Lehman Bros profits slump 60%

LEHMAN BROTHERS, the Wall Street investment house that has been the subject of repeated takeover speculation, saw profits slump 60 per cent to $74m in the fourth quarter of last year, compared with $185m in the last three months of 1997. The sharply lower figure, announced by chairman Richard Fuld (pictured) compares adversely with the $879m notched up in the period by US rival Morgan Stanley Dean Witter, 9 per cent ahead of the year before.

The discrepancy is due in part to Morgan Stanley's lower exposure to both emerging markets and to fixed income, areas where Lehman continues to be hit hard. Analysts point out that both houses reported profits above expectations, reflecting the sharp recovery in stock markets after September's collapse.