Lazard reported a 50% fall in second-quarter profit Thursday, as earnings fell to $33m.
Reuters reports that the firm said that its costs are too high compared with its revenue, but they would come down. 'We are confident the expense initiatives we have under way will bear fruit in 2013', Chief Financial Officer Matthieu Bucaille said on a conference call with analysts.
Lazard took a $25m severance charge in the first quarter related to staff cuts. CEO Ken Jacobs wouldn't say whether more layoffs were ahead, but suggested that Lazard bankers would be getting smaller bonuses this year.
'We don't pay people until year end', he said. 'So a lot of this stuff doesn't become evident until we get around to doing compensation'.
In the meantime, the news agency reports that Citigroup's $22bn valuation of its brokerage joint venture with Morgan Stanley reflects an extremely optimistic view of the future of Wall Street profits, making a multi-billion-dollar loss on the business more likely for Citi.
Sources familiar with the situation said Citi's appraisal works out to 50 times current one-year earnings for the joint venture, Morgan Stanley Smith Barney. The long-term average price-to-earnings ratio for retail brokers is only about 18 times.
Finally, Reuters also reports that a near $14m pay-off for a Barclays Plc investment banker at the centre of the Libor scandal is a 'reward for failure' and he should instead be pursued to retrieve previous pay awards, shareholders and politicians said.
Jerry del Missier, who quit as Chief Operating Officer after Barclays was fined $450 million for manipulating Libor interest rates, will get the cash pay-off under a deal negotiated just before he left, a person familiar with the matter said.
Don't they ever learn anything? It's all very well saying that's the nature of the contract, but nobody writes a contract without good-leaver status somewhere," said a top 40 shareholder in the bank, who asked not to be named.
'It's not difficult to say people weren't too impressed. We for one are mightily pissed off', he said.
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