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7th February 2012

Lazard full year net down 36%

Lazard reported full year net income of $178.6m (€138.4m £115.4m ¥13,778bn Y1,131.4m) down 36%. Lazard is historically regarded as a financial advisory house and still gains the majority of its income from this sector - which was understandably down in 2011. The bank had done well in the immediate aftermath of the banking crisis through restructuring advisory including a few lucrative government contracts. Asset Management has at the same time being growing with a 14% increase during 2011 which when combined with a jump in other income helped compensate for the fall in advisory income to leave overall income down 5%.


Expenses appear worrying at first sight. The bank argues that discretionary bonuses fell by 20% and to GAAP standards awarded compensation & benefits remains at the same ratio to overall income as the previous year. The increase in general expenses is blamed on IT spend, recruitment and the fall in the dollar.


Income Statement - Full Year 2011 2010 Change
$000s $000s %
Financial Advisory
M&A and strategic advisory 700,539 714,059 (2%)
Capital markets & other advisory 93,888 112,616 (17%)
Strategic advisory 794,427 826,675 (4%)
Restructuring 197,743 293,875 (33%)
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Total 992,170 1,120,550 (11%)

Asset Management
Management fees 818,038 715,885 14%
Incentive fees 26,245 86,298 (70%)
Other revenue 38,494 32,469 19%
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Total 882,777 834,652 6%
Corporate 8,922 23,321 (62%)

Operating revenue 1,883,869 1,978,523 (5%)

Compensation & benefits expense 1,168,229 1,166,210 0%
Non-compensation expense 399,677 368,209 9%
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Earnings from operations 315,963 444,104 (29%)
Noncontrolling interests 10,948 11,174 (2%)
Amortization of intangibles (11,915) (7,867) (26%)
Interest expense (86,200) (89,432) (4%)
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Pre-tax income 228,796 357,979 (36%)
Provision for income taxes 46,504 70,025 (34%)
Noncontrolling interests 3,678 6,880 (47%)
____________________________
Net income 178,614 281,074 (36%)