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Wednesday, 16 April 2008

Lehman Brothers CEO joins other bankers in saying worst of credit crisis over

NEW YORK - LEHMAN Brothers Holdings Chief Executive Richard Fuld joined a growing chorus of investment bank executives in saying on Tuesday that the worst of the credit crisis is behind Wall Street.

Mr Fuld, speaking at the investment bank's annual shareholder meeting, said that credit markets have begun to ease but still believes the environment 'will remain challenging.'

Steep losses tied to mortgage-backed securities has cost the world's biggest banks and brokerage about US$200 billion (S$271 billion) since last year.

Similar comments came last week from two other investment bank CEOs - Goldman Sachs Group's Lloyd Blankfein and Morgan Stanley's John Mack. Both said during shareholder meetings that Wall Street is closer to the end of the crisis, and that it might last a few more quarters.

Lehman Brothers, the nation's fourth-largest investment bank, raised about US$4 billion from a stock sale earlier this month to help boost capital levels.

The securities firm also announced in a regulatory filing on April 9 that it liquidated three funds with assets of about US$1 billion during the first quarter because of 'market disruptions.'

There had been concerns that other investment banks might be having financial problems after Bear Stearns nearly collapsed in March. The Federal Reserve later engineered a bailout for Bear Stearns by helping the company be sold to JPMorgan Chase.

Lehman has avoided major losses compared to its larger rivals.

Investors might get a better glimpse about the state of the credit markets with first-quarter earnings reports expected from JPMorgan on Wednesday, Merrill Lynch on Thursday and Citigroup on Friday.

Shares in Lehman fell 18 cents to US$39.20 on Tuesday, and are down about 40 per cent for the year. -- AP

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