Report of Independent Accountants on
Applying Agreed-Upon Procedures
Providian National Bank, as Seller and Servicer
and
Bankers Trust company, as Trustee
Providian Master Trust
We have performed the procedures enumerated below, which were agreed to by
Providian National Bank and Bankers Trust Company, solely to assist you with
respect to Article III, Sections 3.06(a) and 3.06(b), of the Pooling and
Servicing Agreement dated as of June 1, 1993, as amended and supplemented (the
"Agreement") between Providian National Bank, as Seller and Servicer, and
Bankers Trust Company, as Trustee. This engagement to apply agreed-upon
procedures was performed in accordance with standards established by the
American Institute of Certified Public Accountants. The sufficiency of the
procedures is solely the responsibility of Providian National Bank and Bankers
Trust Company. Consequently, we make no representation regarding the
sufficiency of the procedures described below either for the purpose for which
this report has been requested or for any other purpose.
Our procedures were as follows:
1. We inquired of Servicer management as to whether separate Collection
Accounts were maintained by the Trustee during 1999 in accordance with the
terms of the Agreement. We were informed that separate collection accounts
were maintained by the Trustee during 1999 (Article IV Section 4.02 of the
Agreement).
2. We selected a sample of six business days ("Selected Days") from the period
October 1, 1998 through December 31, 1999 (March 1, March 5, March 8, May
3, May 6, and May 10) and performed the following (Article III Sections
3.01 and 3.04 and Article IV Sections 4.02 and 4.03 of the Agreement):
a. We obtained the corresponding day's Transfer of Funds Notice ("TFN")
as prepared by Providian National Bank.
b. We compared the wire amount as set forth in the TFN to the
corresponding amount in the caption "Investor Finance Charge and Fee
Collections" contained in the Collection Data Report, as prepared by
the Servicer, and found the amounts to be in agreement.
c. We compared the total finance charge collections, gross fee, and
principal collections for the Selected Days from the Collection Data
Report, prepared by the Servicer, to the Agent Bank Summary Report
("ABS"), which is prepared by Providian National Bank's third party
bank card processor, Total System Services, Inc. ("TSYS"), and found
the amounts to be in agreement.
d. We compared the collection date for the days selected per the
Collection Data Report to the corresponding TFN to determine that the
wire transfers occurred no later than three business days after the
collection date. No exceptions were noted.
e. For the Selected Days, we recalculated all mathematical calculations
contained in the Collection Data Report. No exceptions were noted.
3. We obtained Monthly Servicer's Certificates and the Monthly Statements for
all Series issued for all months from October 1998 through December 1999.
We noted that the Certificates were signed by an authorized officer, and
that management asserted that no Pay Out Event had occurred.
4. For the months of October 1998 through December 1999 for Series 1993-3,
1995-1, 1996-1, 1997-1, 1997-2, 1997-3, 1997-4, 1998-1, for the months of
July 1999 through December 1999 for Series 1999-1, and for the months of
October 1999 through December 1999 for Series 1999-2 we obtained Monthly
Statements prepared by Providian National Bank and performed the following
(Article III Section 3.04 and Article IV Sections 4.03 and 4.04 of the
Agreement):
a. For the month of February for Series 1993-3, 1995-1, 1996-1, 1997-1,
1997-2, 1997-3, 1997-4, 1998-1, for the month of April for Series
1993-3, for the month of August 1999 for Series 1999-1, and for the
month of November 1999 for Series 1999-2, we recalculated all
mathematical calculations in the Monthly Statements and compared the
related Trust activity amounts reported in the Monthly Statements to
the amounts reported in TSYS reports, third party statements, and
reports prepared by officers and employees of Providian National Bank.
No exceptions were noted.
b. We recomputed the mathematical calculation that determines the
investor and seller portions (Article III Section 3.04 and Article IV
Sections 4.03 and 4.04 of the Agreement). No exceptions were noted.
5. We obtained direct confirmation of the Servicer's fidelity bond coverage
insuring against losses in the aggregate amount of $60,000,000 through
wrongdoing of its officers and associates who are involved in the servicing
of receivables. The insurer stated that the coverage is currently
maintained and was in force throughout 1999.
6. We inquired of Servicer personnel responsible for investments in the
Collection Account. The Servicer personnel informed us that deposits in the
Collection Account were invested in Eligible Investments only, as defined
in Article I of the Agreement (Article IV Section 4.02 of the Agreement).
7. The Servicer provided us with written representation that no Pay Out Event,
as the term is defined in Article I the Agreement, occurred during the
period from October 1, 1998 through December 31, 1999 for any series during
its revolving period (Article IX Section 9.01).
8. We obtained written representation from management of Providian National
Bank that, to the best of their knowledge, Providian National Bank has
recorded all material transactions properly relating to the Agreement, and
Providian National Bank has complied with all material aspects of the
Agreement (Articles III and IV and Section 8.08 of the Agreement).
9. We obtained copies of the Annual Servicer's Certificate and compared the
form of the Annual Servicer's Certificate to Exhibit D of the Agreement
(Article III Section 3.05 of the Agreement). No exceptions were noted.
We were not engaged to and did not perform an examination, the objective of
which would be the expression of an opinion on the Servicer's compliance with
the terms and conditions set forth in Articles III and IV and Sections 8.08 and
9.01 of the Agreement and the applicable provisions of each supplement, the
monthly certificates for each series included in the Trust delivered pursuant
to Section 3.04(b) of the Agreement, or on the reports prepared by the
Servicer. Accordingly, we do not express such an opinion. Had we performed
additional procedures with respect to Servicer's compliance with the terms and
conditions set forth in Articles III and IV and Sections 8.08 and 9.01 of the
Agreement and the applicable provisions of each supplement, the monthly
certificates for each series included in the Trust delivered pursuant to
Section 3.04(b) of the Agreement, or on the reports prepared by the Servicer
which were the source of such amounts, other matters might have come to our
attention that would have been reported to you.
This report is intended solely for the use and information of Providian
National Bank and Bankers Trust Company and should not be used by those who
have not agreed to the procedures and taken responsibility for the sufficiency
of the procedures for their purposes.
/s/ Ernst & Young LLP
March 10, 2000
Report of Independent Accountants
Board of Directors
Providian National Bank
Providian Master Trust
We have examined management's assertion that its controls over the functions
performed as servicer of the Providian Master Trust ("Trust") are effective,
during the year ended December 31, 1999, in providing reasonable assurance that
Trust assets are safeguarded against loss from unauthorized use or disposition
and that transactions are executed in accordance with management's
authorization in conformity with the Pooling and Servicing Agreement dated as
of June 1, 1993, as amended and supplemented (the "Agreement"), between
Providian National Bank, as Seller and Servicer, and Bankers Trust Company, as
Trustee, and are recorded properly to permit the preparation of the required
financial reports. Management is responsible for Providian National Bank's
controls over compliance with those requirements. Our responsibility is to
express an opinion on management's assertion based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
obtaining an understanding of the controls over the functions performed by
Providian National Bank as Servicer of the Trust, testing and evaluating the
design and operating effectiveness of those controls, and such other procedures
as we considered necessary in the circumstances. We believe that our
examination provides a reasonable basis for our opinion.
Because of inherent limitations in any controls, errors or fraud may occur and
not be detected. Also, projections of any evaluation of the controls over the
functions performed by Providian National Bank as Servicer of the Trust to
future periods are subject to the risk that the controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
controls may deteriorate.
In our opinion, management's assertion, that it believes that, during the year
ended December 31, 1999, Providian National Bank's controls over the functions
performed as Servicer of the Trust are effective in providing reasonable
assurance that Trust assets are safeguarded against loss from unauthorized use
or disposition, and that transactions are executed in accordance with
management's authorization in conformity with the Agreement, and are recorded
properly to permit the preparation of the required financial reports, is fairly
stated, in all material respects, based upon the following criteria specified
in management's report:
o Controls provide reasonable assurance that funds collected are
appropriately remitted to the Trustee in accordance with the Agreement.
o Controls provide reasonable assurance that Trust assets are segregated from
those assets retained by Providian National Bank in accordance with the
Agreement.
o Controls provide reasonable assurance that expenses incurred by the Trust
are properly calculated and remitted in accordance with the Agreement.
o Controls provide reasonable assurance that additions of accounts to the
Trust are authorized in accordance with the Agreement.
o Controls provide reasonable assurance that removals of accounts from the
Trust are authorized in accordance with the Agreement.
o Controls provide reasonable assurance that Trust principal collections used
to amortize investor's certificates are calculated in accordance with the
Agreement.
o Controls provide reasonable assurance that Monthly Statements and Payment
Instructions provided to the Trustee are reviewed by management prior to
delivery.
o Controls provide reasonable assurance that Monthly Statements and Payment
Instructions contain information required by the Agreement.
This report is intended solely for your information. However, this report is a
matter of public record as a result of being included as an exhibit to the
report on Form 10-K prepared by Providian National Bank and filed with the
Securities and Exchange Commission on behalf of the Providian Master Trust and
its distribution is not limited.
/s/ Ernst & Young LLP
March 10, 2000
Report of Independent Accounts
Providian National Bank
and
Bankers Trust company
Providian Master Trust
We have examined management's assertion that Providian National Bank complied
with the relevant terms and conditions of Articles III and IV, and Sections 8.08
and 9.01 of the Pooling and Servicing Agreement, as amended and supplemented
(the "Agreement"), dated as of June 1, 1993 between Providian National Bank, as
Seller and Servicer, and Bankers Trust Company, as Trustee, during the year
ended December 31, 1999. Management is responsible for Providian National
Bank's compliance with those requirements. Our responsibility is to express an
opinion on Providian National Bank's compliance based on our examination.
Our examination was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accounts and,
accordingly, included examining, on a test basis, evidence about Providian
National Bank's compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances. We believe that our
examination provides a reasonable basis for our opinion. Our examination does
not provide a legal determination of Providian National Bank's compliance with
specified requirements.
In our opinion, Providian National Bank complied in all material respects, with
the aforementioned requirements during the year ended December 31, 1999.
This report is intended solely for the information and use of Providian National
Bank and Bankers Trust Company and is not intended to be and should not be used
by anyone other than these specified parties.
/s/ Ernst & Young LLP
March 10, 2000