Mumbai: US investment bank Bear Stearns Cos Inc has reported a 61 per cent drop in quarterly profit, the lowest level in five years, amidst rising bad debts from subprime mortgages and disrupted fixed-income trading.

The company''s profit plummeted after the collapse of two hedge funds triggered about $200 million in losses and expenses.

Bear Stearns, a leader in packaging home loans into mortgage-backed bonds, bread-and-butter business, fixed-income, saw its revenue plunge 88 per cent to $118 million. Revenue from trades with Bear Stearns'' money fell nearly $800 million in the quarter.

Net income was $171.3 million, or $1.16 a share, in the third quarter ended August 31, down from $438 million, or $3.02 a share, in the year-earlier period.

also see : General reports on Economy