Merrills Profit Drops 26%

10 years ago

A reduction in merger and underwriting fees resulted in a 26% fall in profits at Merrill Lynch in the first quarter. Profit margins, however, rose to their highest levels for a year after cost reductions.

The world's largest securities house posted net revenues of $647m in the first quarter, down from $874m a year earlier. The firm posted a loss in the final quarter 2001.

Merrills had not posted profit growth since the final quarter 2000 and the latest results appear to indicate that the massive cost reduction exercises undertaken by the firm are begining to bear fruit.

The group now employs 56,400 people, a reduction from 70,300 one year ago.

David Komansky, the Merrill chairman and chief executive officer, said that the earnings are a 'clear indication that we are on the right track and are starting to deliver on the things that we promised.'

Pretax profits from global markets and investment banking fell 38%. Underwriting revenue fell 27%.

The asset management businesses saw a 24% increase in profit.