Merrill Lynch to write down further $6-8bn: WSJ


Merrill Lynch will announce a further $6 billion to $8 billion (Dh22 to Dh 29 billion) of asset write downs in its quarterly results this week, the Wall Street Journal reported on Wednesday, citing a person familiar with the matter.


The Journal said in its online edition that the write downs would take the total since October to more than $30 billion (Dh110 billion) and lead to a third straight quarterly net loss at Merrill, the longest such losing streak in its 94-year history.


A Merrill Lynch spokeswoman in London declined to comment and directed enquiries to the US bank's New York office. The spokeswoman in New York was not immediately available for comment.


Investors have been bracing for more bad news from big US banks reporting their first-quarter results this week as the housing market collapse and credit market turmoil has taken a big toll on their balance sheets.


Merrill is also preparing a cost-saving plan that will include job cuts of 10 to 15 per cent in some struggling business areas, such as bond financing, the Journal reported.


Currency traders in Asia said the article on Merrill caused a slight dip in the dollar against the yen but that the reaction was muted because investors had been expecting more such write downs.


JPMorgan Chase, which took over hard-hit investment bank Bear Stearns last month, and Wells Fargo both report their quarterly results later in the day. Merrill issues its results on Thursday.


Earlier in the week Wachovia, the number four US bank, posted a surprise first-quarter loss as losses from its mortgage portfolio worsened. It also cut its dividend and raised $7 billion (Dh26 billion) of capital. (Reuters)