Merrill Lynch reported its fifth straight quarterly loss today. The result includes a whopping $13.5 billion in mortgage-related asset write-downs, bringing the firm’s sub-prime related losses/write-downs total to more than $65 billion.
The $5.2 billion loss, or $5.58 per share, is more than twice the size of the firm’s $2.2 billion loss in the year ago quarter. Net revenues at the firm were $16 million compared to $380 million in the third quarter of 2007. Merrill stock was flat in afternoon trading (NYSE:MER).
Merrill Chairman and CEO John Thain focused on the future in the press release. “We continue to reduce exposures and de-leverage the balance sheet prior to the closing of the Bank of America deal,” said Thain. “As the landscape for financial services firms continues to change and our transition teams make good progress, we believe even more that the transaction will create an unparalleled global company with preeminent scale, earnings power and breadth."
In the Global Private Client Group, Merrill’s retail brokerage unit, net revenues were $2.9 billion, down 8 percent from $3.2 billion in the third quarter of last year. Pre-tax income for global wealth management—which also includes global investment management ($241 million in net revenues)—was $753 million, down 21 percent from the same time last year. The pre-tax profit margin for GWM was 23 percent, down from 27 percent at the same time last year. Client asset flows were negative $3 billion in the quarter, an improvement on the net $6 billion client asset loss in the previous quarter but a far cry from the $26 billion the unit brought in the third quarter of 2007. View the entire press release here.
