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| Version 2 | Version 3 |
|---|---|
| Profit falls at Lehman Brothers | Profit falls at Lehman Brothers |
| (10 minutes later) | |
| The US investment bank Lehman Brothers has reported a small fall in three-month profits, but the figures were still better than expected. | The US investment bank Lehman Brothers has reported a small fall in three-month profits, but the figures were still better than expected. |
| Net income between June and August fell 3% to $887m (£445m). | Net income between June and August fell 3% to $887m (£445m). |
| Lehman's boss Richard Fuld said the results showed the bank's diversity and strength under "challenging conditions in the markets". | Lehman's boss Richard Fuld said the results showed the bank's diversity and strength under "challenging conditions in the markets". |
| There is great interest how hard the big American banks have been hit by the sub-prime mortgage crisis. | There is great interest how hard the big American banks have been hit by the sub-prime mortgage crisis. |
| Record defaults | |
| The sub-prime crisis was caused by record levels of defaults by people with poor credit histories or low incomes who had been lent money to buy houses. | The sub-prime crisis was caused by record levels of defaults by people with poor credit histories or low incomes who had been lent money to buy houses. |
| REPORTING BANKS Morgan Stanley - WednesdayBear Stearns - ThursdayGoldman Sachs - Thursday | |
| Last month, Lehman announced it was shutting down its BNC Mortgage sub-prime lending unit and cutting 1,200 jobs. | Last month, Lehman announced it was shutting down its BNC Mortgage sub-prime lending unit and cutting 1,200 jobs. |
| The bank said it recorded "substantial valuation reductions" on certain investments over the three months. | |
| The total valuation adjustments led to a net reduction in revenue of $700m. | |
| Big week | Big week |
| Nonetheless, given the sub-prime problems, the results were expected to be much worse. | |
| "A slight decline is a pretty admirable showing in this environment," said Ned Riley, head of Riley Asset Management in Boston. | "A slight decline is a pretty admirable showing in this environment," said Ned Riley, head of Riley Asset Management in Boston. |
| It is a big week for the top four US investment banks with all of them publishing quarterly results. | It is a big week for the top four US investment banks with all of them publishing quarterly results. |
| The most eagerly-awaited will be Bear Stearns on Thursday. | The most eagerly-awaited will be Bear Stearns on Thursday. |
| The figures will include the period towards the end of June when Bear Stearns had to bail out two of its hedge funds that had got into difficulties because of their exposure to mortgage debt. | The figures will include the period towards the end of June when Bear Stearns had to bail out two of its hedge funds that had got into difficulties because of their exposure to mortgage debt. |