Two of the largest asset management firms in the US, Legg Mason and Franklin Resources, reported deteriorating results yesterday on the back of the financial crisis.

Legg Mason posted a bigger-than-expected quarterly loss as withdrawals from its funds soared and the asset manager took charges related to its wealth management division, sending its shares down 15 per cent in premarket trade.

Legg reported a net loss of $1.5 billion for its financial third quarter to 31 December compared with net income of $154.6 million a year earlier.

Excluding intangible-asset impairment charges, the loss was $4.52 a share, bigger than analysts' average forecast of a loss of $4.01, according to Reuters Estimates.

It is the fourth straight quarterly loss for Legg, and its biggest to date. The previous quarters' losses were triggered by charges the company took for lending financial support to its ailing money-market funds.

Assets under management fell to $698.2 billion as of 31 December from $998.5 billion a year earlier and $841.9 billion as of 30 September.

Clients pulled out a net $77 billion from Legg's funds in the quarter.

Meanwhile, at Franklin Resources, the firm reported net income of $120.9 million, or $0.52 per share diluted, on revenues of $969.3 million for the quarter ended 31 December 31, 2008. This compares with net income of $300.5 million on revenues of $1.321 billion in the three months to 30 September last year and net income of $518 million on revenues of $1.685 billion in the last quarter of 2007.

Total assets under management by the company's subsidiaries were $416.2 billion at the end of last year, down from $507.3 billion at 30 September, 2008 and $643.7 billion at the end of 2007.