Bear Stearns’ market share in the lucrative prime brokerage business has fallen sharply during the credit squeeze, an issue the bank is likely to address on Thursday as it announces what is expected to be its first ever quarterly loss.

Prime brokerage – which entails providing trading, lending and other services to high-paying hedge fund clients – is a critical business for Bear, which had long been a top three-player in the industry behind Goldman Sachs and Morgan Stanley.