Lazard profit up 5 percent despite market slump

By Joseph A. Giannone

NEW YORK (Reuters) - Investment bank Lazard (LAZ.N) on Wednesday posted a 5 percent increase in quarterly profit because of higher advisory and asset-management fees, despite a slowdown in deal activity.

But shares of the independent adviser declined after comments from executives cautioning that volatile markets could impact near-term results.

Lazard was involved in some of the biggest deals announced this year, including InBev NV's $52 billion (26.2 billion pounds) takeover of Anheuser-Busch BUD.N INTB.BR and Gaz de France's 44.6 billion euro merger with Suez Environment (SEVI.PA).

Vice Chairman Steve Golub told Reuters that Lazard was an adviser on deals announced in July worth more than $100 billion, indicating merger and acquisition revenue would remain strong.

Lazard's second-quarter net income rose to $64.6 million, or 54 cents a share, from $61.5 million, or 53 cents, a year earlier. The Bermuda-based company reports earnings assuming the exchange of equity shares held by executives who helped convert the partnership into a public company in 2005.

Excluding certain costs and partnership stakes, operating revenue rose 12 percent to $494 million. The results were powered by the bank's financial advisory business, which saw an 18 percent increase in fees to a $289 million.

Analysts' average earnings forecast was 51 cents a share, according to Reuters Estimates.

"We would be buyers," Merrill Lynch analyst Guy Moszkowski told clients in a note. "Lazard posted a clean beat," he added, citing surprisingly strong asset management results.