Lazard stung by revenues slide ahead of float

Lazard, the investment bank, has suffered a sharp drop in revenues and profits at its key advisory business ahead of the group's planned $3bn (£1.55bn) flotation next year.

Figures for the first nine months of this year, included in documents filed with the US Securities and Exchange Commission (SEC), show that net revenue in the financial advisory business declined from $480m in the first nine months of 2003 to $406m in the same period this year.

This led to a collapse in operating income from $204m to just $89.7m.

This decrease meant that total operating income for the entire business fell by a fifth to $196m.

The fall was due to a collapse in revenues from the group's restructuring advisory business. These tumbled from $174m in 2003 to just $51.2m this year.

On the face of it, the figures look like an embarrassment for Bruce Wasserstein, the legendary Wall Street banker who has spent the past three years turning Lazard round in the hope that he could float the business.

Mr Wasserstein has put a lot of emphasis on the advisory side, hiring a number of high-profile bankers on lucrative pay deals.

However, Lazard, which has bases in London, Paris and New York, expects that it will be able to record a good fourth quarter, with revenues coming in from its work on deals including the Parmalat, Eurotunnel and Olympic Airlines restructurings.

In the SEC filing, the group said: "During the fourth quarter of 2004, we have experienced an increased rate of revenue growth in comparison to revenue growth during the first nine months of 2004 - such that we estimate that full year 2004 Mergers and Acquisitions net revenue will be up approximately 13 per cent from 2003."