N.Y. Bank to Post Loss of $125 Million : Finance: Bankers Trust’s first-quarter report reflects Latin trading losses, drop in derivatives revenues.

Bankers Trust New York Corp. said Friday it expects to report an after-tax loss of up to $125 million or around $1.50 per share, in the first quarter due to trading losses in Latin America and a sharp drop in derivatives revenues.

The loss would be one of the first in recent years by an American bank, contrasting sharply with record profits for many other institutions, boosted by higher interest rate margins and increased loan demand.

The estimated loss by Bankers Trust, the nation’s seventh largest bank, does not take into account a possible charge in connection with the company’s cost-cutting programs.

A bank spokesman declined to say what that cost cutting charge may be.

On Tuesday, Bankers Trust said it will lay off 5% of its 1,200 employees in its global investment banking operation, including its derivatives unit, this week.

Derivatives, financial instruments that are derived from other assets such as stocks, bonds and currencies, have been blamed for huge losses at America’s corporations.

Bankers Trust attributed the expected first-quarter loss to poor market conditions in many Latin American countries, weak demand for risk management products and uncertainty in global financial markets. “Several serious market shocks” have also hurt earnings, it added.

“These adverse factors have created business conditions significantly more difficult than those of the fourth quarter of 1994, resulting in significant declines in many parts of the corporation’s business which, in turn, have negatively impacted earnings,” Bankers Trust said in a statement.

However, Bankers Trust said it has strong capital and reserve positions and a “high quality and very liquid” balance sheet. Combined with its cost-cutting program, these factors “will sustain Bankers Trust through this difficult period,” the company said.

Moody’s Investors Service Inc. said it may downgrade Bankers Trust’s long-term debt, saying the projected loss suggests that the bank’s businesses may be in worse shape than it had previously expected.

Bankers Trust’s stock closed up $1.125 at $61.375 on the New York Stock Exchange.