Lehman Brothers Holdings Inc. today reported net income of US$1 billion for the second quarter ended May 31, up 47% from the second quarter of fiscal 2005.

However, the second quarter results represented a decrease of 8% from record net income reported in the first quarter of fiscal 2006. For the first half of fiscal 2006, the firm reported record net income of US$2.1 billion, up 34% from the first half of fiscal 2005.

Lehman reported net revenues (total revenues less interest expense) of US$4.4 billion for the quarter, a 35% increase from US$3.3 billion in the second quarter of fiscal 2005 and a decrease of 1% from the record US$4.5 billion in the first quarter of fiscal 2006.

Investment Banking revenues increased 28% to US$741 million for the second quarter of fiscal 2006, from US$579 million for the same period a year ago. Second quarter revenues were driven by strong advisory and equity underwriting revenues, partially offset by a decline in debt underwriting, it said.

Capital Markets reported record net revenues of US$3.1 billion in the second quarter of fiscal 2006, a 38% increase from US$2.2 billion reported in the second quarter of fiscal 2005. Equities Capital Markets net revenues increased 85% to US$878 million and Fixed Income Capital Markets reported record net revenues of US$2.2 billion, an increase of 25%.

Investment Management net revenues were a record US$592 million in the second quarter, an increase of 25%. Private Investment Management net revenues were US$245 million, and Asset Management reported net revenues of US$347 million, an increase of 36% compared.

The firm’s return on average common stockholders’ equity was 23.7% for the second quarter, compared to 18.2% in the second quarter of 2005, and return on average tangible common stockholders’ equity was 29.5%, compared to 23.5% in the quarter last year.

Richard Fuld, Jr., chairman and CEO, said, “Our strong results for the second quarter continue to demonstrate that Lehman Brothers has the breadth, balance and scale necessary to help our clients around the world take advantage of opportunities in a changing and challenging market environment. As we remain focused on delivering the best solutions to our clients, we are equally committed to maintaining a strict discipline around risk, liquidity and expense management to drive shareholder value.”