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Investment bank Lehman Brothers has posted a 59 per cent drop in income per share for the first quarter of 2008 but reassured investors of its "robust liquidity".

Lehman Brothers reported net income of $489 million (£242 million), or $0.81 (£0.40) per common share, for the first quarter ended February 29th 2008, representing decreases of 57 per cent and 59 per cent, respectively, from last year.

The results are better than gloomy Wall Street predictions of $0.72 (£0.35) per share.

The group's fixed income capital markets segment was hit particularly hard by the subprime crisis, reporting net revenues of $262 million (£129 million) - a decrease of 88 per cent from $2.2 billion (£1.08 billion) in the first quarter of fiscal 2007.

But the company was keen to emphasise its ability to weather the storm and said it has a "robust liquidity pool of $34 billion (£16 billion) at quarter end".

In addition, the holding company has other unencumbered assets of $64 billion (£31 billion) and regulated entities had unencumbered assets of $99 billion (£49 billion) at quarter end, the bank said.

Chairman and chief executive Richard Fuld, said, "In what remains a challenging operating environment, our results reflect the value of our continued commitment to building a diversified platform and our focus on managing risk and maintaining a strong capital and liquidity position."

Following the near-collapse and subsequent buy-out of Bear Stearns over the weekend, investors were scrutinising similarities between the crisis-hit bank and Lehman Brothers.

Shares in Lehman Brothers plunged yesterday on fears the investment bank would go the same way as its rival.

Goldman Sachs also announced first quarter results today, and its earnings per share more than halved in value from last year.

Again, earnings per share of $3.23 (£1.60) were better than predicted by analysts, who forecast a profit of $2.58 (£1.27) per share according to Thomson Financial.