MERRILL LYNCH, the US investment house taken over by Bank of America at the peak of the financial crisis, made after-tax losses of $1.5 billion (€1.03 billion) in its Irish-based unit, Merrill Lynch International Bank.
According to documents filed at the Companies Office, the pretax loss on ordinary activities at the Irish incorporated wing of Merrill Lynch was $1.47 billion in 2008, a year that was marked by extreme financial volatility.
Merrill Lynch International Bank’s loss-making performance last year compares to a pretax profit on ordinary activities of $854 million in 2007.
Provision for “bad and doubtful debts” multiplied from $99 million in 2007 to a sum of almost $715 million last year. The group realised losses of $940 million on the sale of loans as part of its move to reduce its exposure to residential and commercial property.
Profit from share dealing increased 3 per cent last year to $1.14 billion, while earnings from fees and commissions increased 7.5 per cent to $831 million.
Wage and salary costs fell 6.6 per cent to $511 million as the company cut back on its support services staff. The average number of employees was 2,492, both in Ireland and overseas.
Trading assets swelled from $195 billion to $603 billion as a result of an increase in the number and value of derivative financial instruments in its trading portfolio but this increase in trading assets was largely offset by an increase in trading liabilities.
The accounts filed at the Companies Office relate to the period before Bank of America completed its acquisition of the Merrill Lynch parent company. The takeover, which was announced in September 2008 at a time when financial stocks were in freefall, was finally completed on January 1st, 2009.
In the directors’ report, Merrill Lynch International Bank noted that global market and economic conditions during 2008 were “extremely difficult” and were characterised by increased illiquidity in credit markets, ongoing volatility and lower business and consumer confidence.
The head of Bank of America Merrill Lynch’s Irish unit, Mike Ryan, is shortly due to step down from his position in order to become deputy chief executive of the financial regulator in the Gulf state in Qatar.
Merrill Lynch International Bank, which has its headquarters in Dublin, also has offices in Amsterdam, Bahrain, Frankfurt, London, Madrid, Milan, Dubai and Singapore. During the period, the group opened branches in Seoul, Toronto, Paris and Brussels.
