(Reuters) -Lazard Ltd on Friday reported a loss in the first quarter as sluggish dealmaking due to economic uncertainty, exacerbated by the banking crisis last month, eroded the investment bank’s fees.
The company also said it would eliminate around 10% of its workforce over the year. Its cost-saving measures resulted in a $21 million charge in the first quarter. It expects additional costs of around $95 million.
Major Wall Street investment banks including Morgan Stanley and Goldman Sachs have felt the brunt of a barren environment for mergers and acquisitions (M&A) as rising borrowing costs tightened credit in the market.
Global dealmaking activity shrank to its lowest level in more than a decade in the first quarter, with M&A volumes nearly halving from a year earlier, according to data from Dealogic.
As a result, Lazard’s operating revenue from its financial advisory business fell 29% to $274 million in the first quarter.
“Slower M&A activity resulted in significantly lower revenues in the quarter and the outlook for the year remains uncertain,” said Kenneth Jacobs, the company’s chief executive.
A banking crisis last month has also dampened investor sentiment, prompting an outflow of client assets that has hit fees earned from asset management.
Revenue from the asset management unit dipped 15% to $265 million. The bank’s assets under management are highly focused on equities and fixed income assets.
The investment bank reported a loss of $22 million, or 27 cents per share, for the quarter ended March 31, compared with a profit of $114 million, or $1.05 per share, a year earlier. Analysts on average expected 26 cents per share, as per Refinitiv IBES data.
(Reporting by Siddarth S in Bengaluru; Editing by Shinjini Ganguli)
