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Lazard suffered an unexpected hit from the credit crunch in the first quarter as losses on the value of bonds and equities held on its balance sheet dented the independent investment bank’s profits. Lazard, which makes most of its money from advisory work, said it had been forced to write down the value of corporate bonds held by its French subsidiary, while also suffering losses on a portfolio of equities it uses to seed asset management products. As a result, its corporate division reported a Q1 outflow of $39.7m, compared with Q1 income of $18.7m last year. The writedowns are much smaller than those by Lazard’s larger rivals but are embarrassing for a bank that has presented itself as relying solely on advisory and asset management fees – rather than trading – for its income. Lazard’s net profit in the period was just $16m, down from $55m in Q1 2007.