Lehman Brothers suffered a $950m (€685m) hit in fixed income trading in the third quarter on the back of the credit crisis, but a record performance in investment management and strong results in equities and investment banking helped stem the decline in the bank's net profits to 3%.

Net revenues from fixed income trading plunged 47% in the three months to August to $1.1bn from more than $2bn a year earlier, with Lehman blaming the drop on "very substantial valuation reductions, most significantly on leveraged loan commitments and residential mortgage-related positions".