Top Firm Posts First Loss In 25 Years
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Firm CEO Mark Fetting said that the quarter ended 31st March 'was among the most difficult we have ever faced and we are disappointed with our results. We remain (however) a fundamentally strong firm today, but we know we have work to do'. Legg has set aside some $2bn in the last 6 months to cover potential money market losses, and plans to raise $1bn by way of a preferred share offering.
Bloomberg reports that Commerzbank has posted a 54% fall in first-quarter earnings. Net income came in at $434m, after a further $379m of US subprime lending-related writedowns. Credit crunch-related losses now total some $1.3bn.
The New York Times reports that Lazard has posted a 71% fall in first-quarter profit, which came in at $16m after $28.5m in writedowns in its holdings of corporate debt and losses in its corporate equity portfolio. The firm's vice chairman, Steven Golub, said, however, that: 'We don't think our first-quarter results are representative of what we'll see for the rest of the year'.
Finally, Bloomberg reports that Merrill Lynch has confirmed that its Level 3 (hard-to-value) assets had risen 70% in the first quarter to $82.4bn. The news agency also reports that Wachovia came out Tuesday and said that its first-quarter loss was, in fact, $708m - 80% higher than originally reported last month - after discovering that it needed to take writedowns on life assurance policies for employees. Bloomberg quotes Hill-Townend Capital founder Gary Townsend, who said that this 'paints a picture that they aren't totally in control of their destinies, or their financials'.
