MercoPress. South Atlantic News Agency

More losses and fresh funding for US banking system

United States investment bank Lehman Brothers is raising 6 billion US dollars to boost its finances after predicting a loss of 2.8 billion in the second quarter of 2008.

This compares with a 1.3 billion profit a year earlier, due to the US sub-prime mortgage meltdown and the global credit crisis. Just last week the bank denied it was facing funding problems. It is the first loss for the Wall Street bank since being spun off from American Express in 1994. The move comes after Lehman Brothers raised 4 billion in April by selling shares to quell investor concerns that it needed more capital. The bank's public offering of common stock and convertible preferred stock will be aimed at mainly US investors, analysts said. Lehman, which is due to formally announce second quarter earnings on 16 June, has seen its shares slump more than 50% this year on mounting concerns about its exposure to the mortgage market. On Monday, Lehman shares slid 9.7% to $29.15 in afternoon trading in New York. Chief executive Richard Fuld said: "I am very disappointed in this quarter's results." Analysts have wondered about Lehman's health after the global credit crunch led to the collapse of smaller rival Bear Stearns, which was bought cheaply by JPMorgan Chase.