Lehman Brothers reveal European insurance interest

14 September 2006

Lehman Brothers is seeking to acquire mortgage lending business in Europe, the Wall Street bank's chief financial officer has told reporters.

Chris O'Meara told Reuters that the bank was seeking the acquisitions in order to increase its mortgage revenue and provide lending partners for its strong US-based mortgage business.

At present, operations in Europe were limited, he said, meaning that Lehman was missing out on potentially large profits, with rates on loans much higher in Europe than in the US.

The comments come after Lehman brothers posted estimate-beating third-quarter earnings, with net profits reported at $916 million – a rise of some four per cent.

The rise was thanks largely to an increase in trading and investment management revenue, contrary to the concerns of analysts, who believed that a general slowing of trading volumes and activity in mergers and acquisitions would have a negative effect on the revenues of investment banks.

The announcement caused Lehman Brothers shares to rise by 3.2 per cent on Wednesday to reach $70.18 per share.

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