Salomon reports its `worst year'

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The Independent Online
Salomon, the American investment banking giant, announced last night that it had its worst year for more than a decade after unearthing what it described as "material unreconciled balances" in its London operations. These came to light after a re view ofthe company's accounting procedures.

The bank charged $126m against profits as a result, and reported a loss for the whole of last year of $364m, its first annual plunge into the red since it became a public company in 1981.

Salomon said last night that the problems related to interest rate swaps and the interest rate swaps transactions database.

A spokesman said the problems affected the company only. There was no evidence of of any adverse effect on customers, nor of any wrongdoing by any employee.

New York analysts said the most remarkable thing in the company's quarterly report was that the bookeeping errors in London had gone undetected for as long as 10 years.

In November the company said it anticipated that it would be taking charges and a benefit which together would have an insignificant impact on earnings. However, further discoveries of old bookeeping errors in its London operation resulted in a $38m loss.

The bank warned the losses could mean job cuts.