Lehman CEO confident even as firm posts loss

By Dan Wilchins

NEW YORK (Reuters) - Lehman Brothers Holdings Inc's chief executive expressed confidence in the investment bank on Monday, sending its shares up as much as 9 percent even as it posted its first quarterly loss as a public company.

CEO Dick Fuld, who managed Lehman through difficult periods in the 1990s, said the company's franchise and capital position are strong, even after it recorded $3.7 billion of write-downs during the quarter, leading to the $2.8 billion loss it forecast last week.

"We've made a number of changes. It's now my job to make sure that we execute," Fuld said on a conference call with investors.

The 62-year-old executive has been with Lehman since 1969 and has been CEO since 1993. He has been largely absent from public view during the recent turmoil at the bank, but told investors on Monday that the quarterly loss "is my responsibility."

Clouds remain at the bank. Its shares have not recouped all of their decline last week, when the company forecast the quarterly loss and demoted its chief financial officer and chief operating officer amid a crisis in confidence.

The shares, up $1.57 to $27.38 in Monday afternoon trade, are still below their book value, or net accounting value, of $32.95, implying that investors see more write-downs coming at the fourth-largest U.S. investment bank.

"That's the $64,000 question for all the brokers: What is their actual book value?" said Jeff Harte, analyst at Sandler O'Neill in Chicago. "That's definitely what people are concerned about." Harte rates Lehman "hold."

Lehman has more than $60 billion of mortgages and asset-backed securities on its books, an amount well in excess of the company's net worth, which could bring more write-downs.