Lehman Bros posts record profits

Lehman Bros is one of Wall Street's few independent investment banks

One of Wall Street's few remaining independent investment banks, Lehman Brothers, has reported that profits for the fiscal year 2000 jumped by a record 57%, led by record fees for merger advice.

The company reported income after tax rose by $1.78bn (£1.19bn) last year, compared with $1.13bn after tax in 1999.

Earnings for September-November 2000 were also up by 33%, beating analysts estimates, with $399m profits in their final quarter.

"This was a terrific year for Lehman brothers as we set new records for revenues," said Richard S Fuld Jr., chairman and chief executive officer of the bank.

"Our results clearly demonstrate that the firm is among the top performers in the industry," he added.

The 150-year-old global investment bank built its name on trading bonds, but recently it has shifted its focus overseas to lucrative businesses such as stock trading and advising companies on mergers.

It has a network of 44 offices worldwide, with some 10,000 employees. Almost half of the bank's revenues are generated outside the US.

Analysts are predicting that these latest sets of results could leave Lehman Brothers an attractive takeover target for an international bank.

Global mergers

Banking has recently seen a series of global mergers, as banks line up to compete in an industry shaken by the growth of internet banking and globalisation.

In September, US banking giant Chase Manhattan took over JP Morgan, formerly one of Wall Street's few remaining independent investment banks.

And in September too, Dresdner Bank, Germany's third largest, gobbled up US investment bank Wasserstein Perella for $1.37bn.

UBS, a Swiss banking giant, paid $11bn for Paine Webber.

Lehman's shares jumped $1 to $77 in early trading Thursday on the New York Stock Exchange, just short of its 52-week high of around $80, valuing the firm at $18.4bn.