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Last Updated: Thursday, 13 December 2007, 16:07 GMT
Lehman Brothers sees income dip
Lehman Brothers headquarters in New York
Lehman's results were better than expected
Net income at US bank Lehman Brothers fell by a smaller-than-expected 12% in the fourth quarter to $886m (435m).

Net revenues were down 3% at $4.4bn, partly hurt by $830m of bond writedowns, but this was offset by a boom in equity trading.

Lehman, one of the biggest US banks, is seen as so far having limited its exposure to the mortgage market crisis.

But its shares fell, hurt by the negative sentiment that has cast a shadow on all US financial stocks.

"Despite what continues to be a difficult operating environment, the firm's results for the quarter highlight our ability to perform across market cycles and deliver value to our shareholders," chairman and chief executive Richard S Fuld said in a statement.

Shares fell 1.6% to $60.82 as its results failed to lift the gloom that has fallen on the financial sector.

Financial district in New York

"There is such negative sentiment on the entire financial group that even good news isn't giving these guys much of a lift," said Lee Delaporte, director of research at Dreman Value Management.

Financial gloom

Globally, banks have been hurt by their exposure to US sub-prime debt, which was repackaged and sold on.

Some high-risk borrowers have defaulted on their debt, hurting not just the American banks that lent them the money but also the global banks who bought the debt.

With Goldman Sachs, Morgan Stanley and Bear Stearns all due to report their fourth-quarter results next week, investors are braced for a fresh round of losses linked to sub-prime debt.

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