Merrill Lynch Q2 losses exceed expectation

Source: Exec Digital USA

Date :7/18/2008 3:49:14 AM

The US brokerage reported a larger than expected US$4.6 billion group loss yesterday, July 17, after another US$9.75 billion hit from the credit crunch.

This is Merrill’s fourth consecutive quarterly loss and brought the group’s total loss for the past year to US$18.65 billion.

The group’s shares, which had jumped 9.75 percent yesterday, fell by US$2.88 or 9.37 percent in after-hours trading following the announcement.

The rally had been prompted by better-than-expected results from Wells Fargo and JPMorgan Chase in the previous 48 hours that had given investors hope that the fortunes of the banking industry may be improving.

Merrill also announced the sale back to Bloomberg of its 20 percent stake in the financial news and data group for US$4.4 billion in a move to bolster its capital reserves.

It is also negotiating to sell a controlling interest in its Financial Data Services division for at least US$3.5 billion.