US investment bank Lehman Brothers announced Monday that it expects to post an unprecedented second-quarter loss of 2.8 billion dollars, citing “challenging market conditions”. The bank said it intends to raise six billion dollars through a special stock offering in order to help shore up its balance sheet as it endures its first loss since becoming a public company in 1994.
The investment bank’s earnings have taken a hit due to losses on mortgage-backed securities tied to the US housing slump and because of a related global credit crunch which has roiled Wall Street’s banking industry. “I am very disappointed in this quarter’s results. Notwithstanding the solid underlying performance of our client franchise, we had our first-ever quarterly loss as a public company,” Lehman chairman and chief executive Richard Fuld said. More
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