Valuation reductions hit Lehman Brothers for $700m
Lehman Brothers yesterday unveiled it suffered a revenue decline of $700 million due to a reduction in its valuations for fixed-income assets. This reduction in valuation was felt most keenly by the US securities dealer's leveraged loan commitments and residential mortgage-backed positions.
The remarking of fixed-income positions dragged Lehman Brothers third-quarter fixed-income net revenues down by 47%, to $1.1 billion, compared with the same period in 2006. However, the securities dealer’s overall net income of $887 million for the quarter was higher than analyst expectations.
Lehman Brothers said its valuation reduction was “partially offset” by “large valuation gains on economic hedges and other liabilities”. But the firm failed to provide further details.
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