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Losses at Lehman less than expected

Results in three-month profits at Lehman Brothers were better than expected after a fall of three per cent.

Net income at the US investment bank between June and August fell by three per cent to $887 million.

But given the sub-prime crisis results were expected to be much worse, "challenging conditions in the markets," had shown the bank's diversity and strength, boss Richard Fuld told the BBC.

Last month Lehman announced it was cutting 1,200 jobs and shut down its BNC Mortgage sub-prime lending unit.

All the top four US investment banks publish their results this week and Bear Stearns will be the most interesting on Thursday after it had to bail out two hedge funs due to exposure to the mortgage market.

Record levels of defaults by people with poor credit histories have caused the sub-prime crisis and it has heavily affected the big US banks.

Morgan Stanley are expected to release their results on Wednesday and Goldman Sachs and Bear Stearns on Thursday.