Profits at Bear Stearns down 79%

Bear Stearns is the biggest casualty of the credit crunch

Beleaguered US investment bank Bear Stearns has revealed that its net profit fell 79% in the three months until the end of February.

In the process of being bought by JP Morgan Chase after its near collapse, Bear Stearns made a net profit of $115m (£58m) in its fiscal first quarter.

Net revenues at Bear Stearns declined 40%, again compared to the same time a year earlier, to $1.48bn.

Bear Stearns is the most high-profile US victim of the credit crunch.

Expected job cuts

The company was forced to seek emergency funding from JP Morgan Chase and the Federal Reserve of New York on 14 March.

The firm had been at the centre of the US bad mortgage debt crisis which last summer sparked the global credit shortage, and there had been growing speculation that it was struggling to fund its daily business.

Three days later JP Morgan Chase turned its rescue of Bear Stearns into a takeover bid, initially offering just $2 (£1) a share.

JP Morgan Chase subsequently increased its offer to $10 a share, following criticism that its initial bid was too low.

Some job cuts among Bear Stearns' 15,000 staff are expected when JP Morgan Chase completes the continuing takeover process.