Bear Stearns, the bank has suffered the first ever loss in its 84-year history, which is even bigger than most analysts would have dared to predict.
America’s fifth-largest investment bank posted a $1.9 billion writedown in the quarter to the end of November after the sub-prime crisis proved indomitable.
The bank had predicted writedowns of just $1.2 billion in November, with analysts obviously unable to forcast the true extent of the losses inflicted.
“We are obviously upset with our 2007 results, particularly in light of the fact that weakness in fixed income more than offset strong and, in some areas, record-setting performance in other businesses,” says Jimmy Cayne, CEO, Bear Stearns, in a statement.
Cayne will forfeit his annual year-end bonus as a result. Most of the bank’s executive committee have done the same.
Bear’s fourth-quarter loss totalled $859 million, or $6.90 per share, while it had posted a profit of $558 million, or $4 per share, for the same period last year.
Financial experts polled by Thomson Financial had predicted a loss of only $1.79 per share on average, with not a single analyst expecting more than $2.45 to be lost per share.