             --
Securities available for sale (see Note 4)                    3,252            3,114          138           3,252             --
Loans (excluding leases), commitments to
  extend credit and standby letters of credit, net           18,602           18,813           (3)         18,810            208
Customer receivables                                            306              306           --             306             --
Due from customers on acceptances                               262              262           --             262             --
Accounts receivable and accrued interest                      2,307            2,307           --           2,307             --
Other financial assets                                        3,030            3,175           --           3,175            145
Financial Liabilities, Including Hedges
Noninterest-bearing deposits                                  4,989            4,989           --           4,989             --
Interest-bearing deposits                                    18,480           18,217          171          18,388            (92)
Trading liabilities (see Notes 3 and 24)                      5,266            5,266           --           5,266             --
Securities loaned and securities sold
  under repurchase agreements                                    56               56           --              56             --
Other short-term borrowings                                  11,540           11,542           --          11,542              2
Acceptances outstanding                                         266              266           --             266             --
Other financial liabilities                                   5,208            5,208           --           5,208             --
Long-term debt*                                              16,434           16,329          109          16,438              4
Net investments in foreign subsidiaries                          --               --           --              --             --

------------------------------------------------------------------------------------------------------------------------------------
(in millions) December 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
Financial Assets, Including Hedges
Cash and due from banks                                     $ 2,837          $ 2,837        $  --        $  2,837          $  --
Interest-bearing deposits with banks                          2,382            2,376           --           2,376             (6)
Federal funds sold                                            2,484            2,484           --           2,484             --
Securities purchased under resale agreements                 17,053           17,074           --          17,074             21
Securities borrowed                                          14,709           14,709           --          14,709             --
Trading assets (see Notes 3 and 24)                          46,170           46,170           --          46,170             --
Securities available for sale (see Note 4)                   12,748           12,814          (66)         12,748             --
Loans (excluding leases), commitments to
  extend credit and standby letters of credit, net           22,142           22,602          (78)         22,524            382
Customer receivables                                          1,524            1,524           --           1,524             --
Due from customers on acceptances                               232              232           --             232             --
Accounts receivable and accrued interest                      3,815            3,815           --           3,815             --
Other financial assets                                        2,532            2,693          (14)          2,679            147
Financial Liabilities, Including Hedges
Noninterest-bearing deposits                                  4,473            4,473           --           4,473             --
Interest-bearing deposits                                    32,861           32,977          (70)         32,907             46
Trading liabilities (see Notes 3 and 24)                     27,253           27,253           --          27,253             --
Securities loaned and securities sold
  under repurchase agreements                                17,420           17,428           --          17,428              8
Other short-term borrowings                                  16,313           16,350           13          16,363             50
Acceptances outstanding                                         232              232           --             232             --
Other financial liabilities                                   6,697            6,679           --           6,679            (18)
Long-term debt*                                              19,423           19,756         (380)         19,376            (47)
Net investments in foreign subsidiaries                          --               --          (15)            (15)           (15)
====================================================================================================================================
</TABLE>

*     Includes trust preferred capital securities.

A discussion of the nature, objectives and strategies for using end-user
derivatives can be found in Note 24.


                               Bankers Trust Corporation and its Subsidiaries 53
<PAGE>

--------------------------------------------------------------------------------

The following table provides the gross unrealized gains and losses for end-user
derivatives. Gross unrealized gains and losses for hedges of securities
available for sale are recognized in the financial statements with the offset as
an adjustment to securities valuation allowance in stockholders' equity. Gross
unrealized gains and losses for hedges of loans, other assets, interest-bearing
deposits, other short-term borrowings, long-term debt and net investments in
foreign subsidiaries are not yet recognized in the financial statements.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                     Net
                                         Securities                         Interest-     Other                  investments
                                          available               Other     bearing     short-term    Long-      in foreign
(in millions) December 31, 1999           for sale     Loans      assets    deposits    borrowings  term debt(1) subsidiaries  Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>        <C>         <C>         <C>         <C>         <C>         <C>
Interest Rate Swaps(2)
  Pay Variable
    Unrealized Gain                        $  --       $ --       $  --       $  44       $   3       $  25       $  --       $  72
    Unrealized (Loss)                         --         (2)         --        (256)         (3)       (171)         --        (432)
------------------------------------------------------------------------------------------------------------------------------------
Pay Variable Net                              --         (2)         --        (212)         --        (146)         --        (360)
------------------------------------------------------------------------------------------------------------------------------------
Pay Fixed
    Unrealized Gain                            1         --          --          58          --           7          --          66
    Unrealized (Loss)                         --         --          --         (17)         --          --          --         (17)
------------------------------------------------------------------------------------------------------------------------------------
Pay Fixed Net                                  1         --          --          41          --           7          --          49
------------------------------------------------------------------------------------------------------------------------------------
  Total Unrealized Gain                        1         --          --         102           3          32          --         138
------------------------------------------------------------------------------------------------------------------------------------
  Total Unrealized (Loss)                     --         (2)         --        (273)         (3)       (171)         --        (449)
------------------------------------------------------------------------------------------------------------------------------------
Total Net                                  $   1       $ (2)      $  --       $(171)      $  --       $(139)      $  --       $(311)
====================================================================================================================================
Forward Rate Agreements
  Unrealized Gain                          $  1        $ --       $  --       $  --       $  --       $  --       $  --       $   1
  Unrealized (Loss)                           --         --          --          --          --          --          --          --
------------------------------------------------------------------------------------------------------------------------------------
  Net                                      $   1       $ --       $  --       $  --       $  --       $  --       $  --       $   1
====================================================================================================================================
Currency Swaps and Forwards
  Unrealized Gain                          $ 136       $ --       $  --       $  --       $  --       $  54       $  --       $ 190
  Unrealized (Loss)                           --         (1)         --          --          --         (24)         --         (25)
------------------------------------------------------------------------------------------------------------------------------------
  Net                                      $ 136       $ (1)      $  --       $  --       $  --       $  30       $  --       $ 165
====================================================================================================================================
Other Contracts
  Unrealized Gain                          $  --       $ --       $  --       $  --       $  --       $  --       $  --       $  --
  Unrealized (Loss)                           --         --          --          --          --          --          --          --
------------------------------------------------------------------------------------------------------------------------------------
  Net                                      $  --       $ --       $  --       $  --       $  --       $  --       $  --       $  --
====================================================================================================================================
Total Unrealized Gain                      $ 138       $ --       $  --       $ 102       $   3       $  86       $  --       $ 329
Total Unrealized (Loss)                       --         (3)         --        (273)         (3)       (195)         --        (474)
------------------------------------------------------------------------------------------------------------------------------------
Total Net                                  $ 138       $ (3)      $  --       $(171)      $  --       $(109)      $  --       $(145)
====================================================================================================================================
(in millions) December 31, 1998
------------------------------------------------------------------------------------------------------------------------------------
Interest Rate Swaps(2)
  Pay Variable
    Unrealized Gain                        $  64       $  8       $  --       $ 149       $  17       $ 471       $  --       $ 709
    Unrealized (Loss)                         (3)        (7)         --         (13)        (14)        (55)         --         (92)
------------------------------------------------------------------------------------------------------------------------------------
Pay Variable Net                              61          1          --         136           3         416          --         617
------------------------------------------------------------------------------------------------------------------------------------
Pay Fixed
    Unrealized Gain                            6         --          --           3          --           7          --          16
    Unrealized (Loss)                       (129)       (76)        (13)        (70)        (16)        (30)         --        (334)
------------------------------------------------------------------------------------------------------------------------------------
Pay Fixed Net                               (123)       (76)        (13)        (67)        (16)        (23)         --        (318)
------------------------------------------------------------------------------------------------------------------------------------
  Total Unrealized Gain                       70          8          --         152          17         478          --         725
------------------------------------------------------------------------------------------------------------------------------------
  Total Unrealized (Loss)                   (132)       (83)        (13)        (83)        (30)        (85)         --        (426)
------------------------------------------------------------------------------------------------------------------------------------
Total Net                                  $ (62)      $(75)      $ (13)      $  69       $ (13)      $ 393       $  --       $ 299
====================================================================================================================================
Forward Rate Agreements
  Unrealized Gain                          $  --       $ --       $  --       $  --       $  --       $  --       $  --       $  --
  Unrealized (Loss)                           --         --          --          --          --          --          --          --
------------------------------------------------------------------------------------------------------------------------------------
  Net                                      $  --       $ --       $  --       $  --       $  --       $  --       $  --       $  --
====================================================================================================================================
Currency Swaps and Forwards
  Unrealized Gain                          $   6       $ --       $  --       $   5       $   1       $  76       $  19       $ 107
  Unrealized (Loss)                           (7)        (3)         (1)         (4)         (1)        (89)        (34)       (139)
------------------------------------------------------------------------------------------------------------------------------------
  Net                                      $  (1)      $ (3)      $  (1)      $   1       $  --       $ (13)      $ (15)      $ (32)
====================================================================================================================================
Other Contracts
  Unrealized Gain                          $  --       $ --       $  --       $  --       $  --       $  --       $  --       $  --
  Unrealized (Loss)                           (3)        --          --          --          --          --          --          (3)
------------------------------------------------------------------------------------------------------------------------------------
  Net                                      $  (3)      $ --       $  --       $  --       $  --       $  --       $  --       $  (3)
====================================================================================================================================
Total Unrealized Gain                      $  76       $  8       $  --       $ 157       $  18       $ 554       $  19       $ 832
Total Unrealized (Loss)                     (142)       (86)        (14)        (87)        (31)       (174)        (34)       (568)
------------------------------------------------------------------------------------------------------------------------------------
Total Net                                  $ (66)      $(78)      $ (14)      $  70       $ (13)      $ 380       $ (15)      $ 264
====================================================================================================================================
</TABLE>

(1)   Includes trust preferred capital securities

(2)   Includes swaps with embedded options to cancel.


54 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

      The unrealized gains and losses on these hedges were determined on the
basis of valuation pricing models which take into account current market and
contractual prices of the underlying instruments, as well as time value and
yield curve or volatility factors underlying the positions.

      The remaining maturities of the notional amounts of end-user derivatives
at December 31, 1999 and December 31, 1998 were as follows:

December 31, 1999                    Interest      Foreign                 Total
(in millions)                          Rate       Currency     Equity   Notional
Notional Amount Maturing In:           Risk         Risk*       Risk      Amount
--------------------------------------------------------------------------------
2000                                  $26,641      $1,956      $ --      $28,597
2001-2002                               3,518         628        --        4,146
2003-2004                               1,470          57        --        1,527
2005 and thereafter                     6,788          99        --        6,887
--------------------------------------------------------------------------------
Total                                 $38,417      $2,740      $ --      $41,157
================================================================================

December 31, 1998                    Interest     Foreign                 Total
(in millions)                          Rate      Currency    Equity     Notional
Notional Amount Maturing In:           Risk        Risk*      Risk       Amount
--------------------------------------------------------------------------------
1999                                 $64,930      $4,579      $ --      $ 69,509
2000-2001                             13,078       4,213        --        17,291
2002-2003                              6,588         384        --         6,972
2004 and thereafter                   10,191         312        --        10,503
--------------------------------------------------------------------------------
Total                                $94,787      $9,488      $ --      $104,275
================================================================================

* Currency swaps and currency forwards are primarily based upon EURO/U.S. dollar
contracts.

      For pay variable and pay fixed interest rate swaps entered into as an end
user, the weighted average receive rate and pay rate (interest rates were based
on the weighted averages of both U.S. and non-U.S. currencies) by maturity and
corresponding notional amounts at December 31, 1999 and December 31, 1998 were
as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                 Paying Variable                             Paying Fixed
December 31, 1999                                ---------------                             ------------
(in millions)                      Notional          Receive          Pay       Notional        Receive           Pay         Total
Notional Amount Maturing In:        Amount            Rate            Rate       Amount           Rate            Rate      Notional
------------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>               <C>             <C>        <C>              <C>             <C>        <C>
2000                                $23,569           5.79%           5.78%      $3,066           6.09%           5.82%      $26,635
2001-2002                             3,194           6.45            5.96          316           6.46            6.16         3,510
2003-2004                             1,301           6.26            5.98          168           6.33            6.23         1,469
2005 and thereafter                   6,240           6.36            6.26          550           6.24            6.24         6,790
------------------------------------------------------------------------------------------------------------------------------------
Total                               $34,304                                      $4,100                                      $38,404
====================================================================================================================================
</TABLE>

All rates were those in effect at December 31, 1999. Variable rates are
primarily based on LIBOR or Federal funds rate and may change significantly,
affecting future cash flows.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                               Paying Variable                               Paying Fixed
December 31, 1998                              ---------------                               ------------
(in millions)                    Notional         Recieve            Pay      Notional         Receive            Pay        Total
Notional Amount Maturing In:      Amount            Rate             Rate      Amount            Rate             Rate      Notional
------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                <C>              <C>      <C>                <C>              <C>        <C>
1999                             $55,494            5.37%            5.18%    $ 8,704            5.34%            5.54%      $64,198
2000-2001                          9,802            5.63             5.32       3,266            4.94             6.49        13,068
2002-2003                          5,601            5.48             4.51         983            4.15             5.04         6,584
2004 and thereafter                8,071            6.49             4.90       2,120            5.28             6.34        10,191
------------------------------------------------------------------------------------------------------------------------------------
Total                            $78,968                                      $15,073                                        $94,041
====================================================================================================================================
</TABLE>

All rates were those in effect at December 31, 1998. Variable rates are
primarily based on LIBOR and may change significantly, affecting future cash
flows.

      The effect of these end-user derivatives was a net increase in revenue of
$206 million for the year ended December 31, 1999 and a net increase in revenue
of $175 million for the year ended December 31, 1998.

      The Corporation has reviewed its other categories of off-balance sheet
instruments (forward-dated assets and liabilities, securities lending
indemnifications and securities borrowed) accounted for at cost and has
determined that, in the case of each such category, the unrealized gain or loss
on such instruments at both December 31, 1999 and 1998 was not material.

Methods and Assumptions

      For short-term financial instruments, defined as those with remaining
maturities of 90 days or less, the carrying amount was considered to be a
reasonable estimate of fair value. The following instruments were predominantly
short-term:

Assets                              Liabilities
--------------------------------------------------------------------------------
Cash and due from banks             Interest-bearing deposits
Interest-bearing deposits           Securities loaned and securities
  with banks                           sold under repurchase agreements
Federal funds sold                  Other short-term borrowings
Securities purchased under          Acceptances outstanding
  resale agreements                 Other financial liabilities
Securities borrowed
Customer receivables
Due from customers
  on acceptances
Accounts receivable and
  accrued interest

      For those components of the above-listed financial instruments with
remaining maturities greater than 90 days, fair value was determined by
discounting contractual cash flows using rates which could be earned for assets
with similar remaining maturities and, in the case of liabilities, rates at
which the liabilities with similar remaining maturities could be issued as of
the balance sheet date.


                               Bankers Trust Corporation and its Subsidiaries 54
<PAGE>

--------------------------------------------------------------------------------

      As indicated in Note 2, trading assets (including derivatives), trading
liabilities and securities available for sale are carried at their fair values.

      For short-term loans and variable rate loans which reprice within 90 days,
the carrying value was considered to be a reasonable estimate of fair value. For
those loans for which quoted market prices were available, fair value was based
on such prices. For other types of loans, fair value was estimated by
discounting future cash flows using the current rates at which similar loans
would be made to borrowers with similar credit ratings and for the same
remaining maturities. In addition, for loans secured by real estate, appraisal
values for the collateral were considered in the fair value determination. The
fair value estimate of commitments to extend credit and standby letters of
credit represented the unrealized gains and losses on those off-balance sheet
positions and was generally determined in the same manner as loans.

      Other financial assets consisted primarily of investments in equity
instruments (excluding, in accordance with SFAS 107, investments accounted for
under the equity method) and cash and cash margins with brokers. The fair value
of non-marketable equity instruments was determined by matrix pricing utilizing
market prices for comparable publicly traded instruments, adjusted for liquidity
and contractual arrangements.

      Noninterest-bearing deposits do not have defined maturities. In accordance
with SFAS 107, fair value represented the amount payable on demand as of the
balance sheet date.

      Other financial liabilities consisted primarily of accounts payable and
accrued expenses at both December 31, 1999 and 1998.

      The fair value of long-term debt was estimated by using market quotes as
well as discounting the remaining contractual cash flows using a rate at which
the Corporation could issue debt with a similar remaining maturity as of the
balance sheet date.

Note 27 -- Condensed Bankers Trust Financial Statements

<TABLE>
<CAPTION>
Condensed Statement of Income
(in millions) Year Ended December 31,                1999          1998          1997
--------------------------------------------------------------------------------------
<S>                                               <C>           <C>           <C>
Revenue
Dividends
  Banks                                           $    --       $   502       $    93
  Nonbanks                                            118           537           404
Interest from subsidiaries                            498           816           615
Other interest                                        118           314           275
Trading                                              (205)         (535)         (103)
Securities available for sale gains (losses)           --            39            45
Other                                                (154)           40            80
--------------------------------------------------------------------------------------
Total revenue                                         375         1,713         1,409
--------------------------------------------------------------------------------------
Expenses
Interest to subsidiaries                              253           362           217
Other interest                                        696         1,017           834
Other                                                 271           175           216
--------------------------------------------------------------------------------------
Total expenses                                      1,220         1,554         1,267
--------------------------------------------------------------------------------------
Income before income taxes and
  equity in undistributed income
  of subsidiaries and affiliates                     (845)          159           142
Income taxes (benefit)                               (409)         (465)         (222)
Income before equity in undistributed
  income of subsidiaries and affiliates              (436)          624           364
Equity in undistributed (loss) income
  of subsidiaries and affiliates                   (1,167)         (697)          502
--------------------------------------------------------------------------------------
Net Income (Loss)                                 $(1,603)      $   (73)      $   866
======================================================================================
</TABLE>

Condensed Balance Sheet
(in millions) December 31,                                   1999          1998
--------------------------------------------------------------------------------
Assets
Cash and due from banks                                    $     3       $    29
Interest-bearing deposits with bank subsidiaries             3,219         3,237
Securities purchased under resale agreements
  with nonbank subsidiary                                       --             2
Trading assets                                                 187           957
Securities available for sale                                    4         2,180
Loans                                                          153            76
Investments in subsidiaries and affiliates
  Banks                                                      5,840         6,501
  Nonbanks                                                   1,387         1,848
Receivables from subsidiaries and affiliates
  Banks                                                        468         1,520
  Nonbanks                                                   9,320        10,191
Accounts receivable and accrued interest                       215           308
Other assets                                                 1,336           594
--------------------------------------------------------------------------------
Total assets                                               $22,132       $27,443
================================================================================
Liabilities and Stockholders' Equity
Trading liabilities                                        $    29       $    72
Commercial paper                                                --         3,411
Other short-term borrowings                                  4,806         5,057
Payables to subsidiaries and affiliates
  Banks                                                         51           326
  Nonbanks                                                   5,977         5,505
Other liabilities                                              296           461
Long-term debt                                               6,623         7,915
--------------------------------------------------------------------------------
Total liabilities                                           17,782        22,747
--------------------------------------------------------------------------------
Total stockholders' equity                                   4,350         4,696
--------------------------------------------------------------------------------
Total liabilities and stockholders' equity                 $22,132       $27,443
================================================================================


56 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Condensed Statement of Cash Flows
(in millions) Year Ended December 31,                     1999           1998          1997
--------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>           <C>
Cash Flows From Operating Activities
Net income (loss)                                       $(1,603)      $   (73)      $   866
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
  operating activities:
    Equity in undistributed loss
      (income) of subsidiaries and affiliates             1,167           697          (502)
    Deferred income taxes                                  (235)         (165)          (82)
    Net change in trading assets                            770         4,816        (2,964)
    Net change in trading liabilities                       (43)         (240)         (166)
    Securities available for sale
      (gains) losses                                         --           (39)          (45)
    Other, net                                             (375)          (29)         (632)
--------------------------------------------------------------------------------------------
Net cash provided by (used in)
  operating activities                                     (319)        4,967        (3,525)
--------------------------------------------------------------------------------------------
Cash Flows From Investing Activities
Net change in:
  Interest-bearing deposits with
    bank subsidiaries                                        17        (1,033)        1,093
  Securities purchased under resale agreements
    with nonbank subsidiary                                 (17)         (475)         (209)
  Short-term notes receivable from
    subsidiaries and affiliates                             737         2,304        (1,255)
Securities available for sale:
  Purchases                                                (434)       (5,627)         (650)
  Maturities and other redemptions                          161           268           345
  Sales                                                   2,431         4,924           158
Increases in long-term notes receivable
  from subsidiaries                                      (1,440)       (9,843)       (2,301)
Decreases in long-term notes receivable
  from subsidiaries                                       2,196         7,607         1,037
Capital contributed to subsidiaries and affiliates         (501)       (1,158)         (688)
Return of capital from subsidiaries and affiliates          884            25           300
Other, net                                                  (78)           90            75
--------------------------------------------------------------------------------------------
Net cash provided by (used in) investing
  activities                                              3,956        (2,918)       (2,095)
--------------------------------------------------------------------------------------------
Cash Flows From Financing Activities
Net change in:
  Commercial paper and other
    short-term borrowings                                (3,663)       (1,609)        2,449
  Short-term notes payable to subsidiaries                  216          (618)        2,326
Issuance of long-term notes payable
  to subsidiaries                                           (10)           (1)          770
Issuance of long-term debt                                   --         2,078         2,387
Repayments of long-term debt                             (1,326)         (792)         (913)
Redemption/repurchase of preferred stock                    (18)         (264)         (152)
Purchases of treasury stock                                 (71)         (618)       (1,038)
Cash dividends paid                                        (216)         (421)         (384)
Capital contribution from Taunus                          1,400            --            --
Other, net                                                   25           128           248
--------------------------------------------------------------------------------------------
Net cash (used in) provided by
  financing activities                                   (3,663)       (2,117)        5,693
--------------------------------------------------------------------------------------------
Net Increase (Decrease) In Cash and
  Due From Bank s                                           (26)          (68)           73
Cash and due from banks, beginning of year                   29            97            24
--------------------------------------------------------------------------------------------
Cash and due from banks, end of year                    $     3       $    29       $    97
============================================================================================
Interest paid                                           $   975       $ 1,388       $ 1,007
============================================================================================
Income taxes paid                                       $    15       $    81       $   131
============================================================================================
Noncash financing activity:
  Conversion of debt to equity                          $    --       $    15       $    63
============================================================================================
</TABLE>

Note 28 -- Bankers Trust Company Consolidated Summarized Financial Information

<TABLE>
<CAPTION>
Consolidated Statement of Income
(in millions) Year Ended December 31,               1999          1998          1997
------------------------------------------------------------------------------------
<S>                                               <C>           <C>           <C>
Net Interest Revenue
Interest revenue                                  $ 3,399       $ 5,727       $5,287
Interest expense                                    2,429         4,371        4,070
------------------------------------------------------------------------------------
Net Interest Revenue                                  970         1,356        1,217
Provision for credit losses--loans                    (41)           40           --
------------------------------------------------------------------------------------
Net Interest Revenue After Provision
  For Credit Losses-- Loans                         1,011         1,316        1,217
------------------------------------------------------------------------------------
Noninterest Revenue
Trading                                               (50)           --          584
Fiduciary and funds management                        882           919          886
Corporate finance fees                                292           473          354
Other fees and commissions                            383           480          299
Securities available for sale gains (losses)         (153)         (141)          28
Other                                               1,294           427          415
------------------------------------------------------------------------------------
Total noninterest revenue                           2,648         2,158        2,566
------------------------------------------------------------------------------------
Noninterest Expenses
Salaries and commissions                              788           947          812
Incentive compensation and
  employee benefits*                                1,451           950        1,004
Agency and other professional service fees            363           549          357
Communication and data services                       155           164          153
Occupancy, net                                        178           183          149
Furniture and equipment                               197           213          185
Travel and entertainment                               76           112           94
Other                                                 347           393          396
Restructuring and other related activities            606            --            4
------------------------------------------------------------------------------------
Total noninterest expenses                          4,161         3,511        3,154
------------------------------------------------------------------------------------
Income (loss) before income taxes                    (502)          (37)         629
Income taxes                                          579            41          182
------------------------------------------------------------------------------------
Net Income (Loss)                                 $(1,081)      $   (78)      $  447
====================================================================================
</TABLE>

*Includes change-of-control related costs.

      In the normal course of business, BTCo enters into various transactions
with Bankers Trust and Bankers Trust's other subsidiaries. Included in the above
financial statements were the following transactions and balances with such
affiliates.

(in millions) Year Ended December 31,            1999          1998        1997
--------------------------------------------------------------------------------
Interest revenue                               $  246        $   824       $349
Interest expense                                  213            346        239
Noninterest revenue                               500            343        326
Noninterest expenses                              151            321        285

(in millions) December 31,                                     1999       1998
--------------------------------------------------------------------------------
Interest-earning assets                                      $    93    $11,370
Noninterest-earning assets                                       313        706
Interest-bearing liabilities                                   3,785      7,286
Noninterest-bearing liabilities                                  616      1,602


                               Bankers Trust Corporation and its Subsidiaries 57
<PAGE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Consolidated Balance Sheet
($ in millions, except par values) December 31,                         1999           1998
---------------------------------------------------------------------------------------------
<S>                                                                  <C>            <C>
Assets
Cash and due from banks                                              $  3,205       $   2,772
Interest-bearing deposits with banks                                    1,850           2,423
Federal funds sold                                                      2,545           2,484
Securities purchased under resale agreements                            6,694          11,374
Securities borrowed                                                        --           8,994
Trading assets                                                         12,551          39,982
Securities available for sale                                           3,017           8,564
Loans, net of allowance for credit losses of $477
   at December 31, 1999 and $620 at December 31, 1998                  17,014          21,262
Due from customers on acceptances                                         262             232
Accounts receivable and accrued interest                                1,233           2,648
Other assets                                                            2,785           3,823
---------------------------------------------------------------------------------------------
Total assets                                                         $ 51,156       $ 104,558
=============================================================================================
Liabilities
Noninterest-bearing deposits
  Domestic offices                                                   $  2,815       $   3,124
  Foreign offices                                                       2,404           1,781
Interest-bearing deposits
  Domestic offices                                                     10,719          17,285
  Foreign offices                                                      10,351          18,386
---------------------------------------------------------------------------------------------
      Total deposits                                                   26,289          40,576
Trading liabilities                                                     2,950          26,175
Securities loaned and securities sold under
  repurchase agreements                                                    50           9,667
Other short-term borrowings                                             7,162           7,867
Acceptances outstanding                                                   266             232
Accounts payable and accrued expenses                                   2,396           2,862
Other liabilities, including allowance for credit
  losses of $24 at December 31, 1999 and $18
  at December 31, 1998                                                  2,243           2,616
Long-term debt not included in risk-based capital                       3,192           6,594
Long-term debt included in risk-based capital                             174             846
Mandatorily redeemable capital securities of subsidiary
  trust holding solely junior subordinated deferrable
  interest debentures included in risk-based capital                      245             244
---------------------------------------------------------------------------------------------
Total liabilities                                                      44,967          97,679
---------------------------------------------------------------------------------------------
Stockholders' Equity
Floating rate non-cumulative preferred stock--
  Series A, $1 million par value
  Authorized, issued and outstanding:
    1999, 1,500 shares; 1998, 1,500 shares                              1,500           1,500
Common stock, $10 par value Authorized, issued and outstanding:
    1999, 212,730,867 shares; 1998, 212,730,867 shares                  2,127           2,127
Capital surplus                                                           542             541
Retained earnings                                                       2,055           3,136
Accumulated other comprehensive income:
  Net unrealized gains (losses) on securities available
    for sale, net of taxes                                                 (2)            (36)
  Foreign currency translation, net of taxes                              (33)           (389)
---------------------------------------------------------------------------------------------
Total stockholders' equity                                              6,189           6,879
---------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                           $ 51,156       $ 104,558
=============================================================================================
</TABLE>

      See Note 9 for details of BTCo's long-term debt issued to nonaffiliates.

Note 29 -- Related Party Transactions

In conjunction with the Acquisition and subsequent integration of the
Corporation into Deutsche Bank's management structure, the Corporation has
entered into various related party transactions with Deutsche Bank and its
affiliated entities. As previously mentioned, the Corporation transferred BTAB
and substantially all of its interest in BTI to Deutsche Bank entities. This
resulted in approximately $2.5 billion of net assets transferred on June 5,
1999. In addition, the Corporation has transferred at fair market value certain
other entities and financial assets and liabilities to Deutsche Bank entities.
In order to realign the Corporation's businesses with the Deutsche Bank
management structure, the Corporation will continue to transfer other financial
assets and liabilities and entities as necessary.

      In connection with the sale of BTAL to the Principal Financial Group
("Principal"), Deutsche Bank provided various representations and warranties to
Principal.

      Historical BTAB employees (retirees), who were transferred to DBSI,
continue to be covered by the Corporation's trusteed, noncontributory, defined
benefit plan. In addition, the Corporation also provides health care benefits to
these employees (retirees) who met specific age/or service requirements on
January 1, 1990 provided that they retire (retired) under the principal domestic
pension plan with at least ten years of service.

      The Corporation also has related party balances with Deutsche Bank or
affiliated companies. These balances generally include interest-bearing deposits
with banks, securities purchased under resale agreements, securities borrowed,
securities loaned and securities sold under repurchase agreements, other
short-term borrowings, and derivative contracts. These transactions are entered
into in the ordinary course of business.

      Included in the Corporation's financial statements were the following
balances with such affiliates.

(in millions)                                                  December 31, 1999
--------------------------------------------------------------------------------
Interest-earning assets                                                  $10,843
Noninterest-earning assets                                                 1,147
Interest-bearing liabilities                                               6,568
Noninterest-bearing liabilities                                              139


58 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

Note 30 -- Litigation

Pursuant to an agreement (the "Agreement") with the United States Attorney's
Office in the Southern District of New York entered into in 1999, BTCo pleaded
guilty to misstating entries in the bank's books and records, constituting a
criminal violation of Title 18, United States Code, Section 1005 and paid a fine
to federal and state authorities. Although the Agreement concludes the United
States Attorney's Office's investigation of BTCo, BTCo continues to cooperate
with and provide information to the United States Attorney's Office and other
regulatory agencies and authorities, including the Securities and Exchange
Commission ("Commission"), regarding this matter. As a consequence of its guilty
plea, BTCo and/or certain affiliates have received certain exemptions and
continue to seek other exemptions from regulatory agencies and authorities,
including the Commission, to continue to provide certain services to its
clients. Although no assurance can be given that such exemptions will be
granted, the Corporation does not expect further consequences of the Agreement
to be materially adverse to the consolidated financial statements of the
Corporation. Additional information with respect to the foregoing is set forth
in the Corporation's Current Report on Form 8-K filed on March 12, 1999 with the
Commission.

      In addition to the matter described above, various legal actions and
proceedings involving Bankers Trust and various of its subsidiaries are
currently pending. Management, after discussions with counsel, does not
anticipate that losses, if any, resulting from such actions and proceedings
would be material.


                               Bankers Trust Corporation and its Subsidiaries 59
<PAGE>

--------------------------------------------------------------------------------
                          INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------

The Board of Directors and Stockholder of

Bankers Trust Corporation:

We have audited the accompanying consolidated balance sheet of Bankers Trust
Corporation (formerly Bankers Trust New York Corporation) and Subsidiaries (the
"Corporation", a wholly owned indirect subsidiary of Deutsche Bank AG) as of
December 31, 1999 and 1998, and the related consolidated statements of income,
changes in stockholders' equity, comprehensive income and cash flows for each of
the years in the three-year period ended December 31, 1999. These consolidated
financial statements are the responsibility of the Corporation's management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

      In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Bankers Trust Corporation and Subsidiaries as of December 31, 1999 and 1998, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1999, in conformity with generally
accepted accounting principles.


/S/ KPMG LLP
KPMG LLP

New York, New York
February 25, 2000


60 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------
                          SUPPLEMENTAL FINANCIAL DATA
--------------------------------------------------------------------------------

The statistical data on pages 61 through 66 should be read in conjunction with
the Financial Review and the financial statements included elsewhere in this
Annual Report.

      In the opinion of management, all material adjustments necessary for a
fair presentation of the results of operations for the interim periods have been
made.

Condensed Quarterly Consolidated Statement of Income

<TABLE>
<CAPTION>
(in millions, except per share data)
-----------------------------------------------------------------------------------------------------------------------------------
                                                              1999                                          1998
                                           --------------------------------------------  ------------------------------------------
                                           Fourth      Third        Second       First   Fourth      Third       Second     First
                                           Quarter    Quarter       Quarter     Quarter  Quarter    Quarter      Quarter    Quarter
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>       <C>           <C>         <C>       <C>       <C>           <C>       <C>
Interest revenue                            $ 797     $   818       $ 1,293     $1,511    $1,716    $ 2,281       $2,305    $1,989
Interest expense                              641         664         1,057      1,250     1,448      1,945        1,939     1,587
-----------------------------------------------------------------------------------------------------------------------------------
Net interest revenue                          156         154           236        261       268        336          366       402
Provision for credit losses--loans             16         (49)          (25)        --        20         20           --        --
-----------------------------------------------------------------------------------------------------------------------------------
Net interest revenue after
     provision for credit losses--loans       140         203           261        261       248        316          366       402
-----------------------------------------------------------------------------------------------------------------------------------
Total noninterest revenue                     815       1,428             8      1,249     1,189        155        1,182     1,231
Total noninterest expenses                    867         810         2,802      1,301     1,343      1,178        1,320     1,325
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes              88         821        (2,533)       209        94       (707)         228       308
Income taxes (benefit)                        145         559          (585)        69        65       (219)          64        86
-----------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss)                           $ (57)    $   262       $(1,948)    $  140    $   29    $  (488)      $  164    $  222
===================================================================================================================================
Net income (loss) applicable to
        common stock                          N/A         N/A           N/A     $  134    $   23    $  (494)      $  155    $  211
===================================================================================================================================
Earnings (Loss) Per
     Common Share:(1)
        Basic                                 N/A         N/A           N/A     $ 1.33    $ 0.24    $ (4.98)      $ 1.54    $ 2.08
        Diluted                               N/A         N/A           N/A     $ 1.30    $ 0.23    $ (4.98)      $ 1.46    $ 2.01
===================================================================================================================================
Cash dividends declared per
        common share                          N/A         N/A           N/A     $ 1.00    $ 1.00    $  1.00       $ 1.00    $ 1.00
===================================================================================================================================
</TABLE>

N/A-- Information is not applicable as Deutsche Bank AG acquired all outstanding
      shares of common stock of Bankers Trust Corporation from it shareholders
      at a price of $93.00 per share on June 4, 1999.

(1)   Due to changes in the number of average shares outstanding, quarterly
      earnings per share do not necessarily add to the total for the year ended
      December 31, 1998.

Stockholder Data
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
Market price
<S>                                           <C>         <C>           <C>    <C>        <C>       <C>         <C>        <C>
     High                                     N/A         N/A           N/A    $88 7/8    $87 7/8   $ 123 1/2   $136 7/16  $124 1/4
     Low                                      N/A         N/A           N/A     83 5/8     45          53        109 3/8     99 1/4
     End of quarter                           N/A         N/A           N/A     88 1/4     85 7/16     59        116 1/16   120 5/16
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

N/A-- Information is not applicable as Deutsche Bank AG acquired all outstanding
      shares of common stock of Bankers Trust Corporation from it shareholders
      at a price of $93.00 per share on June 4, 1999. The Corporation is a
      wholly-owned subsidiary of Deutsche Bank AG, as of the date hereof, 1
      share of the Corporation's common stock par value $1 per share, was issued
      and outstanding.

Dividends

Cash dividends on common stock were paid in 1999 on the 25th of January and
April.


                               Bankers Trust Corporation and its Subsidiaries 61
<PAGE>

--------------------------------------------------------------------------------

Average Balances, Interest and Average Rates

The following table shows the major consolidated assets and liabilities,
together with their respective interest amounts and rates earned or paid by the
Corporation. Cash basis and renegotiated loans are included in the averages to
determine an effective yield on all loans. The average balances are principally
daily averages.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
                                                     1999                        1998                         1997
                                           --------------------------   ------------------------    --------------------------
                                           Average            Average   Average          Average    Average            Average
($ in millions)                            Balance  Interest     Rate   Balance Interest    Rate    Balance  Interest     Rate
------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>       <C>    <C>        <C>      <C>    <C>         <C>       <C>
Assets
Interest-bearing deposits with banks
  (primarily in foreign offices)           $ 4,465     $ 309     6.92%  $ 3,316    $ 310    9.35%  $ 4,662     $ 395     8.47%
Federal funds sold
  (in domestic offices)                      3,146       160     5.09%    3,865      211    5.46%    4,758       266     5.59%
Securities purchased under resale
  agreements
    In domestic offices                      8,386       545     6.50%   15,254    1,200    7.87%   14,076       847     6.02%
    In foreign offices                       3,270       130     3.98%    8,175      435    5.32%    9,158       505     5.51%
------------------------------------------------------------            ----------------           -----------------
Total securities purchased
  under resale agreements                   11,656       675     5.79%   23,429    1,635    6.98%   23,234     1,352     5.82%
Securities borrowed
    In domestic offices                      7,254       312     4.30%   21,080    1,096    5.20%   13,128       653     4.97%
    In foreign offices                         691        71    10.27%    2,640      126    4.77%    1,763        93     5.28%
------------------------------------------------------------            ----------------           -----------------
Total securities borrowed                    7,945       383     4.82%   23,720    1,222    5.15%   14,891       746     5.01%
Trading assets
    In domestic offices (1)                  6,118       489     7.99%   10,334      973    9.42%    9,578       850     8.87%
    In foreign offices                       7,006       431     6.15%   19,685    1,423    7.23%   19,449     1,646     8.46%
------------------------------------------------------------            ----------------           -----------------
Total trading assets (1)                    13,124       920     7.01%   30,019    2,396    7.98%   29,027     2,496     8.60%
Securities available for sale
    In domestic offices
        Taxable                              2,398       171     7.13%    6,090      403    6.62%    2,635       206     7.82%
        Exempt from federal
            income taxes (1)                   676        25     3.70%    1,602       56    3.50%    1,076        40     3.72%
    In foreign offices
        Taxable                              3,460       191     5.52%    4,319      230    5.33%    4,011       230     5.73%
        Exempt from federal
            income taxes (1)                    35         8    22.86%       84       10   11.90%       92        10    10.87%
------------------------------------------------------------            ----------------           -----------------
Total securities available for sale (1)      6,569       395     6.01%   12,095      699    5.78%    7,814       486     6.22%
Loans
    In domestic offices
        Commercial and industrial            6,674       492     7.37%    5,182      386    7.45%    4,029       312     7.74%
        Financial institutions               1,467       106     7.23%    1,306       89    6.81%    1,269        92     7.25%
        Secured by real estate               1,344       113     8.41%    1,650      132    8.00%    1,561       131     8.39%
        Other (1)                            4,720       298     6.31%    3,651      230    6.30%    2,577       175     6.79%
------------------------------------------------------------            ----------------           -----------------
        Total in domestic offices (1)       14,205     1,009     7.10%   11,789      837    7.10%    9,436       710     7.52%
    In foreign offices                       7,346       482     6.56%   10,789      844    7.82%    8,923       695     7.79%
------------------------------------------------------------            ----------------           -----------------
Total loans, excluding fees (1)             21,551     1,491     6.92%   22,578    1,681    7.45%   18,359     1,405     7.65%
    Loan fees                                   --        31                 --       30                --        32
------------------------------------------------------------            ----------------           -----------------
Total loans, including fees (1)             21,551     1,522     7.06%   22,578    1,711    7.58%   18,359     1,437     7.83%
------------------------------------------------------------            ----------------           -----------------
Customer receivables
    In domestic offices                        955        70     7.33%    1,628      138    8.48%    1,589       133     8.37%
    In foreign offices                          --        --                 --       --                --        --
------------------------------------------------------------            ----------------           -----------------
Total customer receivables                     955        70     7.33%    1,628      138    8.48%    1,589       133     8.37%
------------------------------------------------------------            ----------------           -----------------
Total Interest-Earning
    Assets(1)                               69,411    $4,434     6.39%  120,650   $8,322    6.90%  104,334    $7,311     7.01%
                                                      ======                      ======                      ======
Cash and due from banks                      2,264                        2,448                      1,496
Noninterest-earning trading assets          15,008                       28,233                     21,712
Due from customers on acceptances              253                          485                        682
All other assets                            10,266                       10,741                      9,058
Allowance for credit losses--loans            (564)                        (686)                      (776)
--------------------------------------------------                     --------                   --------
Total Assets                               $96,638                     $161,871                   $136,506
==================================================                     ========                   ========
% of assets attributable to foreign offices     41%                          46%                        50%
</TABLE>

(1)   Interest and average rates are presented on a fully taxable basis. The
      applicable combined federal, state and local incremental tax rate used to
      determine the amounts of the tax equivalent adjustments to interest
      revenue (which recognize the income tax savings on tax-exempt assets) was
      41 percent for 1999, 41 percent for 1998 and 41 percent for 1997.


62 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                      1999                         1998                             1997
                                           ---------------------------   ----------------------------    ---------------------------
                                           Average             Average   Average              Average    Average             Average
($ in millions)                            Balance   Interest     Rate   Balance  Interest       Rate    Balance   Interest     Rate
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>          <C>       <C>   <C>          <C>         <C>    <C>           <C>      <C>
Liabilities and
    Stockholders' Equity
Interest-bearing deposits
    In domestic offices
        Time deposits                      $ 8,006      $ 431     5.38% $ 15,203     $ 879       5.78%  $ 12,133      $ 679    5.60%
        Other                                6,658        263     3.95%    6,993       304       4.35%     4,707        216    4.59%
-------------------------------------------------------------           ------------------              -------------------
        Total in domestic offices           14,664        694     4.73%   22,196     1,183       5.33%    16,840        895    5.31%
    In foreign offices
        Deposits from banks in
          foreign countries                  3,283        256     7.80%    6,430       471       7.33%     7,628        480    6.29%
        Other time and savings deposits      9,021        428     4.74%   10,474       458       4.37%    11,022        611    5.54%
        Other                                  388         46    11.86%    1,694        83       4.90%     1,952         90    4.61%
-------------------------------------------------------------           ------------------              -------------------
        Total in foreign offices            12,692        730     5.75%   18,598     1,012       5.44%    20,602      1,181    5.73%
-------------------------------------------------------------           ------------------              -------------------
Total interest-bearing deposits             27,356      1,424     5.21%   40,794     2,195       5.38%    37,442      2,076    5.54%
Trading liabilities
    In domestic offices                        286         33    11.54%    1,957       147       7.51%     1,699        181   10.65%
    In foreign offices                       2,294         98     4.27%    5,762       315       5.47%     3,966        295    7.44%
-------------------------------------------------------------           ------------------              -------------------
Total trading liabilities                    2,580        131     5.08%    7,719       462       5.99%     5,665        476    8.40%
Securities loaned and securities sold
    under repurchase agreements
    In domestic offices                      5,944        415     6.98%   19,881     1,458       7.33%    13,679        837    6.12%
    In foreign offices                       2,317        124     5.35%    8,851       439       4.96%    10,218        576    5.64%
-------------------------------------------------------------           ------------------              -------------------
Total securities loaned and securities
  sold under repurchase agreements           8,261        539     6.52%   28,732     1,897       6.60%    23,897      1,413    5.91%
Other short-term borrowings
    In domestic offices                      9,889        556     5.62%   16,488       961       5.83%    14,429        881    6.11%
    In foreign offices                       2,996        240     8.01%    5,109       366       7.16%     5,739        312    5.44%
-------------------------------------------------------------           ------------------              -------------------
Total other short-term borrowings           12,885        796     6.18%   21,597     1,327       6.14%    20,168      1,193    5.92%
Long-term debt
    In domestic offices                      9,375        545     5.81%   10,056       581       5.78%     7,725        455    5.89%
    In foreign offices                       5,922         63     1.06%    7,284       340       4.67%     3,856        200    5.19%
-------------------------------------------------------------           ------------------              -------------------
Total long-term debt                        15,297        608     3.97%   17,340       921       5.31%    11,581        655    5.66%
-------------------------------------------------------------           ------------------              -------------------
Trust preferred capital securities           1,424        114     8.01%    1,455       117       8.04%     1,401        113    8.07%
-------------------------------------------------------------           ------------------              -------------------
Total Interest-Bearing
    Liabilities                             67,803     $3,612     5.33%  117,637    $6,919       5.88%   100,154     $5,926    5.92%
                                                       ======                       ======                           ======
Noninterest-bearing deposits
    In domestic offices                      2,578                         2,766                           2,331
    In foreign offices                       1,597                         1,497                             842
--------------------------------------------------                      --------                         -------
Total noninterest-bearing deposits           4,175                         4,263                           3,173
Noninterest-bearing trading liabilities     12,097                        23,706                          18,199
Acceptances outstanding                        218                           471                             682
All other liabilities                        7,856                        10,183                           8,311
Preferred stock of subsidiary                   --                           253                              45
Stockholders' equity
    Preferred stock                            393                           522                             717
    Common stockholders' equity              4,096                         4,836                           5,225
--------------------------------------------------                      --------                         -------
Total Liabilities and
    Stockholders' Equity                   $96,638                      $161,871                        $136,506
==================================================                      ========                         =======
% of liabilities attributable
    to foreign offices                          43%                           46%                             49%
Rate spread                                                       1.06%                          1.02%                         1.09%
Net interest margin (net interest
    revenue to total interest-
    earning assets)
  In domestic offices                      $44,350      $ 509     1.15% $ 71,763     $ 545       0.76%  $ 56,367      $ 427    0.76%
  In foreign offices                        25,061        313     1.25%   48,887       858       1.76%    47,967        958    2.00%
-------------------------------------------------------------           ------------------              -------------------
Total                                      $69,411      $ 822     1.18% $120,650    $1,403       1.16%  $104,334     $1,385    1.33%
=============================================================           ==================              ===================
</TABLE>


                               Bankers Trust Corporation and its Subsidiaries 63
<PAGE>

--------------------------------------------------------------------------------

Volume/Rate Analysis of Changes in Net Interest Revenue

The following table attributes changes in fully taxable net interest revenue to
changes in either average daily balances or average rates for both
interest-earning assets and interest-bearing sources of funds. Because of the
numerous simultaneous balance and rate changes during any period, it is not
possible to precisely allocate such changes between balances and rates. For
purposes of this table, changes that are not due solely to balance or rate
changes are allocated to such categories based on the respective percentage
changes in average daily balances and average rates.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                               1999/98                          1998/97
                                                                       --------------------------       ---------------------------
                                                                          Increase (decrease)              Increase (decrease)
                                                                           due to change in:                due to change in:
                                                                       --------------------------       ---------------------------
                                                                       Average   Average                Average  Average
(in millions)                                                          Balance     Rate    Total        Balance    Rate      Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>        <C>     <C>           <C>        <C>     <C>
Consolidated
Interest Revenue
Interest-bearing deposits with banks                                   $    91    $ (92)  $    (1)      $  (123)   $  38   $   (85)
Federal funds sold                                                         (37)     (14)      (51)          (49)      (6)      (55)
Securities purchased under resale agreements                              (717)    (243)     (960)           11      272       283
Securities borrowed                                                       (765)     (74)     (839)          454       22       476
Trading assets                                                          (1,214)    (262)   (1,476)           83     (183)     (100)
Securities available for sale                                             (331)      27      (304)          250      (37)      213
Loans                                                                      (76)    (113)     (189)          321      (47)      274
Customer receivables                                                       (51)     (17)      (68)            3        2         5
-----------------------------------------------------------------------------------------------------------------------------------
Total interest revenue                                                  (3,100)    (788)   (3,888)          950       61     1,011
-----------------------------------------------------------------------------------------------------------------------------------
Interest Expense
Interest-bearing deposits                                                 (702)     (69)     (771)          182      (63)      119
Trading liabilities                                                       (270)     (61)     (331)          145     (159)      (14)
Securities loaned and securities sold under repurchase agreements       (1,336)     (22)   (1,358)          307      177       484
Other short-term borrowings                                               (538)       7      (531)           87       47       134
Long-term debt                                                            (100)    (213)     (313)          308      (42)      266
Trust preferred capital securities                                          (2)      (1)       (3)            4       --         4
-----------------------------------------------------------------------------------------------------------------------------------
Total interest expense                                                  (2,948)    (359)   (3,307)        1,033      (40)      993
-----------------------------------------------------------------------------------------------------------------------------------
Net change in net interest revenue                                     $  (152)   $(429)  $  (581)      $   (83)   $ 101   $    18
===================================================================================================================================
Domestic Offices
Interest Revenue
Interest-bearing deposits with banks                                   $    83    $ (73)  $    10       $    15    $ (21)  $    (6)
Federal funds sold                                                         (37)     (14)      (51)          (49)      (6)      (55)
Securities purchased under resale agreements                              (472)    (184)     (656)           76      277       353
Securities borrowed                                                       (621)    (163)     (784)          412       31       443
Trading assets                                                            (353)    (131)     (484)           69       54       123
Securities available for sale                                             (293)      30      (263)          240      (27)      213
Loans                                                                      173      (23)      150           174      (47)      127
Customer receivables                                                       (51)     (17)      (68)            3        2         5
-----------------------------------------------------------------------------------------------------------------------------------
Total interest revenue                                                  (1,571)    (575)   (2,146)          940      263     1,203
-----------------------------------------------------------------------------------------------------------------------------------
Interest Expense
Interest-bearing deposits                                                 (368)    (121)     (489)          285        3       288
Trading liabilities                                                       (167)      53      (114)           25      (59)      (34)
Securities loaned and securities sold under repurchase agreements         (976)     (67)   (1,043)          432      189       621
Other short-term borrowings                                               (372)     (33)     (405)          121      (41)       80
Long-term debt                                                             (40)       4       (36)          135       (9)      126
Trust preferred capital securities                                          (2)      (1)       (3)            4       --         4
Funds provided to foreign offices                                         (137)     418       281          (297)     (47)     (344)
Funds provided by foreign offices                                          (62)    (389)     (451)          475      150       625
-----------------------------------------------------------------------------------------------------------------------------------
Total interest expense                                                  (2,124)    (136)   (2,260)        1,180      186     1,366
-----------------------------------------------------------------------------------------------------------------------------------
Net change in net interest revenue                                     $   553    $(439)  $   114       $  (240)   $  77   $  (163)
===================================================================================================================================
Foreign Offices
Interest Revenue
Interest-bearing deposits with banks                                   $     5    $ (16)  $   (11)      $  (111)   $  32   $   (79)
Securities purchased under resale agreements                              (215)     (89)     (304)          (53)     (17)      (70)
Securities borrowed                                                       (135)      80       (55)           43      (10)       33
Trading assets                                                            (806)    (186)     (992)           20     (243)     (223)
Securities available for sale                                              (51)      10       (41)           17      (17)       --
Loans                                                                     (248)     (91)     (339)          147       --       147
-----------------------------------------------------------------------------------------------------------------------------------
Total interest revenue                                                  (1,450)    (292)   (1,742)           63     (255)     (192)
-----------------------------------------------------------------------------------------------------------------------------------
Interest Expense
Interest-bearing deposits                                                 (337)      55      (282)         (111)     (58)     (169)
Trading liabilities                                                       (159)     (58)     (217)          111      (91)       20
Securities loaned and securities sold under repurchase agreements         (347)      32      (315)          (72)     (65)     (137)
Other short-term borrowings                                               (165)      39      (126)          (37)      91        54
Long-term debt                                                             (54)    (223)     (277)          162      (22)      140
Funds provided by domestic offices                                         137     (418)     (281)          297       47       344
Funds provided to domestic offices                                          62      389       451          (475)    (150)     (625)
-----------------------------------------------------------------------------------------------------------------------------------
Total interest expense                                                    (863)    (184)   (1,047)         (125)    (248)     (373)
-----------------------------------------------------------------------------------------------------------------------------------
Net change in net interest revenue                                     $  (587)   $(108)  $  (695)      $   188    $  (7)  $   181
===================================================================================================================================
</TABLE>


64 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

Interest Rate Sensitivity

      Interest rate sensitivity data for the Corporation at December 31, 1999 is
presented in the table below. For purposes of this presentation, the
interest-earning/bearing components of trading assets and trading liabilities
are assumed to reprice within three months.

      The interest rate gaps reported in the table arise when assets are funded
with liabilities having different repricing intervals, after considering the
effect of off-balance sheet hedging instruments. Since these gaps are actively
managed and change daily as adjustments are made in interest rate views and
market outlook, positions at the end of any period may not be reflective of the
Corporation's interest rate view in subsequent periods. Active management
dictates that longer-term economic views are balanced against prospects of
short-term interest rate changes in all repricing intervals.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                            By Repricing Interval
                                                            -----------------------------------------------------
                                                                      After three   After six      After                Non-
                                                              Within       months      months   one year    After  interest-
                                                               three   but within  but within but within     five    bearing
(in millions) December 31, 1999                               months   six months    one year five years    years      funds   Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>            <C>         <C>       <C>      <C>        <C>     <C>
Assets
Interest-bearing deposits with banks                        $  2,209       $    9      $   18    $ 2,457  $    --    $    -- $ 4,693
Federal funds sold                                             2,472           --          --         --       --         --   2,472
Securities purchased under resale agreements                   6,525           --         239         --       --         --   6,764
Trading assets                                                 5,621           --          --         --       --     13,396  19,017
Securities available for sale                                  2,197          237         194        326      298         --   3,252
Customer receivables                                             306           --          --         --       --         --     306
Gross loans                                                   16,905        1,288         219        909      641         --  19,962
Noninterest-earning assets and allowance for credit losses        --           --          --         --       --     11,691  11,691
------------------------------------------------------------------------------------------------------------------------------------
Total                                                         36,235        1,534         670      3,692      939     25,087  68,157
------------------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Interest-bearing deposits                                     14,094        1,112         189        657    2,428         --  18,480
Trading liabilities                                               53           --          --         --       --      5,213   5,266
Securities loaned and securities sold under
    repurchase agreements                                         56           --          --         --       --         --      56
Other short-term borrowings                                   10,993          264         283         --       --         --  11,540
Long-term debt                                                 5,882          753         105      6,734    1,532         --  15,006
Mandatorily redeemable capital securities of
    subsidiary trusts holding solely junior subordinated
    deferrable interest debentures                                --           --          --         --    1,428         --   1,428
Preferred stock                                                  251          125          --         --       --         --     376
Noninterest-bearing liabilities, including allowance for
    credit losses, and common stockholders' equity                --           --          --         --       --     16,005  16,005
------------------------------------------------------------------------------------------------------------------------------------
Total                                                         31,329        2,254         577      7,391    5,388     21,218  68,157
------------------------------------------------------------------------------------------------------------------------------------
Effect of off-balance sheet hedging instruments               (5,465)       3,961          80        970      454         --      --
------------------------------------------------------------------------------------------------------------------------------------
Interest Rate Sensitivity Gap                               $   (559)      $3,241      $  173    $(2,729) $(3,995)   $ 3,869 $    --
====================================================================================================================================
Cumulative Interest Rate Sensitivity Gap                    $   (559)      $2,682      $2,855    $   126  $(3,869)   $    -- $    --
====================================================================================================================================
</TABLE>


                               Bankers Trust Corporation and its Subsidiaries 65
<PAGE>

--------------------------------------------------------------------------------

Deposits

      The Corporation's certificates of deposit and other time deposits issued
by domestic and foreign offices in amounts of $100,000 or more, together with
their remaining maturities, and other interest-bearing deposits at December 31,
1999 were as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
(in millions)                                                                    Domestic              Foreign                 Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>                   <C>                  <C>
Certificates of deposit of $100,000 or more
    3 months or less                                                              $   637               $   32               $   669
    Over 3 through 6 months                                                         1,241                  122                 1,363
    Over 6 through 12 months                                                           38                    8                    46
    Over 12 months                                                                    511                    3                   514
------------------------------------------------------------------------------------------------------------------------------------
Total                                                                               2,427                  165                 2,592
------------------------------------------------------------------------------------------------------------------------------------
Other time deposits of $100,000 or more
    3 months or less                                                                  181                4,188                 4,369
    Over 3 through 6 months                                                             8                  209                   217
    Over 6 through 12 months                                                            1                  119                   120
    Over 12 months                                                                    153                  111                   264
------------------------------------------------------------------------------------------------------------------------------------
Total                                                                                 343                4,627                 4,970
------------------------------------------------------------------------------------------------------------------------------------
Other                                                                               9,348                1,570                10,918
------------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits                                                   $12,118               $6,362               $18,480
====================================================================================================================================
</TABLE>

      Deposits by foreign depositors in domestic offices amounted to $1.5
billion, $1.4 billion and $1.0 billion at December 31, 1999, 1998 and 1997,
respectively.


66 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------
                            DESCRIPTION OF BUSINESS
--------------------------------------------------------------------------------

Acquisition by Deutsche Bank AG

On June 4, 1999, the change-in-control ("COC") date, pursuant to an agreement
dated as of November 30, 1998, between Deutsche Bank AG ("Deutsche Bank") and
Bankers Trust Corporation ("Bankers Trust"), Deutsche Bank, through its U.S.
holding corporation, Taunus Corporation ("Taunus"), acquired all of the
outstanding shares of common stock of Bankers Trust from its shareholders at a
price of $93.00 per share (the "Acquisition").

      On June 5, 1999, Bankers Trust transferred its wholly-owned subsidiary BT
Alex. Brown Incorporated ("BTAB") and substantially all of its interest in
Bankers Trust International PLC ("BTI") to Deutsche Bank Securities Inc.
("DBSI") and Deutsche Holdings (BTI) Ltd., respectively, which are wholly-owned
subsidiaries of Deutsche Bank. The transfer of BTAB to DBSI took the form of an
exchange of stock pursuant to which BTAB became a wholly-owned subsidiary of
DBSI and Bankers Trust received shares of DB U.S. Financial Markets Holding
Corporation ("DBUSH"), the parent of DBSI. In the third quarter of 1999, Bankers
Trust sold its shares of DBUSH to Taunus for approximately $800 million. The
transfer of substantially all of Bankers Trust's interest in BTI was for cash in
the amount of approximately $1.7 billion.

      On August 31, 1999, Bankers Trust Corporation completed the sale of
Bankers Trust Australia Limited ("BTAL"), a wholly-owned subsidiary, to the
Principal Financial Group for a price of approximately $1.3 billion. Prior to
the sale, BTAL remitted to Bankers Trust Corporation a dividend for accumulated
retained earnings that included proceeds from BTAL's sale of its investment
banking division to Macquarie Bank. Bankers Trust Corporation also received cash
for the assumption of certain BTAL long-term debt. In addition, according to the
sale agreement Bankers Trust Corporation is entitled to receive an additional
payment. The amount and timing of such payment is not known at this time. When
such payment is received, it will be reflected in Bankers Trust's results of
operations. Bankers Trust Corporation recognized a pre-tax gain of approximately
$779 million in the third quarter of 1999 on the sale of BTAL.

      In connection with the Acquisition and in addition to the foregoing
transactions, Bankers Trust Corporation together with its subsidiaries (the
"Corporation" or the "Firm") has and will continue to transfer certain entities
and financial assets and liabilities to Deutsche Bank related entities. The
consideration received and to be received for such transactions was and will be
fair market value of the financial assets and liabilities at and on the date of
transfer. In addition, the Corporation's money market related funding
activities, which are short-term in nature, are expected to be significantly
reduced over time.

      In conjunction with the Acquisition and to strengthen the Corporation's
capital base, Deutsche Bank made a capital contribution of $1.4 billion in the
second quarter of 1999.

      See Note 1 of Notes to Financial Statements for more information on the
Acquisition by Deutsche Bank.

      Prior to the Acquisition, the Corporation was a global financial
institution, providing products and services to its clients worldwide.
Subsequent to the Acquisition and associated reorganization activities, the
Corporation and its subsidiaries conduct their business primarily in the
Americas, focusing their activities principally in the asset management,
lending, institutional services, private equity and private banking businesses.

Bankers Trust Corporation

      Bankers Trust Corporation is a registered bank holding company that was
incorporated in 1965. Bankers Trust, which accounted for 3 percent of
consolidated assets at December 31, 1999, is the parent of Bankers Trust Company
("BTCo" or the "Bank") and its other subsidiaries.

      Bankers Trust is a legal entity separate and distinct from its
subsidiaries, including BTCo. There are various legal limitations governing the
extent to which certain of Bankers Trust's subsidiaries may extend credit, pay
dividends or otherwise supply funds to, or engage in transactions with, Bankers
Trust or certain of its other subsidiaries. The rights of Bankers Trust to
participate in any distribution of assets of any subsidiary upon its
dissolution, winding-up, liquidation or reorganization or otherwise are subject
to the prior claims of creditors of that subsidiary, except to the extent that
Bankers Trust may itself be a creditor of that subsidiary and its claims are
recognized. Claims on Bankers Trust's subsidiaries by creditors other than
Bankers Trust include long-term debt and substantial obligations with respect to
deposit liabilities, trading liabilities, federal funds purchased, securities
sold under repurchase agreements and commercial paper, as well as short-term
borrowings and accounts payable.

Business Segments

      In conjunction with the Acquisition, the Corporation realigned its
business activities to conform to Deutsche Bank's management structure. In this
regard, the Retail and Private Banking division provides banking services to
private clients, self-employed individuals as well as to smaller business
clients, and offers a wide variety of banking products to these clients
including financial planning services and market research and investment
strategies for high net worth individuals. The Asset Management division
combines the institutional asset management and retail investment fund
businesses. The Global Corporates and Institutions division integrates
long-standing relationship and credit-oriented commercial banking with the
product and transactional orientation of investment banking for corporate
clients and financial institutions. This business segment also includes credit
business, trade finance, structured finance and cash management in addition to
the Corporation's private equity business and trading activities. Global
Technology and Services comprises custody services, payment settlement,
securities settlement, and electronic banking services.

      Corporate Items include revenue and expenses that have not been allocated
to business segments, the operating income and expenses of BTAL and Consorcio,
and the results of smaller businesses that are not included in the main business
segments.

      See Note 22 of Notes to Financial Statements for a description of these
Business Segments.


                               Bankers Trust Corporation and its Subsidiaries 67
<PAGE>

--------------------------------------------------------------------------------

Bankers Trust Company

Bankers Trust's principal banking subsidiary is Bankers Trust Company, which,
along with its subsidiaries accounted for 75 percent of the Corporation's
consolidated assets at December 31, 1999. BTCo, founded in 1903, originates
loans and other forms of credit, accepts deposits, arranges financings and
provides numerous other commercial banking and financial services.

Bankers Trust (Delaware)

      Bankers Trust (Delaware) is a state bank chartered under the laws of
Delaware, which, along with its subsidiaries, accounted for 2 percent of the
Corporation's consolidated assets at December 31, 1999. Bankers Trust (Delaware)
engages in commercial banking activities, with an emphasis on lending, funding
and corporate finance.

Supervision and Regulation

Bankers Trust is a bank holding company within the meaning of the Bank Holding
Company Act of 1956, and as such is required to register with the Federal
Reserve Board. As a registered bank holding company, Bankers Trust is required
to file with the Federal Reserve Board certain reports and information and is
restricted in certain of its acquisitions, some of which are subject to approval
by the Federal Reserve Board. In addition, Bankers Trust may be required to
obtain the approval of the New York State Banking Department in order for it to
acquire certain bank and non-bank subsidiaries.

      Bankers Trust and its nonbank subsidiaries are affiliates of BTCo and
Bankers Trust (Delaware) within the meaning of applicable federal statutes, and
such banks are therefore subject to restrictions on loans and other extensions
of credit to Bankers Trust and certain other affiliates and on certain other
types of transactions with them or involving their securities.

      BTCo is subject to the supervision of, and to examination by, the New York
State Banking Department, the Federal Reserve Board and the Federal Deposit
Insurance Corporation. Bankers Trust (Delaware) is subject to regulation by the
Office of the State Bank Commissioner of the State of Delaware and by the
Federal Deposit Insurance Corporation. See Note 14 of Notes to Financial
Statements for the required reserve balances maintained by the Corporation's
subsidiary banks at a Federal Reserve Bank and limitations on the availability
of BTCo's undistributed earnings for the payment of dividends.

      The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") provides for cross-guarantees of the liabilities of insured
depository institutions pursuant to which any bank or savings association
subsidiary of a holding company may be required to reimburse the FDIC for any
loss or anticipated loss to the FDIC that arises from a default of any other
subsidiary bank or savings association of the parent holding company or
assistance provided to such an institution in danger of default.

      In December 1991, the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA") was enacted. FDICIA substantially revised the bank
regulatory and funding provisions of the Federal Deposit Insurance Act and
revised several other federal banking statutes.

      FDICIA establishes five capital categories, ranging from "well
capitalized," to "critically undercapitalized." A depository institution is well
capitalized if it significantly exceeds the minimum level required by regulation
for each relevant capital measure. Under FDICIA, an institution that is not well
capitalized is generally prohibited from accepting brokered deposits and
offering interest rates on deposits higher than the prevailing rate in its
market; in addition, "pass through" insurance coverage may not be available for
certain employee benefit accounts. FDICIA also requires an undercapitalized
depository institution to submit an acceptable capital restoration plan to the
appropriate federal bank regulatory agency. One requisite element of such a plan
is that the institution's parent holding company must guarantee compliance by
the institution with the plan, subject to certain limitations. In the event of
the parent holding company's bankruptcy, the guarantee, and any other
commitments that the parent holding company has made to federal bank regulators
to maintain the capital of its depository institution subsidiaries, would be
assumed by the bankruptcy trustee and entitled to priority in payment.

      Based on their respective regulatory capital ratios at December 31, 1999,
both BTCo and Bankers Trust (Delaware) are well capitalized, based on the
definitions in the regulations issued by the Federal Reserve Board and the other
federal bank regulatory agencies setting forth the general capital requirements
mandated by FDICIA. See Note 15 of Notes to Financial Statements for information
regarding the Corporation's and BTCo's regulatory capital ratios.

      FDICIA contains numerous other provisions, including reporting
requirements, termination of the "too big to fail" doctrine except for special
cases, limitations on the FDIC's payment of deposits at foreign branches and
revised regulatory standards for, among other things, real estate lending and
capital adequacy.

      A federal depositor preference statute was enacted in 1993 providing that
deposits and certain claims for administrative expenses and employee
compensation against an insured depository institution would be afforded a
priority over other general claims against such an institution, including
federal funds and letters of credit, in the "liquidation or other resolution" of
such an institution by any receiver.

      In November 1999 federal financial modernization legislation was enacted
which allows qualifying banks and bank holding companies to elect to be treated
as financial holding companies ("FHCs"). FHCs may engage in a broader range of
activity than non-FHCs, which will be limited to the activities traditionally
permissible for bank holding companies. Although bank regulatory authorities
have issued interim and proposed regulations, the full scope of the new powers
available to FHCs will only become clear after the bank regulatory authorities
adopt final implementing regulations. The expanded activities will include
insurance underwriting and agency activities, and expanded securities, mutual
fund and merchant banking activities. The ability to engage in information
technology and data processing related businesses will also be expanded. The
expanded scope of activities permits the affiliation of firms, such as banks and
insurance companies, not permissible under prior law. In order to qualify to
make the FHC election, the electing foreign bank or the bank subsidiaries of the
electing bank


68 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

holding company, as the case may be, must be "well capitalized", "well managed",
and, if subject to the CRA, have at least a "satisfactory" CRA rating. In the
case of Bankers Trust, Deutsche Bank, BTCo and Bankers Trust (Delaware) would
all be required to meet the standards (or their equivalent) for it to elect FHC
status.

      The modernization legislation also modifies current law related to
financial privacy and community reinvestment. The new financial privacy
provisions will generally prohibit financial institutions, including the
Corporation, from disclosing nonpublic personal financial information to third
parties unless customers have the opportunity to "opt out" of the disclosure.
Although Deutsche Bank has received FHC status, the Corporation at this time is
unable to predict the impact the modernization legislation may have on it and
its affiliates.

      In addition to banking and securities laws, regulations and regulatory
agencies governing the Corporation worldwide, the Corporation also is subject to
various other laws, regulations and regulatory agencies throughout the United
States and in other countries, including Germany. Furthermore, various
proposals, bills and regulations have been, and may in the future be, considered
in the United States Congress, the New York State Legislature and various other
governmental regulatory and legislative bodies, which could result in changes in
the profitability and governance of the Corporation.

      References under the caption "Supervision and Regulation" to applicable
statutes, regulations and orders are brief summaries of portions thereof which
do not purport to be complete and which are qualified in their entirety by
reference thereto.

Important Factors Relating to Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements to encourage companies to provide prospective
information about their companies without fear of litigation so long as those
statements are identified as forward-looking and are accompanied by meaningful
cautionary statements identifying important factors that could cause actual
results to differ materially from those projected in such statements. In
connection with certain statements made in this report and those that may be
made in the future by or on behalf of the Corporation which are identified as
forward-looking statements, the Corporation notes that the following important
factors, among others, could cause actual results to differ materially from
those set forth in any such forward-looking statements. Further, such
forward-looking statements speak only as of the date on which such statement or
statements are made, and the Corporation undertakes no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events.

      The business and profitability of a large financial services organization
such as the Corporation is influenced by prevailing economic conditions and
governmental policies, both foreign and domestic. The actions and policy
directives of the Federal Reserve Board determine to a significant degree the
cost and the availability of funds obtained from money market sources for
lending and investing. Federal Reserve Board policies and regulations also
influence, directly and indirectly, the rates of interest paid by commercial
banks on their interest-bearing deposits and may also impact the value of
financial instruments held by the Corporation. The nature and impact on the
Corporation of future changes in economic and market conditions and monetary and
fiscal policies, both foreign and domestic, are not predictable and are beyond
the Corporation's control. In addition, these conditions and policies can impact
the Corporation's customers and counterparties which may increase the risk of
default on their obligations to the Corporation and its affiliates. They can
also affect the competitive conditions in the markets and products within which
the Corporation operates, which can have an adverse impact on the Corporation's
ability to maintain its revenue streams.

      As part of its ongoing business, the Corporation assumes financial
exposures to interest rates, currencies, equities and other financial products.
In doing so, the Corporation is subject to unforeseen events which may not have
been anticipated or which may have effects which exceed those assumed within its
risk management processes. This risk can be accentuated by volatility and
reduction in liquidity in those markets which in turn can impact the
Corporation's ability to hedge and trade the positions concerned. In addition,
the Corporation is dependent on the ability of Deutsche Bank to access the
financial markets for its funding needs.

      The operations of the Corporation and its affiliates, which are widely
diversified geographically and vary from country to country, involve certain
economic, political and legal risks which differ from those associated with
their U.S. operations. These risks include, among others, the possibility of
expropriation of assets, exchange rate fluctuations, severe reductions in
business levels, restrictions on the withdrawal of funds, balance-of-payments
problems and changes in laws and regulations. In addition, in certain
jurisdictions the operations of the Corporation and its affiliates may involve
legal uncertainties. See "Cross-Border Outstandings" on page 21. Further,
certain financial institutions with which the Corporation competes may not be
subject to the same regulatory restrictions as the Corporation and its
affiliates which may make it more difficult for the Corporation to compete with
those institutions for business.


                               Bankers Trust Corporation and its Subsidiaries 69
<PAGE>

--------------------------------------------------------------------------------

      As noted in "Supervision and Regulation" on page 68, the Corporation is
regulated by and subject to various domestic and international regulators. The
actions of these regulators can have an impact on the profitability and
governance of the Corporation. Increases by regulatory authorities of minimum
capital, reserve, deposit insurance and other financial viability requirements
can also affect the Corporation's profitability.

      The Corporation is subject to operational and control risk which is the
potential for loss caused by a breakdown in communication, information,
processing and settlement systems or processes or a lack of compliance with the
procedures on which they rely either within the Corporation and its affiliates
or within the broader financial systems infrastructure.

      As with any large financial institution, the Corporation is also subject
to the risk of litigation and to an unexpected or adverse outcome in such
litigation. Competitive pressures in the marketplace and unfavorable or adverse
publicity and news coverage can have the effect of lessening customer demand for
the Corporation's services. Ultimately, the Corporation's businesses and their
success are dependent on the Corporation's ability to attract and retain high
quality employees.

Properties

BTCo owns a 39-story building at 130 Liberty Street, a 10-story office building
at 4 Albany Street, both in Manhattan, and a 998-year leasehold interest in an
eight-story office building in the Broadgate complex in London, England. The
other principal office premises leased are a portion of a 42-story office
building located at 280 Park Avenue, (formerly an owned property), seven stories
of a 37-story building at 14-16 Wall Street, four stories of the office complex
at the World Trade Center, all in Manhattan, an eight-story building in Jersey
City, New Jersey, and a three-story building in Nashville, Tennessee. Portions
of certain of these properties are leased to tenants or subtenants. In addition
to the offices referred to above, branch offices and locations for other
activities are occupied in cities throughout the world under various types of
ownership and leaseholds. See Note 7 of Notes to Financial Statements for
additional information concerning lease commitments.

Litigation and Related Matters

Pursuant to an agreement (the "Agreement") with the United States Attorney's
Office in the Southern District of New York entered into in 1999, BTCo pleaded
guilty to misstating entries in the bank's books and records, constituting a
criminal violation of Title 18, United States Code, Section 1005 and paid a fine
to federal and state authorities. Although the Agreement concludes the United
States Attorney's Office's investigation of BTCo, BTCo continues to cooperate
with and provide information to the United States Attorney's Office and other
regulatory agencies and authorities, including the Securities and Exchange
Commission ("Commission"), regarding this matter. As a consequence of its guilty
plea, BTCo and/or certain affiliates have received certain exemptions and
continue to seek other exemptions from regulatory agencies and authorities,
including the Commission, to continue to provide certain services to its
clients. Although no assurance can be given that such exemptions will be
granted, the Corporation does not expect further consequences of the Agreement
to be materially adverse to the consolidated financial statements of the
Corporation. Additional information with respect to the foregoing is set forth
in the Corporation's Current Report on Form 8-K filed on March 12, 1999 with the
Commission.

      In addition to the matter described above, various legal actions and
proceedings involving Bankers Trust and various of its subsidiaries are
currently pending. Management, after discussions with counsel, does not
anticipate that losses, if any, resulting from such actions and proceedings
would be material.

Proposed Merger of Deutsche Bank AG and Dresdner Bank AG

      On March 9, 2000, Deutsche Bank AGand Dresdner Bank AG announced their
intention to merge. Dresdner Bank AG is one of the largest banks in Germany.

      The merger, which the parties expect to complete by January 2001, is
subject to the approval of the shareholders of Deutsche Bank AG and Dresdner
Bank AG and of various authorities worldwide.


70 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

Directors of the Registrant

Dr. Josef Ackermann
Director since 1999
Member of the Group Board of Deutsche Bank AG
Chairman of the Board, Chief Executive Officer and President of the Corporation
and Bankers Trust Company
Chairman of the Supervisory Board of Deutsche Bank Luxembourg S.A, and member of
the Supervisory Boards of Eurex Frankfurt AG, Eurex Zurich AG, Linde AG, Stora
Enso Oyj and Mannesmann AG. Dr. Ackermann relinquished his title as President of
the Corporation and Bankers Trust Company effective January 1, 2000. Age 52.

Hans H. Angermueller
Director since 1999
Director of Bankers Trust Company. Counsel, Shearman & Sterling. Age 75.

George B. Beitzel
Director since 1977
Director of Various Corporations
Director of Bankers Trust Company. Retired Senior Vice President and Director,
International Business Machines Corporation. Also a director of Computer Task
Group, Inc. and Staff Leasing, Inc. Age 71.

William R. Howell
Director since 1986
Retired Chief Executive Officer and Chairman of the Board of J.C. Penney
Company, Inc.
Director of Bankers Trust Company. Also a director of Exxon Mobil Corporation,
Halliburton Company, Warner-Lambert Corporation, Williams, Inc., and Central &
South West Corp.; and chairman, Southern Methodist University Board of Trustees.
Age 64.

Hermann-Josef Lamberti
Director since 1999
Member of the Group Board of Deutsche Bank AG
Executive Vice President of Deutsche Bank AG
Director of Bankers Trust Company. Vice Chairman of Bankers Trust Corporation
and Bankers Trust Company since August 19, 1999. Board member of Euroclear plc
(London), Euroclear sc. (Brussels) and The Clearing House Interbank Payments Co.
L.L.C. (New York); and supervisory board member of GZS (Frankfurt) and European
Transaction Bank (e.t.b.); and Advisory Council Member of Carl Zeiss Stiftung,
Oberkochen. Mr. Lamberti relinquished his title as Vice Chairman of Bankers
Trust Company effective January 1, 2000. Age 44.

John A. Ross
Director since 1999
Chief Executive Officer of Deutsche Bank Americas Holding Corp.
Director of Bankers Trust Company. President of the Corporation and Bankers
Trust Company as of January 1, 2000. Member of the Group Management Committee of
Deutsche Bank AG. Also a director and chief executive officer of Taunus
Corporation and director of Deutsche Bank Securities Inc. and DB Alex. Brown
LLC. Age 55.

Dr. Ronaldo H. Schmitz
Director since 1999
Member of the Group Board of Deutsche Bank AG
Director of Bankers Trust Company. Chairman of Deutsche Bank Americas Holding
Corp. Also a director of Deutsche Bank S.A.E.--Spain, Rohm and Haas and
INSEAD--Paris, France; member of the advisory board, Morgan Grenfell Private
Equity Fund; member of the Supervisory Board of Bertelsmann AG; non-executive
board member, Glaxo Wellcom plc; member of the board of trustees, American
Institute for Advanced Studies and American Institute for Contemporary German
Studies; member of the board, Harvard Business School; and member, Central
Capital Committee of Bundesverband Deutscher Banken (Federation of German
Banks). Age 61.


                               Bankers Trust Corporation and its Subsidiaries 71
<PAGE>

--------------------------------------------------------------------------------
                      EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------------------------------------

Set forth below are the names and ages of the executive officers of Bankers
Trust, positions held and the year from which held. These officers are elected
annually by the Board of Directors. There are no family relationships among such
persons.*

Dr. Josef Ackermann, 52
Chairman of the Board and Chief Executive Officer
Chairman of the Board, Chief Executive Officer and President of Bankers Trust
and BTCo since July 1, 1999. Member of the Group Board of Deutsche Bank AG.
Also, Chairman of the Supervisory Board of Deutsche Bank Luxembourg S.A. Dr.
Ackermann formerly held the position of President of the Executive Board of
Credit Suisse from 1993 to 1996, of which he was a member since 1990. Dr.
Ackermann relinquished his title as President of Bankers Trust and BTCo.
effective January 1, 2000.

Mary Cirillo, 52
Executive Vice President
Executive Vice President of Bankers Trust and Managing Director of BTCo since
June 1997. Executive Vice President of BTCo, effective January 1, 2000. Chief
Executive Officer of BTCo's Global Institutional Services business and
Divisional Board Member of BTCo's Global Technology & Services business. Ms.
Cirillo formerly held many positions in her 20-year career at Citicorp,
including division executive from 1989 to 1992; senior corporate officer for the
business evaluation and corporate re-engineering unit from 1993 to 1994; and
Senior Vice President of Global Finance Operations and Technology from 1994 to
1997. Ms. Cirillo resigned as an officer of Bankers Trust and BTCo effective
March 1, 2000.

Yves C. de Balmann, 53
Vice Chairman
Vice Chairman of Bankers Trust since April 1997. Senior Vice President of
Bankers Trust 1995-1997. Managing Director of BTCo from 1988 to September 1997.
He is Co-Chairman and Co-Chief Executive Officer of DB Alex.Brown LLC and
Deutsche Bank Securities Inc., and Co-Head of Global Investment Banking for
Deutsche Bank.

Michael Fazio, 38
Executive Vice President and Chief Administrative Officer
Executive Vice President and Chief Operating Officer of Bankers Trust and
Managing Director and Chief Operating Officer of BTCo since August 1, 1999.
Effective January 1, 2000, Executive Vice President and Chief Administrative
Officer of both Bankers Trust and BTCo. Mr. Fazio was formerly a Partner at
Arthur Andersen LLP, where he was in charge of the New York Banking, Brokerage
and Investment Banking Industry Program, the Business Process Risk Consulting
Services for financial market clients, as well as a member of the firm's Global
Financial Markets Advisory Committee. Mr. Fazio resigned as an officer of
Bankers Trust and BTCo effective March 1, 2000.

Hermann-Josef Lamberti, 44
Vice Chairman
Vice Chairman of Bankers Trust and BTCo. since August 19, 1999. Executive Vice
President of Deutsche Bank AG since December 1998. Member of the Group Board of
Deutsche Bank AG. Mr. Lamberti formerly held the position of General Manager of
IBM, Germany from 1997 to 1998 and Vice President Marketing and Brand Management
from 1995 to 1996. Mr. Lamberti relinquished his title as Vice Chairman of BTCo
effective January 1, 2000.

Troland S. Link, 63
General Counsel
General Counsel of Bankers Trust and Managing Director and General Counsel of
BTCo since July 21, 1999. Also, General Counsel of Deutsche Bank Americas since
1997. Mr. Link was formerly a Partner at Davis Polk & Wardwell.

Eugene A. Ludwig, 53
Vice Chairman
Vice Chairman of Bankers Trust and BTCo since May 1998. Mr. Ludwig formerly held
the positions of Comptroller of the Currency of the United States from 1993 to
April 1998, chairman of the Federal Financial Institutions Examination Council,
chairman of Neighborhood Housing Services, and director of the Federal Deposit
Insurance Corporation. Mr. Ludwig was head of the Control Committee and Capital
Commitment Committee and was responsible for risk and control, legal, regulatory
and other governmental issues central to implementing global strategies in
securities underwriting, lending and related businesses. In addition, Mr. Ludwig
was responsible for the Firm's corporate responsibility area. Mr. Ludwig
resigned as an officer of Bankers Trust and BTCo effective December 31, 1999.

Rodney A. McLauchlan, 46
Executive Vice President
Executive Vice President of Bankers Trust since April 1997. Senior Vice
President of Bankers Trust from 1992 to April 1997. Managing Director of BTCo
1987-1995 and since 1998. He has held the position of Managing Director of DB
Alex. Brown LLC (and its predecessors BT Securities Corporation and BT Alex.
Brown Incorporated) since 1995. Mr. McLauchlan is Chief Executive Officer of
Latin America for the Deutsche Bank Group.

John A. Ross, 55
President
President of Bankers Trust and BTCo since January 1, 2000. Chief Executive
Officer of Deutsche Bank Americas Holding Corp. since October 25, 1999. Mr. Ross
formerly held senior management positions in his 21-year career at The Bank of
New York, including Executive Vice President, Head of Global Asset and Liability
Management.

Mayo A. Shattuck III, 45
Vice Chairman
Vice Chairman of Bankers Trust since September 1997. He formerly held the
positions of President and Chief Operating Officer of Alex. Brown Incorporated
from 1991 to September 1997. He is Co-Chairman and Co-Chief Executive Officer of
DB Alex. Brown LLC and Deutsche Bank Securities Inc., and Co-Head of Global
Investment Banking for Deutsche Bank.

*     Certain of the executive officers held the Senior Managing Director title
      for a portion of 1996 and 1997. BTCo eliminated the title effective
      January 1, 1998 and reverted to the use of the Managing Director title as
      the most senior title below that of Vice Chairman.


72 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

Interest of Directors and Executive Officers and Their Associates in
Transactions with the Corporation

Some of the Corporation's directors and executive officers and their associates,
including affiliates and related interests, are customers of the Corporation
and/or subsidiaries of the Corporation, and some of the Corporation's directors
and executive officers and their associates, including affiliates and related
interests, from time to time are directors or officers of, or investors in,
corporations or members of partnerships or have an interest in other entities
which are customers of the Corporation and/or such subsidiaries. As such
customers, they have had transactions in the ordinary course of business with
the Corporation and/or such subsidiaries, including borrowings, all of which
were on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other persons
and did not involve more than normal risk of collectibility or present other
unfavorable features.

Extension of Directors and Officers Liability Insurance Program

Deutsche Bank maintains Directors & Officers Liability Insurance, under which
Bankers Trust Corporation is co-insured. This program will reimburse Bankers
Trust and/or any of its subsidiaries for certain payments they may be required
to make in indemnifying their directors and officers, and covers directors and
officers against certain liabilities and expenses for which they may not or
cannot be indemnified by Bankers Trust and/or any of its subsidiaries. The
program also includes coverage for a director or an officer who serves as a
director of a non-subsidiary corporation at the request of the Corporation. This
program is written by Zurich Insurance and other major insurance companies.

Committees of the Board of Directors

Following is a description of each of the Board Committees maintained by the
Corporation and the Bank. Included with the description is the number of times
each Committee met since that date and a list of the current members of each
such Committee:

Executive Committee (also functions as the Dividend and Price Committees)-- 2
Meetings

The Executive Committee acts for the Board of Directors when the Board is not in
session, subject to certain statutory limitations on its authority. The
Committee also considers and acts on matters which do not require full Board
consideration and approval and, upon the request of Management, it considers
some matters on a preliminary basis before their submission for full Board
consideration and approval. This Committee also serves as the Dividend Committee
to declare and set aside contractually required dividends (such as those
dividends declared from time to time on preferred stock issues) which may become
due during the periods between scheduled Board meetings. Current Members: Josef
Ackermann, Chair; Hans H. Angermueller; George B. Beitzel; John A. Ross; and
Ronaldo H. Schmitz.

Audit and Fiduciary Committee -- 7 Meetings

The Audit and Fiduciary Committee is comprised entirely of independent outside
directors and is appointed annually by the Board of Directors to oversee the
accounting, reporting and audit practices established by Management. The
function of the Committee, which meets at least quarterly, is twofold. It
monitors the effectiveness and quality of the system of internal accounting
policies, standards and controls designed to insure the accurate and efficient
reporting of financial activities, safeguarding of assets, proper exercise of
fiduciary powers and compliance with laws and regulations. The Committee meets
regularly with Management, the internal auditors, the internal credit auditors
and the independent external auditors (the "Auditors"). The Auditors have free
access to the Committee without the presence of Management. The Committee also
reviews the quality and effectiveness of the organizational structure of the
trust and fiduciary business units of the Corporation and the Bank and its
subsidiaries to ensure the proper exercise of fiduciary policies. In addition,
the Committee monitors the activities of management fiduciary committees
appointed from time to time by the Board of Directors, reviews the effective
implementation of policies, practices and procedures to prevent conflicts of
interest or improper interrelation between the administration of the fiduciary
and banking functions of the Bank. The Committee reports regularly to the Board
of Directors on its activities and such other matters as it deems necessary.
Current Members: Hans H. Angermueller, Chair; George B. Beitzel; and William R.
Howell.


                               Bankers Trust Corporation and its Subsidiaries 73
<PAGE>

--------------------------------------------------------------------------------

Committee on Public Responsibility and Concern -- 2 Meetings

The Committee on Public Responsibility and Concern, which is appointed annually
by the Board of Directors, reviews policy and audits the performance of the
Corporation in the discharge of its social responsibilities, which include, but
are not limited to, the Corporation's Equal Opportunity and Vendor Outreach
programs, community reinvestment activities, contributions program and
compliance with labor and employment laws and regulations. Current Members: John
A. Ross, Chair; George B. Beitzel; William R. Howell; Hermann-Josef Lamberti;
and Ronaldo H. Schmitz.

Transaction Authorization Committee -- 2 Meetings

The Transaction Authorization Committee, which is comprised of at least two
directors appointed annually by the Board of Directors, acts for the Board to
approve certain transactions, including rated securitization transactions.
Current Members: John A. Ross, Chair; and Josef Ackermann.

In addition to the Committee meetings shown above, there were six regularly
scheduled meetings of the Board of Directors following the Deutsche Bank
acquisition of the Corporation. Director attendance at Board meetings during the
period June 22-December 13, 1999 averaged 88%; aggregate attendance at Committee
meetings during the same period averaged 87%. Meeting attendance was below 75%
for Mr. Howell and Dr. Schmitz, due to previously scheduled commitments.

Compensation of Non-Officer Directors

Each director who is not also an employee of the Corporation, the Bank or
Deutsche Bank AG (each, a "non-officer director") receives an annual cash
retainer of $32,000. For each Board, Executive Committee and Committee on Public
Responsibility and Concern meeting he attends, a non-officer director receives a
fee of $1,000. The Chairman of the Committee on Public Responsibility and
Concern receives an additional annual fee of $3,000. Members of the Audit and
Fiduciary Committee receive a fee of $5,000 for each meeting he attends and the
Chairman of the Committee receives an additional annual fee of $5,000. No fees
are paid to members of the Transaction Authorization Committee. Travel and
out-of-pocket expenses of the directors in connection with their attendance at
Board or Committee meetings are either paid for or reimbursed by the Committee.


74 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

I. Summary Compensation Table ($000 omitted)

<TABLE>
<CAPTION>
                                                                                                             Long Term
                                                                                                            Compensation
                                                                                                 ---------------------------------
                                                       Annual Compensation                              Awards            Payouts
                                    ----------------------------------------------------------   ----------------------  ---------
                                                           Bonus
                                             ---------------------------------                                   Shares
                                                                         Total    Other Annual     Restricted Underlying    LTIP
Named Executive Officer       Year   Salary     Cash(c) +  Stock(d) =    Bonus   Compensation(e) Stock Awards    Options Payouts(f)
------------------------------------------------------------------------------------------------------------------------------------
<S>                           <C>   <C>      <C>         <C>         <C>            <C>               <C>         <C>     <C>
Frank N. Newman(a)            1999  $ 900.0  $ 1,799.2   $      --   $ 1,799.2      $     6.6            --           --  $19,509.3
  Chairman, Chief Executive   1998    900.0         --          --          --          148.4            --           --    2,989.6
  Officer & President         1997    900.0    5,760.7     4,204.6     9,965.3           72.1            --       80,000    1,031.3
Dr. Josef Ackermann(b)        1999       --         --          --          --             --            --           --         --
Yves C. de Balmann            1999    350.0    5,005.0     2,145.0     7,150.0        2,827.2            --           --   22,542.7
  Vice Chairman               1998    350.0    1,012.0     4,048.0     5,060.0          923.2            --           --    2,391.7
                              1997    350.0    4,030.7     3,821.0     7,851.7             --            --       60,000      825.0
Mayo A. Shattuck III          1999    350.0    5,005.0     2,145.0     7,150.0        2,825.7            --           --    6,965.9
  Vice Chairman               1998    350.0    1,012.0     4,048.0     5,060.0             --            --       60,000         --
                              1997     66.7    5,510.7     1,000.0     6,510.7             --            --       80,000    6,572.7
Mary Cirillo                  1999    350.0    3,650.0          --     3,650.0             --            --           --    5,941.9
  Executive Vice President    1998    350.0      580.0     2,320.0     2,900.0           44.6            --           --         --
                              1997    175.0    1,350.0     1,577.3     2,927.3             --         901.3       50,000         --
Rodney A. McLauchlan          1999    350.0    2,650.0          --     2,650.0        7,500.0            --           --   15,059.1
  Executive Vice President

<CAPTION>
                                 All Other
Named Executive Officer       Compensation(g)
---------------------------------------------
<S>                             <C>
Frank N. Newman(a)              $     9.6
  Chairman, Chief Executive         691.6
  Officer & President               617.6
Dr. Josef Ackermann(b)                 --
Yves C. de Balmann                    9.6
  Vice Chairman                   1,077.5
                                    907.8
Mayo A. Shattuck III                  9.6
  Vice Chairman                      79.7
                                      9.0
Mary Cirillo                          9.6
  Executive Vice President          102.1
                                    719.1
Rodney A. McLauchlan                  9.6
  Executive Vice President
</TABLE>

(a)   Mr. Newman resigned as Chairman, Chief Executive Officer and President
      effective June 30, 1999.
(b)   Dr. Ackermann received no compensation for acting as President and Chief
      Executive Officer of the Corporation subsequent to the Acquisition.
      Compensation is paid to Dr. Ackermann by Deutsche Bank for services
      performed by Dr. Ackermann for Deutsche Bank and its affiliates other than
      the Corporation and its subsidiaries.
(c)   Includes annual bonus part of which was paid in July 1999. Mr. Newman
      received a pro rata bonus in July 1999.
(d)   Includes the value of shares under Deutsche Bank's Share Scheme Plan.
      Under this Plan, shares are deferred and vest in equal installments for
      three years. For 1999, Messrs. de Balmann and Shattuck were each awarded
      shares under the Share Scheme Plan valued at $2,145,000.
(e)   Other Annual Compensation reflects amounts as follows: Newman -- $6,598
      for ground transportation; de Balmann -- $27,207 for ground
      transportation; and Shattuck -- $25,697 for ground transportation. Other
      Annual Compensation also reflects the value of Deutsche Bank stock
      appreciation rights. For 1999, Messrs. de Balmann and Shattuck were each
      awarded stock appreciation rights valued at $2,799,976. Other Annual
      Compensation for Mr. McLauchlan represents a retention payment from the
      Corporation.
(f)   Includes LTIP payouts for all deferred compensation amounts, awarded in
      prior years, which vested in full on June 4, 1999, the change-of-control
      ("COC") date. Also, includes payment for unexercised options outstanding
      on the COC date at $93.00 per option less the exercise price. Total COC
      payouts (excluding pro rata bonus included in bonus column) were as
      follows: Newman -- $19,509,264; de Balmann -- $22,542,695; Shattuck --
      $6,965,877; McLauchlan -- $15,059,068; and Cirillo -- $5,941,861. Messrs.
      de Balmann, Shattuck, and Ms. Cirillo received one-third of the payout in
      July 1999. The remaining two-thirds was deferred over the next two years
      pursuant to the Employment Agreements described below.
(g)   Includes company contributions to defined contribution plans.


                               Bankers Trust Corporation and its Subsidiaries 75
<PAGE>

--------------------------------------------------------------------------------

Employment Agreements

In connection with the Acquisition of the Corporation by Deutsche Bank, the
Corporation entered into agreements with Yves C. de Balmann, Mayo A. Shattuck
III, Mary Cirillo and Rodney A. McLauchlan (the "Employment Agreements"). Each
Employment Agreement is generally for a three-year term expiring on the third
anniversary of the date of the Acquisition. Each Employment Agreement provides
for an annual base salary (the "Base Salary") of at least $350,000 and an annual
bonus (the "Annual Bonus") of at least $7.15 million (in the case of Messrs. de
Balmann and Shattuck), $3.65 million (in the case of Ms. Cirillo) and $2.65
million (in the case of Mr. McLauchlan). A portion of each exec utive's Annual
Bonus will be payable in cash, with the balance payable in, or based on the
value of, Deutsche Bank common stock (the "Equity Bonus Portion"). The Equity
Bonus Portion of the Annual Bonus for the executives will vest in three equal
installments on the first, second and third anniversaries of the date of the
Acquisition (in the case of awards made in respect of 1999), in two equal
installments on each of the second and third anniversaries of the date of the
Acquisition (in the case of awards made in respect of 2000) and in full on the
third anniversary of the date of the Acquisition (in the case of awards made in
respect of 2001). Certain of the Employment Agreements provide for the deferral
of certain amounts otherwise due to the executives under incentive compensation
plans of the Corporation. Each Employment Agreement also provides for a
retention bonus (the "Retention Bonus"), 50% of the value of which is payable in
cash and 50% of the value of which may be paid in, or based on the value of,
Deutsche Bank common stock. The Retention Bonus is payable in two equal
installments on each of the second and third anniversaries of the Acquisition
date. The initial values of the Retention Bonuses were $8 million in the case of
Ms. Cirillo, $15 million in the case of each of Messrs. de Balmann and Shattuck
and $7.5 million, in the case of Mr. McLauchlan. Mr. McLauchlan subsequently
entered into an agreement pursuant to which his Retention Bonus was paid to him
in cash in 1999. During the employment period, each executive will be eligible
to participate in the employee benefit plans of the Corporation and its
affiliates and will generally receive service credit for all prior service with
the Corporation and its affiliates.

      If, during the employment period, the employment of an executive is
terminated by the Corporation without Cause (as such term is defined in the
Employment Agreements) or such executive terminates his or her employment for
Good Reason (as such term is defined in the Employment Agreements), such
executive will be entitled to receive (i) any unpaid Base Salary and Annual
Bonus for the remainder of the employment period, (ii) any unvested Equity Bonus
Portion of the Annual Bonus will become vested and payable based on the
prevailing value of Deutsche Bank common stock, and (iii) any unpaid Retention
Bonus will become vested and payable. The termination benefits payable under the
Employment Agreements generally supercede and replace any benefits due the
executive under the Bankers Trust Change of Control Severance Plan I described
below. If an amount payable to an executive under the Employment Agreement or
otherwise would subject such executive to the excise tax under Section 4999 of
the Code, the Corporation will make an additional payment to such executive such
that after the payment of all income and excise taxes, the executive will be in
the same after-tax position as if no excise tax under Section 4999 of the Code
had been imposed.

      In connection with the Acquisition, the Corporation entered into a similar
Employment Agreement with Frank N. Newman which would have expired in December
2003, and provided for an annual Base Salary of at least $900,000 and an Annual
Bonus of at least $10.1 million, a portion of which would have been payable in,
or based upon the value of Deutsche Bank common stock. Mr. Newman was also
entitled to rights similar to those described above. Subsequent to the
Acquisition, Mr. Newman resigned from his positions at the Corporation, and his
rights under the Employment Agreement were terminated pursuant to a Separation
Agreement described below.

      In June 1999, Frank N. Newman, former Chairman of the Board and Chief
Executive Officer of the Corporation, terminated his Employment Agreement with
the Corporation. In connection therewith, Mr. Newman and the Corporation entered
into a Separation Agreement (the "Separation Agreement"), the princi-pal terms
of which provided for, in addition to long-term incentive plan payouts described
under "Summary Compensation Table" to Mr. Newman, cash payments and other
benefits having a value of approximately $57 million. The Corporation also
agreed to honor its obligations with respect to excise taxes on the payments
under the Employment Agreement described above, and to continue certain health
and similar benefits for a period of time.

      In February 2000, Mary Cirillo resigned, effective March 1, 2000. In
connection with such resignation, Ms. Cirillo entered into a Solicitation and
Consulting Agreement with Deutsche Bank, the principal terms of which provided
for a payment of $17 million (the total of the annual payments remaining due
under the Employment Agreement) and the continued deferral of certain other
amounts payable pursuant to her Employment Agreement described above. Deutsche
Bank also agreed to continue certain health and welfare benefits for a period of
time. Ms. Cirillo agreed to act as a consultant for a twelve-month period
following the termination date.

Change of Control Agreements

Pursuant to the Corporation's Change of Control Severance Plan I, upon
termination of employment by the Corporation without "Cause" or by the executive
officer for "Good Reason" (as such terms are defined in the Change of Control
Severance Plan) during the two-year period immediately following a "Change of
Control" of the Corporation (as defined below), each of the named executive
officers would be entitled to receive a severance benefit equal to three times
the sum of his base salary and the greater of average


76 Bankers Trust Corporation and its Subsidiaries
<PAGE>

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annual bonus paid during the three-year period immediately preceding the Change
of Control or annual bonus paid in the year immediately preceding the Change of
Control. Such severance benefits may not exceed $7.5 million per employee. Under
the Corporation's stock option and stock award plans, upon a Change of Control,
all Stock Options become exercisable and all deferred stock, restricted stock
and other stock-based awards become vested and immediately payable. Similarly,
upon a Change of Control, the POPI and POP II units become vested and
immediately payable.

      A Change of Control is defined generally as (i) the acquisition of 20% or
more of the outstanding voting securities of the Corporation by an individual,
entity, or group, other than from the Corporation; (ii) a change in the majority
of the board of directors of the Corporation that is not approved by at least a
majority of the current directors and those directors similarly approved
("incumbent directors"); (iii) the consummation of a merger, consolidation, or
similar transaction involving the Corporation, unless immediately following such
transaction:(A) more than 60% of the voting power of the resulting corporation's
voting securities are represented by the Corporation's voting securities that
were outstanding immediately prior to the transaction, (B) no person becomes the
beneficial owner of 20% or more of the outstanding voting securities of the
resulting corporation and (C) at least a majority of the board of directors of
the resulting corporation were incumbent directors of the Corporation at the
time of the approval of the transaction by the Corporation's board of directors;
or (iv) the sale or disposition of all or substantially all of the assets of the
Corporation or a liquidation of the Corporation.

      In the event any of the named executive officers is subject to the 20%
excise tax under Section 4999 of the Code, such individual would be reimbursed
in an amount sufficient to offset such excise tax unless such reimbursement
could be avoided by reducing the severance payments received by the named
executive officer by an amount that is less than 10% of his severance payments.
The Change of Control Severance Policy also provides that, contingent on a
Change of Control, the named executive officers would be entitled to certain
welfare benefits for up to three years following termination.

      The foregoing benefits were generally replaced by, and certain amounts
payable thereunder were deferred pursuant to, the Employment Agreements referred
to above.

Pension Plan

Effective January 1, 1999, the Corporation's tax-qualified defined benefit
pension plan was amended to: (i) convert to a cash balance plan (a type of
defined benefit plan) for employees active on December 31, 1998. Opening
balances were established based upon participants' December 31, 1998 accrued
pension benefit plus, in certain cases based on age and length of service, 5
percent, GAM83 unisex mortality tables and the thirty (30) year Treasury bond
rate for November, 1998. Special transition rules were used for participants
eligible to retire under the prior plan and for participants age 50 or greater
or whose age and service equaled 60 or greater. Participant cash balance
accounts increase through annual Pay Credits (a percentage of base pay, up to
the IRS limit, based on age) and monthly Interest Credits (based on the one (1)
year Treasury bill rate for the November of the prior year plus 1 percent); (ii)
change the vesting schedule to 25 percent vested after three (3) years, 50
percent after four (4) years and 100 percent after five (5) years of service;
and (iii) include former Alex. Brown employees as participants in the Plan
effective January 1, 1999 with eligibility (vesting) service from their original
date of hire.

      At December 31, 1999, cash balances for Messrs. de Balmann, Shattuck,
McLauchlan and Ms. Cirillo were $245,874, $11,200, $322,112 and $24,488,
respectively.


                               Bankers Trust Corporation and its Subsidiaries 77
<PAGE>

--------------------------------------------------------------------------------

Form 10-K Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 30, 2000.

Bankers Trust Corporation

                   By /S/ JAMES T. BYRNE, JR.
                      ----------------------------------------------------------
                      (James T. Byrne, Jr., Senior Vice President and Secretary)

--------------------------------------------------------------------------------

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 30, 2000.

DR. JOSEF ACKERMANN*                    Chairman of the Board,
---------------------------             Chief Executive Officer
(Dr. Josef Ackermann)                   and Director (Principal
                                        Executive Officer)


DOUGLAS R. BARNARD*                     Chief Financial Officer
---------------------------             (Principal Financial Officer)
(Douglas R. Barnard)


RONALD HASSEN*                          Senior Vice President and
---------------------------             Controller (Principal
(Ronald Hassen)                         Accounting Officer)


HANS H. ANGERMUELLER*                   Director
---------------------------
(Hans H. Angermueller)


GEORGE B. BEITZEL*                      Director
---------------------------
(George B. Beitzel)


MICHAEL DOBSON*                         Director
---------------------------             (elected a Director effective 2/24/2000)
(Michael Dobson)


WILLIAM R. HOWELL*                      Director
---------------------------
(William R. Howell)


HERMANN-JOSEF LAMBERTI*                 Director
---------------------------
(Hermann-Josef Lamberti)


JOHN A. ROSS*                           President and Director
---------------------------
(John A. Ross)


DR. RONALDO H. SCHMITZ*                 Director
---------------------------
(Dr. Ronaldo H. Schmitz)


*By /S/ JAMES T. BYRNE, JR.
---------------------------
    (James T. Byrne, Jr., Attorney-in-Fact)


78 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    EXHIBITS

                                       TO

                                   FORM 10-K

                                  Filed Under

                      THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                           BANKERS TRUST CORPORATION


79 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

                           BANKERS TRUST CORPORATION

                           EXHIBIT INDEX TO FORM 10-K

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

3. Articles of Incorporation and By-laws, as amended
      (i)   Restated Certificate of Incorporation of the Registrant
            filed with the State of New York on June 4, 1999                  *
      (ii)  By-laws as in effect June 22, 1999                                *

4. Instruments Defining the Rights of Security Holders, Including Indentures
      (ii)  Long-Term Debt Indentures                                         1

10. Material Contracts
      (ii)  (D)   Leases for Principal Premises Described on Page 70
                  Lease Agreement relating to the seven stories of a
                  37-story building located at 14-16 Wall Street             (2)
                  Lease Agreement relating to the eight-story building
                  located in Jersey City, New Jersey                         (3)
                  Lease Agreement relating to the eight-story building
                  located in London, England                                 (4)
                  Lease Agreement relating to the three-story building in
                  Nashville, Tennessee                                       (5)
                  Lease abstract relating to Four World Trade Center,
                  New York                                                  (16)


                               Bankers Trust Corporation and its Subsidiaries 80

<PAGE>

--------------------------------------------------------------------------------

      (iii) (A)   Management Contracts and Compensation Plans
                  (1)   Employment Contract for Frank N. Newman             (11)
                  (2)   Severance agreement with B.J. Kingdon               (12)
                  (3)   Employment agreements in connection with the
                        Agreement and Plan of Merger between Bankers
                        Trust and Deutsche Bank
                        (a)   Frank N. Newman                               (16)
                        (b)   Mary Cirillo                                  (16)
                        (c)   Mayo A. Shattuck III                          (16)
                        (d)   Yves C. de Balmann                            (16)
                  (4)   1994 Stock Option and Stock Award Plan               (7)
                  (5)   1991 Stock Option and Stock Award Plan               (8)
                  (6)   1985 Stock Option and Stock Award Plan               (9)
                        January, 1989 amendments thereto                     (6)
                  (7)   Additional Capital Accumulation Plan                (10)
                  (8)   The Supplemental Executive Retirement Plan           (4)
                  (9)   Deferred Compensation Plan for Directors             (1)
                  (10)  January, 1989 amendments to the Deferred
                        Compensation Plan for Directors and The
                        Supplemental Executive Retirement Plan               (7)
                  (11)  Partnership for One-Hundred Plan II                 (13)
                  (12)  Bankers Trust New York Corporation                  (16)
                        Change in Control Severance Plan I
                  (13)  Split Dollar Insurance Agreement                    (14)
                  (14)  Alex. Brown Incorporated 1996 Equity Incentive
                        Plan                                                (14)
                  (15)  Stock Option Agreement, dated as of November
                        30, 1998 between Bankers Trust Corporation and
                        Deutsche Bank A.G.                                  (15)

12. Statements Re Computation of Ratios
      Computation of Consolidated Ratios of Earnings to Fixed Charges        83
      Computation of Consolidated Ratios of Earnings to Combined Fixed
      Charges and Preferred Stock Dividend Requirements                      84

21. Subsidiaries of the Registrant                                           85

23. Consents of Experts                                                      86

24. Power of Attorney                                                        87

27. Financial Data Schedule                                                   *

99. Additional Exhibits
      Unaudited Pro Forma Condensed Financial Statements for the year
      ended December 31, 1999                                                89

* Filed herewith.

(NOTE: FOOTNOTE REFERENCES FOR THIS INDEX APPEAR ON THE NEXT PAGE.)


81 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

                            BANKERS TRUST CORPORATION
     EXHIBIT INDEX TO FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                               FOOTNOTE REFERENCES

(1)   This document is incorporated by reference from Bankers Trust
      Corporation's Form 8-K dated November 10, 1995, file number 1-5920.

(2)   This document is incorporated by reference from Bankers Trust
      Corporation's Form 10-K for the year ended December 31, 1986, file number
      1-5920.

(3)   This document is incorporated by reference from Bankers Trust
      Corporation's Form 10-K for the year ended December 31, 1983, file number
      1-5920.

(4)   This document is incorporated by reference from Bankers Trust
      Corporation's Form 10-K for the year ended December 31, 1987, file number
      1-5920.

(5)   This document is incorporated by reference from Bankers Trust
      Corporation's Form 10-K for the year ended December 31, 1992, file number
      1-5920.

(6)   This document is incorporated by reference from Bankers Trust
      Corporation's Form 10-K for the year ended December 31, 1993, file number
      1-5920.

(7)   This document is incorporated by reference from Bankers Trust
      Corporation's Registration Statement on Form S-8 (No. 33-54971) as filed
      on August 9, 1994.

(8)   This document is incorporated by reference from Bankers Trust
      Corporation's Registration Statement on Form S-8 (No. 33-41014) as filed
      on June 10, 1991.

(9)   This document is incorporated by reference from Bankers Trust
      Corporation's Proxy Statement dated as of March 21, 1988, file number
      1-5920.

(10)  This document is incorporated by reference from Bankers Trust
      Corporation's Form 10-K for the year ended December 31, 1989, file number
      1-5920.

(11)  This document is incorporated by reference from Bankers Trust
      Corporation's Form 10-K for the year ended December 31, 1995, file number
      1-5920.

(12)  This document is incorporated by reference from Bankers Trust
      Corporation's Form 10-Q dated May 15, 1997, file number 1-5920.

(13)  This document is incorporated by reference from Bankers Trust
      Corporation's Form 10-Q dated August 14, 1997, file number 1-5920.

(14)  This document is incorporated by reference from Bankers Trust
      Corporation's Form 10-Q dated November 14, 1997, file number 1-5920.

(15)  This document is incorporated by reference from Bankers Trust
      Corporation's Form 8-K dated November 30, 1998, file number 1-5920.

(16)  This document is incorporated by reference from Bankers Trust
      Corporation's Form 10-K for the year ended December 31, 1998.


                               Bankers Trust Corporation and its Subsidiaries 82
<PAGE>

--------------------------------------------------------------------------------

                                                                   EXHIBIT 12(a)

                   BANKERS TRUST CORPORATION AND SUBSIDIARIES
        COMPUTATION OF CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

                             (dollars in millions)

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
-----------------------------------------------------------------------------------------------------------------
                                                                   1995     1996     1997       1998       1999
-----------------------------------------------------------------------------------------------------------------
<S>                                                               <C>      <C>      <C>        <C>        <C>
Earnings:
 1. Income (loss) before income taxes                             $  469   $1,131   $ 1,239    $   (77)   $(1,415)
 2. Add: Fixed charges excluding capitalized interest (Line 10)    5,138    5,483     5,959      6,954      3,654
 3. Less: Equity in undistributed income of unconsolidated
      subsidiaries and affiliates                                     28       30      (117)        15         75
-----------------------------------------------------------------------------------------------------------------
 4. Earnings including interest on deposits                        5,579    6,584     7,315      6,862      2,164
 5. Less: Interest on deposits                                     1,360    1,355     2,076      2,195      1,424
-----------------------------------------------------------------------------------------------------------------
 6. Earnings excluding interest on deposits                       $4,219   $5,229   $ 5,239    $ 4,667        740
=================================================================================================================
Fixed Charges:
 7. Interest expense                                              $5,105   $5,451   $ 5,926    $ 6,919    $ 3,612
 8. Estimated interest component of net rental expense                33       32        33         35         42
 9. Amortization of debt issuance expense                             --       --        --         --         --
-----------------------------------------------------------------------------------------------------------------
10. Total fixed charges including interest on deposits and
      excluding capitalized interest                               5,138    5,483     5,959      6,954      3,654
11. Add: Capitalized interest                                         --       --        --         --         --
-----------------------------------------------------------------------------------------------------------------
12. Total fixed charges                                            5,138    5,483     5,959      6,954      3,654
13. Less: Interest on deposits (Line 5)                            1,360    1,355     2,076      2,195      1,424
-----------------------------------------------------------------------------------------------------------------
14. Fixed charges excluding interest on deposits                  $3,778   $4,128   $ 3,883    $ 4,759      2,230
=================================================================================================================
Consolidated Ratios of Earnings to Fixed Charges:
Including interest on deposits (Line 4/Line 12)                     1.09     1.20      1.23        .99        N/A
=================================================================================================================
Excluding interest on deposits (Line 6/Line 14)                     1.12     1.27      1.35        .98        N/A
=================================================================================================================
</TABLE>

For the years ended December 31, 1999 and 1998, earnings, as defined, did not
cover fixed charges, including and excluding interest on deposits by $1,490
million and $92 million, respectively, as a result of a net loss recorded during
the period.

N/A--Not Applicable.


83 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

                                                                   EXHIBIT 12(b)

                   BANKERS TRUST CORPORATION AND SUBSIDIARIES
        COMPUTATION OF CONSOLIDATED RATIOS OF EARNINGS TO COMBINED FIXED
               CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS

                             (dollars in millions)

<TABLE>
<CAPTION>
                                                                                        Year Ended December 31,
-------------------------------------------------------------------------------------------------------------------------------
                                                                             1995      1996      1997        1998        1999
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>       <C>       <C>         <C>         <C>
Earnings:
 1. Income (loss) before income taxes                                       $  469    $1,131    $ 1,239     $   (77)    $(1,415)
 2. Add: Fixed charges excluding capitalized interest (Line 13)              5,138     5,483      5,959       6,954       3,654
 3. Less: Equity in undistributed income of unconsolidated
      subsidiaries and affiliates                                               28        30       (117)         15          75
-------------------------------------------------------------------------------------------------------------------------------
 4. Earnings including interest on deposits                                  5,579     6,584      7,315       6,862       2,164
 5. Less: Interest on deposits                                               1,360     1,355      2,076       2,195       1,424
-------------------------------------------------------------------------------------------------------------------------------
 6. Earnings excluding interest on deposits                                 $4,219    $5,229    $ 5,239     $ 4,667         740
===============================================================================================================================
Preferred Stock Dividend Requirements:
 7. Preferred stock dividend requirements                                   $   51    $   51    $    49     $    32          23
 8. Ratio of income (loss) from continuing operations before income taxes
      to income (loss) from continuing operations after income taxes           151%      148%       143%        105%         88%
-------------------------------------------------------------------------------------------------------------------------------
 9. Preferred stock dividend requirements on a pretax basis                 $   77    $   75    $    70     $    34          20
===============================================================================================================================
Fixed Charges:
10. Interest Expense                                                        $5,105    $5,451    $ 5,926     $ 6,919     $ 3,612
11. Estimated interest component of net rental expense                          33        32         33          35          42
12. Amortization of debt issuance expense                                       --        --         --          --          --
-------------------------------------------------------------------------------------------------------------------------------
13. Total fixed charges including interest on deposits and
      excluding capitalized interest                                         5,138     5,483      5,959       6,954       3,654
14. Add: Capitalized interest                                                   --        --         --          --          --
-------------------------------------------------------------------------------------------------------------------------------
15. Total fixed charges                                                      5,138     5,483      5,959       6,954       3,654
16. Add: Preferred stock dividend requirements--pretax (Line 9)                 77        75         70          34          20
-------------------------------------------------------------------------------------------------------------------------------
17. Total combined fixed charges and preferred
      stock dividend requirements on a pretax basis                          5,215     5,558      6,029       6,988       3,674
18. Less: Interest on deposits (Line 5)                                      1,360     1,355      2,076       2,195       1,424
-------------------------------------------------------------------------------------------------------------------------------
19. Combined fixed charges and preferred stock dividend requirements
      on a pretax basis excluding interest on deposits                      $3,855    $4,203    $ 3,953     $ 4,793       2,250
===============================================================================================================================
Consolidated Ratios of Earnings to Combined Fixed Charges and
      Preferred Stock Dividend Requirements:
Including interest on deposits (Line 4/Line 17)                               1.07      1.18       1.21         .98         N/A
===============================================================================================================================
Excluding interest on deposits (Line 6/Line 19)                               1.09      1.24       1.32         .97         N/A
===============================================================================================================================
</TABLE>

For the years ended December 31, 1999 and 1998, earnings, as defined, did not
cover fixed charges and preferred stock dividend requirements, including and
excluding interest on deposits, by $1,510 million and $126 million,
respectively, as a result of a net loss recorded during the period.

N/A--Not Applicable.


                               Bankers Trust Corporation and its Subsidiaries 84
<PAGE>

--------------------------------------------------------------------------------

                                                                      EXHIBIT 21

                           BANKERS TRUST CORPORATION
                         SUBSIDIARIES OF THE REGISTRANT
                               DECEMBER 31, 1999

         Subsidiary(1)                    State of Incorporation
         -------------                    ----------------------
         Bankers Trust Company                  New York
         BT Holdings (NY) Inc.                  New York

All other subsidiaries of the Corporation, in the aggregate, would not
constitute a significant subsidiary, as defined.

(1)   Subsidiaries' names listed hereon are names under which such subsidiaries
      do business.


85 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

                                                                    EXHIBIT 23.1

                        CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements
(Form S-3 Nos. 33-13278, 33-58340, 33-50395, 33-51615, 33-65301, 333-15089,
333-15089-01 through -04, 333-32909, Form S-4 Nos. 333-22733, 333-22733-01 and
Form S-8 Nos. 333-12181, 333-19963, 333-57427 and 333-74999) of our report dated
February 25, 2000, with respect to the consolidated balance sheet of Bankers
Trust Corporation and Subsidiaries (a wholly owned indirect subsidiary of
Deutsche Bank AG) as of December 31, 1999 and 1998, and the related consolidated
statements of income, changes in stockholders' equity, comprehensive income and
cash flows for each of the years in the three-year period ended December 31,
1999, which report appears in the December 31, 1999 Annual Report on Form 10-K
of Bankers Trust Corporation.


                                        /S/ KPMG LLP
                                            ------------------------------------
                                            KPMG LLP

New York, New York
March 28, 2000


                               Bankers Trust Corporation and its Subsidiaries 86

<PAGE>

--------------------------------------------------------------------------------

                                                                      Exhibit 24

                               POWER OF ATTORNEY

      KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and
officers of Bankers Trust Corporation hereby constitute and appoint Dr. Josef
Ackermann, John A. Ross, James T. Byrne, Jr., Douglas R. Barnard and Troland S.
Link, or any one of them, their true and lawful attorney or attorneys and agent
or agents, with the power and authority to sign the names of the undersigned to
the Annual Report on Form 10-K for the year 1999 of Bankers Trust Corporation
pursuant to Section 13 of the Securities and Exchange Act of 1934 and any
amendments thereto and each of the undersigned does hereby ratify and confirm
all that said attorney or attorneys and agent or agents or any one of them shall
do or cause to be done by virtue hereof.

      IN WITNESS WHEREOF, each of the undersigned has subscribed these presents.

March 23, 2000                          Bankers Trust Corporation


                                        By /S/ DR. JOSEF ACKERMANN
                                               ---------------------------------
                                               Dr. Josef Ackermann
                                               Chairman of the Board


/S/ DR. JOSEF ACKERMANN
    ------------------------------------
    Dr. Josef Ackermann
    Chairman of the Board,
    Chief Executive Officer and Director
    (Principal Executive Officer)


/S/ DOUGLAS R. BARNARD
    ------------------------------------
    Douglas R. Barnard
    Chief Financial Officer
    (Principal Financial Officer)


/S/ RONALD HASSEN
    ------------------------------------
    Ronald Hassen
    Senior Vice President and Controller
    (Principal Accounting Officer)


87 Bankers Trust Corporation and its Subsidiaries
<PAGE>

--------------------------------------------------------------------------------

                                                                  March 23, 2000


/S/ HANS H. ANGERMUELLER
    ---------------------------------------------------
    Hans H. Angermueller                       Director


/S/ GEORGE B. BEITZEL
    ---------------------------------------------------
    George B. Beitzel                          Director


/S/ MICHAEL DOBSON
    ---------------------------------------------------
    Michael Dobson                             Director
    (elected a Director effective 2/24/2000)


/S/ WILLIAM R. HOWELL
    ---------------------------------------------------
    William R. Howell                          Director


/S/ HERMANN-JOSEF LAMBERTI
    ---------------------------------------------------
    Hermann-Josef Lamberti                     Director


/S/ JOHN A. ROSS
    ---------------------------------------------------
    John A. Ross                 President and Director


/S/ DR. RONALDO H. SCHMITZ
    ---------------------------------------------------
    Dr. Ronaldo H. Schmitz                     Director


                               Bankers Trust Corporation and its Subsidiaries 88