NOTHING LIKE KICKING A bank when it's down. Two months after Bankers Trust New York reported a $157 million first-quarter loss, Moody's Investors Service announced it was lowering its rating one notch. The company's shares fell as much as 11/4 on news of the cut, its second this year. Moody's delayed the action to analyze the bank's profitability, says Managing Director Christopher Mahoney. The conclusion: While one-time events such as unfavorable trading markets were a major cause of the loss, well-publicized client departures and lawsuits related to Bankers Trust derivatives have hurt them, too. "There has been some franchise damage," Mahoney says.

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